Officials tout job gains
Obama’s secretaries cite improved climate for blacks
Martin Desmarais | 2/10/2016, 12:30 p.m.
President Barack Obama’s economic heavy hitters spoke at the White House last week about how the economy during the current administration has impacted African Americans, namely by lowering the unemployment rate, raising tax credits and improving city infrastructure.
Chairman of the Council of Economic Advisers Jason Furman pointed out that African Americans were severely impacted by the recession, as much as any group.
“The African American community bore the brunt of the recession, seeing its unemployment rate rise to a high of 16.8 percent in March 2010,” Furman said.
That rate is now 8.8 percent as of January 2016. This number is actually below the pre-recession average. In the past year, the African American unemployment rate has seen a larger percentage-point decline in the recovery, falling almost twice as fast as the overall unemployment rate.
Furman credits the Economic Recovery Act, the auto manufacturer bailout, housing infrastructure and a range of other policies for the economic recovery in general and the impact on unemployment.
Though he was quick to point out it is still not enough.
Furman has been very outspoken that more work needs to be done to close long-standing disparities in the labor market. The African American unemployment rate is still higher than Hispanic unemployment and the overall unemployment rate.
He pointed to a number of government efforts he said can help make sure that the strong labor market — job growth for a record 70 straight months — benefits all. These include the My Brother’s Keeper initiative for young men of color and new investments in skills training and apprenticeships.
Furman’s points do seem in line with the work done by Valerie Wilson, director of the Economic Policy Institute’s Program on Race, Ethnicity and the Economy.
Wilson has repeatedly argued in her research that the African American unemployment rate is critically tied in to how the economy recovers from recessions.
For example, she found that wages of black workers are more responsive to labor market changes. Doubling the national unemployment rate is estimated to reduce real hourly wages by at least 8 percent for the median black worker compared to 3 percent for the median white worker.
Wilson asserts that policy makers have to do whatever they can to continue to help the unemployment rate improve and that this factor is perhaps more critical to the economic prosperity of African Americans more than any other.
For example, during the five-year period from 1995-2000 when the annual unemployment rate dropped to 4 percent, Wilson found that:
- The black unemployment rate fell to 7.6 percent, the lowest rate on record and the closest it has ever been to the white rate (within 4.1 percentage points) during a period of economic expansion.
- Real wage growth for African Americans narrowly exceeded that of whites, as median hourly wages of black workers grew by 2 percent per year compared to 1.7 percent per year for whites.
- The African American middle class expanded more than in periods of economic recovery when the economy was further from full employment. The share of African American households in the middle 60 percent of the income distribution increased 3 percentage points between 1995 and 2000, while it declined during the recoveries of the 1980s and the 2000s as well as during the current one.