Four Charts Show The Larger Burden Of The Recession On People Of Color

The country is in a deep recession amid a global pandemic. Millions of people are still out of a job. Many now face financial hardship, as the federal government’s initial additional unemployment benefits ended in July. Yet the pace of job growth has slowed in recent months, leaving many unemployed needing to wait longer to get a new job. That financial pain from longer-term unemployment falls more on Black, Latinx and Asian households than on Whites, as illustrated by four charts below.

The unemployment gap by race has widened over the course of the recession (see figure below). Many Black, Latinx and Asian workers experience systematic obstacles to getting and keeping a job. Unemployment rates for people of color are thus higher than for White workers. Over time, the unemployment rate for African-Americans has been about twice as high as that of White workers. For instance, in February 2020, just before the recession started, the unemployment rate for African-Americans was 5.8%, compared to 3.1% for White workers. In the first few months of the recession, the gap in the unemployment rate narrowed, with the Black unemployment rate soaring to 16.7% and that of White workers to 14.2% in April 2020. At that point, the Black unemployment rate was only 118% of the White unemployment rate (see figure below). This gap widened again, to 173%, by September 2020 (see figure below) as the unemployment rate for Black workers dropped more slowly than that for White workers. The pandemic did not remove the systematic obstacles for Black workers to finding a job.

Women of color have much higher unemployment rates than White men (see figure below). The unemployment rate for Black women was 11.4% in September 2020, that of Latina women 11.5% and that of Asian women was 9.7% then (see figure below). In contrast, White men had an unemployment rate of 6.9%, which was slightly lower than the 7.2% of White women.

The unemployment gaps between women and men are likely understated. In recent months, women have dropped out of the labor force at high rates. This was especially true for Latina women, but also for White, Black and Asian women. With fewer women looking for jobs, possibly because of inadequate childcare support amid rising childcare needs, their unemployment rates are lower than they otherwise would be.

Women have suffered more financial hardship in this recession than men. They earn less money and have fewer savings to fall back on in case of an emergency. Yet they have more caregiving responsibilities for children and other family members, which has entailed added demands on their time during the pandemic. And they often work in jobs with comparatively high risks of catching the virus. Caught between low pay and few savings, on the one hand, and high costs and health care risks, on the other hand, many women of color desperately need well-paying, stable and safe jobs. Those jobs are hard to come by and retain, particularly during a recession, in a system characterized by systematic discrimination and racism.

Asian workers have a particularly hard time finding a new job after unemployment (see figure below). The average length of unemployment for Whites was 22.0 weeks in September, compared to 23.8 weeks for Asian workers (see figure below). At this point in the recession, Black and Latinx workers spend about the same length of time looking for a new job as White workers (see figure below). However, given the gap in unemployment rates by race and ethnicity, a much larger share of Black and Latinx workers are out of a job for extended periods than White workers. Unemployment creates a greater risk for people of color because of higher unemployment rates, sometimes coupled with a longer employment duration, as in the case of Asian workers.

A college education is no insurance against disparate job market experiences for many Black, Latinx and Asian workers. Their unemployment rates increased more than that of White workers from February 2020 to September 2020 (see figure below). For example, the unemployment rate for college-educated Asians grew from 2.3% in February 2020 to 6.0% in September 2020 – a jump of 3.7 percentage points. In comparison, the unemployment rate for White workers with a college degree went up by 2.5 percentage points from 1.9% to 4.4% during that same time. Getting a college education is supposed to level the playing field, but this recession once again shows that is clearly not the case.

Black, Latinx and Asian workers suffer more in this recession than White workers do. They have higher unemployment rates, sometimes coupled with longer unemployment spells. Some of these gaps are now getting worse, with the recovery from the deep recession slowing. This inequality does not stop when unemployment ends. Even when people of color find a new job, they often get paid less than White workers. In the second quarter of 2020, for example, Black women working full time had median usual weekly earnings that were 69.8% of those of White men. The economic pain of the recession makes an already bad situation much worse for communities of color.