Black unemployment rate hits record low 5%

The Black unemployment rate sank to a record low 5% in March, a testament to the economic recovery following the coronavirus pandemic.

Just three years ago, the Black unemployment rate had spiked to a pandemic high of 16.8%, compared to the record White unemployment rate of 14.1%.

The March rate breaks the previous record of 5.3% set in August 2019—when President Donald Trump often took credit for Black unemployment rates during his term—according to data by the Bureau of Labor Statistics dating to 1972.

“The unemployment rate is close to the lowest it has been in more than 50 years and a record low for African Americans,” President Biden said in a statement, trumpeting the administration’s pandemic stimulus packages. “Thanks to the policies we have put in place, the recovery is creating good jobs that you can raise a family on.”

Black employment has benefited from the same forces that have helped all workers—a surge in labor market demand coming out of the pandemic fueled by federal stimulus, which has led to one of the fastest job recoveries on record, sending the national unemployment rate to historic lows.

Yet, the rise in Black employment also reflects key pandemic-era changes in the labor market. The proportion of Black workers who had a job or were looking for one exceeded the labor force participation rate for White workers in June 2021, a first according to the BLS. In March, the Black labor force participation rate of 64.1 percent was nearly two points higher than that of White workers.

“This is a victory,” said William Spriggs, chief economist for the AFL-CIO and a professor at Howard University. “It’s not only that Black unemployment is low. It’s also that, for the first time, a higher share of Black people are working than White people.”

Black workers made up about 13% of the U.S. workforce last year, Census Bureau data shows, but they have an outsize presence in service-sector jobs that recently experienced large gains. Additionally, health care and social assistance programs, restaurants and bars, and the government—all of which tend to disproportionately hire Black workers—added roughly 50,000 jobs apiece in March.

“Since the reopening of the economy, we’ve seen significant job gains and higher wages in in-person service jobs that tend to be dominated by persons of color, especially Black and Hispanic workers,” said Dana M. Peterson, chief economist at the Conference Board.

After six months of scouring the internet for job postings, Frances Holmes, who is Black, got hired in March at a barbecue stand at Busch Stadium, home of the St. Louis Cardinals. During her job search, Holmes, who is 60 and makes $12.90 an hour, said it felt like no one wanted to hire her, despite decades of experience working in the service industry.

“Being a Black woman at my age, it’s difficult finding a job,” Holmes said. “I applied probably to 60 jobs—fast food, retail, hotels, janitorial. This was the first offer.”

Holmes’ employment contract runs out in October, but she said she is hopeful that she will get a full-time offer by then by showing her employer that she works hard and shows up on time.

Experts point to the increased availability of remote work as a reason for increased Black employment. Companies that embraced remote work during the pandemic were often better positioned to boost the numbers of minorities in their workforces. Remote work allowed those companies—including many of the well-paying tech giants – to recruit outside of their headquarters’ region, giving them access to larger swaths of potential candidates. Research suggests that working from home is a particularly attractive option for working mothers and employees of color.

A February 2023 report by Future Forum found that 81% of Black desk-based workers preferred a fully remote or hybrid working arrangement compared to 79% of White workers. Fifty-nine percent of working mothers said they wanted to work outside of the office three to five days a week compared with just 47% of working fathers, the survey found.

Companies could “broaden the geographic scope [they recruited from] so that automatically brought in a talent pool that was historically out of reach,” said Bhaskar Chakravorti, dean of global business at The Fletcher School at Tufts University. Remote work also gives employees “an opportunity to work in companies that were elsewhere but remain close to their social and cultural and socioeconomic network.”

Whether these gains will last remains uncertain, as economists predict a recession this year. Black workers historically have suffered disproportionately during recessions and economic downturns because a larger share of them work in lower wage industries more prone to layoffs.

Additionally, as the technology industry sheds thousands of jobs amid new economic pressures, many of the jobs that tech companies are choosing to cut are roles that are more likely to be held by women and some people of color, evidence shows.

“The desk jobs are the ones that relate to HR, marketing and sales, [and] a lot of customer service” are among the first to be cut, said Chakravorti of Tufts. “Many of these workers, since they have not really been in the office, they have not had the chance necessarily to build some of those personal relationships with senior management and that also affects their ability to have a champion inside the company.”

Indeed, Peterson, the Conference Board economist, says she worries that the gains for Black workers could be short-lived, especially as the economy slows. She expects a “brief” recession this year that could lead to layoffs in entertainment, transportation and other service jobs. Although those employers have been quick to bulk up in recent years, they could also be among the first to feel the pinch of a slowing economy.

Historically, the Black unemployment rate in the United States has tended to be twice the White unemployment rate, owing to systemic racism and other broad structural forces, such as differences in access to education and higher-paying jobs, labor economists say.

Several economists credited the White House stimulus package of 2021 for kick-starting the labor market into overdrive, in a way that benefited many groups of workers. The unemployment rate for Latinos for March had dropped to 4.6 percent, which is low, although not a record.

Slower economic recoveries have exacerbated racial inequality as Black workers tended to be shut out of the labor market longer than White workers, shrinking their wealth, professional networks and skills.

“Weak recoveries churn out racial inequality and lost opportunity,” said Heidi Shierholz, president of the Economic Policy Institute, a left-leaning think tank. “Our fast jobs recovering has kept that from happening. That is due to in large part in relief and recovery packages.”

For now, the record low Black unemployment rate is also a win for the Federal Reserve, which has been accused of widening economic inequality. With its years-long policy of lower interest rates that help more workers get and keep jobs, those policies also boost wealth for people who hold investments or want to buy homes, which can bypass Americans of color.

Fed officials have argued that a tight labor market is key to reaching groups who have, historically, been left on the economic margins.

Fed Chair Jerome H. Powell often says his goal is to works toward a labor market that lifts everyone up.

“I would go back to the labor market that we had in 2018. ’19, ’20” Powell said in a December news conference. “What that looked like was, wage increases for the people at the lowest end of the income spectrum were the largest. The gaps between racial groups and gender groups were at their smallest in recorded history. … So that seems like something that would be really good for the economy and for the country, if we could get back to that.”