Opportunities Continue to Erode for White Men

Today’s employment estimates from the Bureau of Labor Statistics indicate that 121,000 new jobs were created in June, an improvement over the previous three months, but still below the long-term average job growth rate. Amid continuing weak job growth, the workers expected to fare best, white men, now face the same employment pressures as all other workers.

Because of weak job growth, wages have failed to keep pace with prices for years. That’s crimped wage gains for all workers, even white men, who are often seen as having more advantages than other groups. In some cases, this has meant that the gap between white men and other groups has narrowed — not because the situation has improved for other groups but because the situation for white men has eroded faster than for others.

Consider first the overall statistics. Today’s figures from the BLS show that the labor market still does not have a strong foothold. After declining for three months in a row, job gains grew again in June. Still, monthly job growth averaged an annualized 0.4 percent for this business cycle, which started in March 2001.

This is about one-sixth of the long-term average growth rate between 1947 and March 2001. In fact, in this business cycle, only six out of 63 months posted job gains that were above average. June was not among them, with an annualized growth rate of 1.1 percent, about half the long-term average of 2.2 percent.

Underlying the weakness in employment growth is a weakening housing market and a sagging retail sector. Construction employment dropped by 4,000 jobs in June and retail lost 6,600 jobs that same month. This may reflect the fact that a weakening housing sector provides less fuel for people’s consumption due to fewer refinancing opportunities.

At the same time, after months in which hourly wages failed to keep pace with inflation, workers may have seen a reprieve in June. After adjusting for inflation, hourly earnings in May 2006 — the last month for which data are available — were below those at the start of the recovery in November 2001 and only 0.7 percent higher than those in March 2001.

Hourly earnings had also declined for three months in row by May of this year. In June, though, non-inflation adjusted wages grew by 0.5 percent, stronger than in May.

Breaking down the figures by demographic characteristics shows that white men have lost more opportunities than white women. Take, for instance, employment growth. Household data show that monthly job growth averaged 0.6 percent for white men since March 2001. For white women it was 0.9 percent, or almost 50 percent faster.

This is not to say that white men don’t still enjoy a sizeable advantage over white women. According to today’s figures, the employed share of white men, currently at 71.2 percent, is 25.6 percent higher than that of white women. Yet the gap with white women has narrowed over time.

In July 1990 — the start of the prior business cycle — the employed share of white men was 33.8 percent higher than that of white women. In March 2001 — the end of the prior business cycle — the gap had already declined to 26.0 percent, to a large degree because the employment share of white men declined, while that of white women rose.

Opportunities have continued to disappear for white men since March 2001, as they have for white women, too, though at a slower pace. The employed share of white men dropped from 72.6 percent in March 2001 — the end of the last business cycle — to 71.2 percent in June of this year, a decline of 1.4 percentage points.

At the same time, the employed share of white women dropped by 0.9 percentage points. The upshot: Opportunities disappeared for both white men and for white women over this business cycle, but they did so faster for men than for women.

Another indicator of this trend is that wages in industries where white men are disproportionately prevalent have grown in line with average wages, which have barely kept pace with inflation. According to today’s figures, non-inflation adjust hourly wages in manufacturing rose by 15.4 percent since March 2001, compared to 15.9 percent for average wages economy wide.

In comparison, wages in the health care sector, where women are more prevalent, have risen by 22.4 percent between March 2001 and June 2006, before adjusting for inflation.

White men still enjoy healthy advantages over other groups, but they have been losing ground faster than, for instance, white women. All workers are struggling in this economy, of course, and today’s figures provide little hope of a seriously strengthening labor market that offers rising opportunities for everybody and strong wage gains. Only that kind of robust labor market will allow families to handle rapidly rising prices for important items, such as housing, education, and transportation.

Dr. Christian Weller is a Senior Economist at the Center for American Progress, where he specializes in Social Security and retirement income, macroeconomics, the Federal Reserve, and international finance.