It feels especially difficult to secure a job nowadays. The economy added only 22,000 jobs in August as job growth in nearly all industries has decreased or remained stagnant. The effects of what Mark Zandi, the chief economist at Moody’s Analytics, calls a “jobs recession” can be seen everywhere, from the rising length of time workers are unemployed to the growing pool of unemployment insurance claims. It can also be seen in rising unemployment rates for all members of the Black community – men, women and youth alike.
Since the beginning of this year, the Black unemployment rate has risen to 7.5%, its highest level since 2021. As a kind of “canary in the coalmine,” Black workers have historically been the first to have their employment terminated when times get tough for businesses. While the current labor market has been described as a no-hire/no-fire environment, this doesn’t adequately apply to the situation of Black Americans.
Roughly 300,000 Black women left the labor force between February and April this year. To be part of the formal labor force, one has to be either employed or unemployed (actively looking for work). While many news reports reference the labor force level, the change in the overall employment level also displays a striking trend.
Since February, 300,000 fewer Black women are employed overall. Breaking the data down by age shows that Black women ages 25 to 40 have been most impacted by this downturn in the economy. This indicates that early and middle-career Black women professionals are having a difficult time keeping stable employment.
Furthermore, as the number of employed Black women has plummeted, 200,000 Black women have become unemployed since May alone. This has pushed their unemployment higher to 6.7%. This also means that over 100,000 are neither employed nor unemployed, but have simply left the labor force entirely.
A more expansive definition of unemployment rates is the U-6 rate, commonly referred to as the rate of underemployment. It comprises unemployed workers, people who are unemployed but not actively looking for work (also known as discouraged workers) and part-time workers who want full-time employment. The U-6 rate for working-age Black women has increased to 12.6%, its highest level since 2021. Similarly, Black men and Black youth have seen an increase in underemployment this year.
The only industries that consistently added jobs this year were the healthcare and hospitality industries. For Black women as a whole, nearly 4 out of 10 are employed in the former, which has become one of the only pathways to stable and high-paying employment.
Overall, another 1 in 4 Black women work in the finance, public administration and production business services industries, where growth has been either stagnant or declining. This is due to a combination of federal workforce cuts, AI disruptions and corporate downsizing. Additionally, rollbacks to inclusive hiring practices may be playing a role in pushing Black women into unemployment or out of the labor force entirely.
Black men have also seen an increase in unemployment and underemployment this year. Two out of 5 Black men work in the production and logistics sectors. However, since the start of the current administration’s global trade wars in April, these industries have lost almost 100,000 jobs as companies scale back hiring amidst heightened economic uncertainty.
These job losses have hit Black men hard, pushing their unemployment rate up 1.5 percentage points since April. Additionally, nearly half of the federal workforce cuts have been in the Department of Defence (DOD), Agriculture and Treasury. Though a breakdown by both race and sex is not available for federal workforce employees, we know that these departments employ large numbers of Black people. Furthermore, the Black workforce within the DOD (which accounts for a quarter of total job losses) likely skews toward Black men given that the DOD is majority male.
Not only has unemployment been at historic highs when it comes to Black adults, but the joblessness rate has also risen for Black youth as well. Black youth have the highest jobless rate of any race and age group, peaking at 24.1% in August. As high as Black youth unemployment is, the underemployment rate is even higher. The hospitality and retail industries typically employ lots of young people during the summer months. But between May and July, those sectors barely grew at all, increasing by only 1,000 and 3,000 jobs respectively. This stagnation means fewer opportunities for Black youth, which can have detrimental consequences for sustainable employment later in life.
The entire Black community is being hit by the nationwide hiring freeze. While the odds of federal workforce development opportunities to remedy this trend are quite unlikely, some actions can be taken by local and state officials. In fact, some Black-led cities are stepping up, including in Baltimore and Chicago, which has led to meaningful change for youth, their families and their communities.
To increase employment opportunities for Black men and women, local leaders can prioritize job retraining (especially for jobs at risk due to AI) and entrepreneurship pathways through creating novel funding programs and micro-financing opportunities. Local governments can partner with nonprofits engaged in job retraining, especially in high-demand industries such as healthcare. The African American Trade Association, an NCRC member, has a program aimed at increasing the number of Black healthcare workers and installation/maintenance workers in the renewable energy sector. The Supplier Diversity Program in the City of Cambridge, Massachusetts and the Alabama Minority Vender Program are also examples of ways states and municipalities can better bolster Black economic mobility.
The current situation has roots going back before even the creation of the United States. It can be summarized by a quote from the former chairman of the NAACP Julian Bond: “As legal slavery passed, we entered into a permanent period of unemployment and underemployment from which we have yet to emerge.” For a community that has endured grotesque forms of human bondage, apartheid and racial violence, the current dilemma will be but a footnote in the long story of emergence from slavery to freedom.
Joseph Dean is the Jr. Racial Economic Research Specialist with NCRC’s Research team.
Photo credit: Roberto Hund via Pexels.
