Lack of Relief Funding Is Desperately Widening the Inequality Gap

200,000 Black Workers Dropped Out of the Labor Force in September

Black workers have the highest jobless rate in the US. (Photo by Michael M. Santiago/Getty Images)

By Emiene Wright

October 27, 2020

September saw 200,000 Black workers dropping out of the labor market, leaving the Black jobless rate at 12.1%, compared to 7% for whites, 8.9% for Asians, and 10.3% for Latinos.

The nation’s income inequality gap between Black and white Americans narrowed somewhat with the CARES Act’s $600 weekly unemployment supplement, but those gains have swiftly eroded since Congress stalled on passing a new stimulus package. 

In the time since, Black workers’ unemployment rate has reached historic highs, and their participation in the labor force has dipped three times as much as the rate among white people. Systemic biases have also left them least likely to receive benefits; for those who do receive payments, they are typically lower than their white peers.

September saw 200,000 Black workers dropping out of the labor market, leaving the Black jobless rate at 12.1%, compared to 7% for whites, 8.9% for Asians, and 10.3% for Latinos, USA Today reports

Sorting Fact From Fiction: Sign Up for COURIER’s newsletter.

The gap between Black and white workers doubled in size, according to Eliza Forsythe, a labor economist. “For Black workers, it’s gotten worse as the pandemic has dragged on,” Forsythe told the publication. “They’ve been less likely to bounce back and find jobs than other groups.”  

The percentage of African Americans working or actively looking for a job has consistently stayed above 60% since the mid-1970s. But back in April, as the coronavirus pandemic was well on its way to decimating 22 million jobs, the Black labor force participation rate dropped to 58.6%, its lowest level since 1974. 

At its height, Black unemployment climbed to nearly 17%, the highest in more than a decade. 

Lawmakers moved legislation to supplement unemployment aid and widen the eligibility for it, raising incomes for the lowest-paid workers in service fields where Black Americans are overrepresented. These were also the industries hardest hit by the coronavirus outbreak, in terms of losing workers to illness and economic repercussions from shutdowns to contain the virus’ spread. The CARES Act ameliorated the situation somewhat, but the rate remains below 60%. 

“The CARES Act filled in a lot of the inequalities,” Michele Evermore, senior researcher and policy analyst for the National Employment Law Project, told USA Today, “but now we’re definitely moving back to a place where the inequalities are coming out again.”

RELATED: Wealth and Wage Gaps Are Expanding Between Black and White Americans Under Trump

The white labor participation rate plunged in April, but reversed in the following months to dip only slightly from August to September, 61.8% to 61.6%. The Black rate dropped three times as much in the same period, sliding from 60.4% to 59.7%.

Structural racism plays a role in access to benefits: Black workers can face discrimination when applying for benefits and are more likely to believe they’re ineligible to qualify. From April to June, just 13% of unemployed Black workers received unemployment checks, while 24% of white workers, 22% of Hispanic workers, and 18% of workers from other races did, according to COVID Impact Survey data from the National Opinion Research Center at the University of Chicago.

Southern states, where more than one in four Black workers reside, have less generous unemployment benefits and were slower to implement the supplemental benefits than other parts of the country. They get less in unemployment insurance by nature of being concentrated in the least generous region. 

Also, the Washington Center for Equitable Growth found that unemployed Black workers—particularly Black women—are much less likely to receive jobless benefits due to “racist biases.” On average, the maximum weekly benefit for Black workers is $40 less than that of white workers.

“This is the danger of having policies that vary by state. The differences could mean that you end up with wide disparities in unemployment benefits since some states are more generous than others,” said Kathryn Edwards, an associate economist at nonprofit policy think tank RAND Corporation. “The perennial question about unemployment insurance now is whether this is helping Black workers as much as it’s helping white workers. Unfortunately, the evidence points to no.”

On Monday evening, the Senate adjourned until Nov. 9—ensuring Americans would not see another round of coronavirus relief before the election.

READ MORE: ‘You Don’t Care About Us’: Unemployed Americans Say Their Government Has Failed Them


CATEGORIES: Uncategorized
Related Stories
Share This