According to today’s jobs report, black and Latino unemployment remain at perilously high levels. The national unemployment rate is at 9.1 percent while Latinos fight 11.3 percent unemployment and black workers hover at an astonishing 15.9 percent. White Americans face a difficult but much lower 8.1 percent unemployment. They haven’t escaped the nation’s economic turbulence unscathed but they are financially better off than blacks and Latinos by and large. Without access to sufficient and sustained income through employment, weak job growth will continue to trap Latinos and African Americans in a cycle of dramatically depressed wealth and fewer asset-retaining opportunities.
To contextualize the depth of unemployment for people of color, the Latino unemployment rate has remained about two times or more of its pre-recession levels since January 2010—steadily rising since the end of 2006. African Americans have endured stagnated unemployment at 9.2 percent or higher—as high as 16.3 percent—since early 2008. This news is not new but it’s crucial in an ongoing debate about job creation, social service funding, high national debt, and a very slow recovery. Namely, investing in jobs for people of color is good for the economy in the long run.
Even in the “recovery” African Americans are still the most likely to be unemployed and to economically languish in comparison to other demographics of working people. This lack of employment, even in more promising business cycles, compounds the already high levels of black unemployment experienced even before the recession’s late 2007 start for African Americans. Since employment outcomes for black Americans were already quite low before then, continued dearth of employment opportunities further entrenches this systemic unemployment to an abysmal degree.
Likewise, Latinos experienced the Great Recession far in advance of other groups. They’ve found themselves in a precarious financial decline as a result. When whites and blacks saw unemployment rise in December 2007 (the beginning of the Great Recession for whites and blacks), Latinos already had been on an unemployment roller coaster since the first quarter of 2007—beginning the year at a critical employment deficit. This earlier slide into employment decline meant Latinos had significantly reduced access to income and measurably lost more than half of their pre-recession assets on average. (see chart)
The recession really walloped blacks and Latinos as poor employment prospects decimated the income and savings prospects of households of color. The Pew Research Center recently compared pre-recession wealth to mid-recession wealth for whites, Latinos, and African Americans. Their findings show financial devastation for the latter two groups. (see chart at right)
African Americans saw their median household net worth halved from 2005 to 2009. The average wealth of black American households dipped from $12,000 to about $5,600. And Latinos saw almost two-thirds of their median household net worth evaporate with an average 2009 balance at roughly $6,000 from 2005’s median $18,000.
Against the backdrop of weak job growth and a depressed housing market, the trends highlighted by the Pew report and other studies continued unabated. It’s reasonable to assume that household wealth has continued to decline since their data were collected.
Pew’s research further illustrates that the real cost to American security isn’t the high cost of public investment but the long-term exclusion of large swaths of the population from economic prosperity. Chronic unemployment among people of color directly translates into less resources to save, lower holdings in wealth, and the ultimate depletion of assets. Routinely liquidating assets to survive hard times means less incentive to spend, less economic stimulation for the macro economy, and greater dependence on public services that supplement the cost of living.
We are facing generations of underemployment, financial insecurity, and enormous levels of inherited debt and resource constriction for people of color and white Americans alike (but clearly to extremely different degrees) unless we create jobs for those who can and want to work in America. Debt that ultimately serves people in need is necessary debt. Shifting the economic narrative from spending to job creation is central to moving America’s best interests forward.
Folayemi Agbede is the Special Assistant for Progress 2050, a project of the Center for American Progress that develops new ideas for an increasingly diverse America.