Black Men and the U.S. Economy: How the Economic Recovery Is Perpetuating Systemic Racism

In recent months, leading economists have touted that the labor market is recovering from the global pandemic and related recession, putting the United States on a path to reaching full employment. In December 2021, Federal Reserve Chair Jerome Powell stated: “The labor market by many measures is hotter than it ever was [before the pandemic].”¹ In many regards, that is true: Unemployment is falling rapidly, dropping to 3.8 percent in February 2022, which, while still above the pre-pandemic rate of 3.5 percent,² marks a historic and faster recovery than expected.³ Workers across all racial groups have experienced larger declines in their unemployment rate compared with the recovery after the Great Recession in 2008.⁴

Yet this economic recovery is revealing the impacts of continuing systemic racism, ageism, and ableism on the labor market. Specifically, many Black men—older and disabled Black men in particular—continue to experience persistent gaps in both employment and economic opportunity. An economy where Black men consistently experience significantly higher unemployment rates than white men cannot be considered as having reached full employment.⁵ Likewise, a recovery that does not reach everyone equitably does not bode well for the country’s long-term economic health and stability.

In order to address this systemic challenge, this issue brief 1) examines how Black men are excluded from the economy and wealth-building opportunities; 2) considers the intentional policy choices the United States has made to keep Black men outside the financial mainstream; and 3) highlights the promising, intersectional policy interventions that are available to increase the number of Black men in the labor force, create good jobs, address wage disparities, and close the racial wealth gap.

The COVID-19 pandemic plunged the United States into a deep recession that affected workers and families across the country; however, the impacts of this recession have also revealed the harmful ramifications of long-standing systemic racism on the labor market.

During the height of the pandemic-induced recession in April 2020, the unemployment rate reached 14.7 percent, the highest rate observed since this data collection began in 1948.⁶ While the unemployment rate for white men during this period was high relative to pre-pandemic levels, at 12.3 percent in April 2020,⁷ Black men’s unemployment soared to a high of 16 percent in June 2020⁸—a level that has never been reached by white men.⁹ Notably, during this time, Black men also experienced longer periods of unemployment than white men:¹⁰ In 2021, the typical duration of unemployment among Black men was 20.1 weeks, compared with 16.6 weeks among white men.¹¹ By February 2022, white men’s unemployment had dropped all the way to 3 percent, while Black men’s unemployment hovered at more than twice that, at 6.4 percent. While the decline in Black men’s unemployment rate has been faster than that of the Great Recession, racial inequities persist.¹²

Fortunately, the Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020 expanded the Pandemic Unemployment Assistance program¹³ to give part-time workers, independent contractors, and gig workers—all jobs in which Black workers are overrepresented—unemployment benefits for the first time.¹⁴ However, from April 2020 to June 2020, only 13 percent of jobless Black workers received these expanded unemployment benefits compared with 24 percent of jobless white workers.¹⁵ This disparity in access to benefits can be partially attributed to the federal policy decision to allow states to set their own eligibility requirements and benefit amounts. For example, states in the South—the U.S. region with the highest proportion of Black residents—offer, on average, the lowest unemployment insurance benefits of any region in the country. As a result, fewer eligible people of color have received those benefits. These state-level differences have exacerbated poverty and economic hardship for many Black people, resulting in poorer economic outcomes.¹⁶ Furthermore, when Black workers are employed in certain low-income jobs, in roles such as home health care aides, or part-time work, their unemployment benefits tend to be smaller, limiting their ability to remain financially stable during an economic crisis.¹⁷

Looking solely at the unemployment rate, however, can underestimate the extent of joblessness among Black men. After factoring in the disproportionate number of Black men and youth who are in carceral settings that are not counted as unemployed and also unable to look for employment, the prime-age employment-to-population ratio gap between Black and white male workers is even higher.¹⁸ Simply put, there are far more Black men who are jobless than the already high unemployment figures would suggest,¹⁹ further contributing to greater poverty, reduced financial stability, and a lack of generational wealth in Black families and communities.

Older Black men and those with disabilities face some of the greatest barriers to economic security

Importantly, Black men are not a homogenous group, and their experiences differ by age and disability status, among other factors. Black men who are also members of other marginalized groups, such as disabled people or older adults, often experience intersecting and compounding forms of discrimination. Older Black men, for example, may experience ageism as well as racism and must deal with the compounding impacts of income and wealth gaps as they age. Indeed, while the increase in early retirements and the large declines in labor force participation among older people are well documented,²⁰ such trends are not present among older Black men specifically. In fact, older Black men experienced large increases in labor force participation in 2021, largely because they tend to accumulate less retirement savings and wealth than white men, affecting their ability to retire early.²¹ (see Figure 1)

Figure 1

In 2021, the number of employed Black men with disabilities also increased significantly. (see Figure 2) This increase in both older Black men and Black men with disabilities in the labor force²² partially reflects a tight labor market, in which employers may be willing to look beyond whom they consider “traditional” candidates. However, it might also point to the higher prevalence of disability in the Black community due to COVID-19 and long COVID, which have had differing impacts by race.²³

Figure 2

This increase in employment of Black men with disabilities can be considered a positive development if it is in line with their own employment goals; however, the higher rate of employment is a cause for concern if it has occurred due to a lack of financial security, if it is a consequence of the racial wealth gap, or if the types of jobs being attained are not good jobs with living wages, access to benefits, and the opportunity to save for the future. Nevertheless, employment gaps persist, as labor force participation rates among Black men with disabilities are continually lower than those of white men with disabilities—although the gap has slightly narrowed in 2021 compared with 2020. (see Figure 2)²⁴

It is important to note that the employment gap between Black men and white men has never closed. If it were to close, however, Black men would see significant employment and wealth gains. Indeed, if Black men had the same unemployment rate as white men in 2021, there would have been, on average, an estimated 406,270 more employed Black men in the economy every month.²⁵  A significant increase in employed Black men would help more Black households reach financial stability, build wealth, and secure stable wages. Furthermore, closing the employment gap would allow Black communities to accumulate approximately an additional $33 billion annually, benefiting the broader economy and, more importantly, reducing economic inequities and increasing generational wealth for Black individuals and families.²⁶

Almost 250 years of slavery, followed by the failure of Reconstruction and a century of Jim Crow segregation, built the foundation of Black suppression and exploitation in the United States, intentionally depriving Black people of opportunities to build or pass on wealth. Additionally, policies in the 20th century—such as the exclusion of occupations traditionally held by Black men from New Deal programs, discriminatory implementation of the GI Bill, redlining, subprime loans, gerrymandering, and voter suppression—compounded the inequities experienced by Black individuals and families in employment, housing, voting, and more, further cementing economic disparities that persist to this day. Meanwhile, the overrepresentation of Black men, women, and youth in the criminal justice system has had a high cost on the economic mobility of Black families and communities across the country for decades. Finally, inequitable access to public services and supports has forced many Black communities into enduring cycles of generational poverty and deprivation.²⁷

As a result of this historical discrimination, Black individuals are overrepresented in low-wage jobs and have been left behind in the labor market. The types of jobs typically worked by Black men have been affected by the COVID-19 recession, driving the disproportionate economic impact on Black workers. The most common occupations held by Black men are low-wage jobs compared with those held by white men. In addition, 19 percent of employed Black men work in just their top five most common occupations, while about 14 percent of employed white men work in their top five most common occupations. (see Figure 3) This kind of clustering in a small number of occupations means that when an economic shock hits, the groups who disproportionately work in the most affected occupations, such as Black men, bear the brunt of the shock, while groups that are more spread out among occupations, such as white men, are more protected from layoffs.

In 2021, more than 1 in 5 employed Black men worked in either leisure and hospitality or wholesale and retail trade²⁸—jobs that are in person and on the front lines, exposing Black families to higher health risks during the COVID-19 pandemic. Moreover, the jobs held by Black men not only tend to pay less but also have limited or no benefits such as paid family and medical leave, retirement savings, and at-will scheduling. This lack of accommodations and benefits compounded the risks experienced by Black workers during the pandemic. Not surprisingly, people of color—and especially the Black community—have experienced a disproportionate burden of COVID-19 cases and deaths.²⁹

Figure 3

In addition to Black men’s overrepresentation in low-wage jobs, data trends show that they tend to have some of the highest unemployment rates among all racial, ethnic, and gender groups; in other words, the racial differences in labor market outcomes experienced during the COVID-19 recession are not new.³⁰ In fact, since the U.S. Bureau of Labor Statistics began collecting data on Black men’s unemployment rates in 1972, Black men have persistently experienced unemployment rates at twice the rates experienced by white men. (see Figure 4) Chronic unemployment experienced by Black men is also coupled with high levels of underemployment, where Black men are more frequently only able to find part-time jobs even when seeking full-time employment.³¹

Figure 4

Enduring unemployment and underemployment for Black men are only one part of the story. A long history of racial discrimination and exploitation—through overrepresentation in the criminal justice system, unfair hiring and firing practices, and a lack of economic opportunity and wealth building—has left too many Black men and communities impoverished and less resilient to overcoming economic, health, and social disruptions.

Stark racial and ethnic differences that do not receive sufficient attention exist among wages for full-time, year-round male workers: In 2020, Black men earned just 75 cents for every $1 earned by white, non-Hispanic men.³² And prior to the pandemic, in 2019, the median income for Black households was $45,438, while the median income for white households was $76,057.³³ Given that white households are more likely to have inheritances, higher home values, higher savings, and greater income growth through the stock market, they tend to have much higher wealth than Black households; for context, the median wealth for white households was $188,200 in 2019, almost eight times that of Black households, whose median wealth was $24,100.³⁴ This trend of white household wealth dwarfing that of black households can be traced back 30 years.

As a result of the wealth gap, Black households faced more financial emergencies with fewer economic resources to weather them during the pandemic, which resulted in an even further widening gap in economic opportunity between Black and white households.³⁵

Wealth allows individuals and families to endure economic shocks, access critical support during economic downturns or job loss, save up to purchase assets such as homes, invest in opportunities through higher education or start a business, and pass on wealth to children and grandchildren. In other words, these disparities matter and have profound consequences. According to the U.S. Census Bureau, in 2021, the homeownership rate for Black families was 43 percent, compared with 74 percent for white families.³⁶ And recent research estimates that by 2064, a typical Black family will have accumulated approximately 70 percent less wealth than a typical white family. (see Figure 5) ³⁷

Figure 5

Unemployment, underemployment, wage inequality, and discrimination in the labor force all factor into an individual or family’s ability to save and accumulate wealth throughout their lifetime. Moreover, Black men must overcome additional barriers to building wealth, such as higher mortality rates than their white counterparts—which prevents them from accumulating wealth to pass on to future generations—as well as discrimination and limited access to the health care system and health services.³⁸ These barriers collectively hinder wealth accumulation for Black men, affecting their ability to pass on wealth to future generations.

While the recovery from the pandemic-induced recession has been good for many Americans, it has occurred against the backdrop of historical disparities among populations that existed long before the pandemic. A recovery that does not address the consequences of systemic racism and its impact on Black men’s employment cannot be considered as having achieved full employment in the United States. A truly equitable economy must deliberately center Black men, addressing the historical barriers to their full employment and participation in the labor market.

The federal government plays a crucial role in addressing economic inequities and bringing the economy out of recessions. Yet to do so equitably, the federal government—along with state and local governments, nonprofits, and the private sector—must also work to dismantle the historical racism, sexism, and ableism that has impeded economic security and mobility for far too many individuals and communities of color. On his first day of office in January 2021, President Joe Biden guided the United States toward securing a more equitable future by signing an executive order that centered the federal government’s role in advancing racial equity and support for underserved communities. This historic directive signaled the Biden administration’s intentions to dismantle deep-seated barriers to full economic participation and mobility, particularly for Black men and youth.

Coordinated efforts among the executive office, federal agencies, and state and local governments can leverage government investments to promote policies, programs, and practices that combat widespread and persistent racial wealth and employment inequities. To do so, policymakers need not reinvent the wheel; there is a plethora of intersectional policy interventions that can direct future actions to increase the number of Black men in the labor force, address wage disparities by raising the wages of Black men, and close the racial wealth gap by increasing Black men’s wealth.

Policy interventions that can help increase Black men’s labor participation and close the wealth gap

Historical and current policy decisions have kept Black men out of the economic mainstream for far too long, resulting in poor health, social, and economic outcomes for many Black men and communities. The United States has a moral obligation to eliminate the barriers that have kept too many Black men from fully participating in the workforce and economy. For generations, these barriers have taken a devastating toll on Black families and communities, hindering their economic growth and prosperity.

A range of intersectional solutions and interventions can support the ongoing economic recovery and result in economic empowerment and prosperity that includes Black men and their families. All that is needed is the collective will of the U.S. policymakers to right these wrongs.

The authors would like to thank Christian Weller, Lily Roberts, Marina Zhavoronkova, and Anona Neal from the Inclusive Growth department, as well as Nicole Lee Ndumele and Mia Ives-Rublee from the Rights and Justice department, for their thoughtful guidance, review, and support.