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African American unemployment crisis requires federal intervention, says EPI report

In a new Economic Policy Institute report, A jobs-centered approach to African American community development, Algernon Austin, Director of the Race, Ethnicity and the Economy program, explains that jobs are essential to improving African American communities. The report identifies jobs as the backbone of community development and outlines a plan for the federal government to ameliorate joblessness within black communities.

The plan has three components: the creation of public sector jobs, job training with job placement programs and wage subsidies for employers.

“Our economy should be one in which everyone who wants to work can find a job, but this goal has been elusive for African Americans in good times and bad,” said Austin. “A concerted national program is needed to reduce racial disparities that leave African Americans twice as likely as whites to be unemployed.”

The report concludes that federal intervention to aid black community development is necessary for the following reasons:

• African Americans still reside mainly in separate and unequal communities. In 2010, in the 100 metropolitan areas with the largest African American populations, 62.5 percent of African Americans would have had to move to achieve full African American–white integration.

• Unemployment rates for African Americans have been far higher than those of whites for the past 50 years, even in good times. In fact, since 1960 the African American unemployment rate has been about twice the white rate. Had African Americans had the same unemployment rate as whites in 2010, an additional 1.3 million African Americans would have been employed.

• Parental unemployment, and not simply low income, has negative effects on children’s educational outcomes. African Americans are twice as likely as whites to have had 10 or more spells of unemployment over their prime working years.

• Joblessness, although by no means the only factor producing higher crime rates in African American communities, appears to play a significant role.

• Neither educational advances nor suburbanization by African Americans has translated into reductions in the African American–white unemployment rate ratio.

• If a bold new approach is not developed to address the racial unemployment disparity, it is likely that African Americans will be condemned to unemployment rates that are twice those of whites into the foreseeable future.

The federal government should implement this three-part plan in counties and metropolitan areas of 25,000 people or more that have experienced unemployment of more than 6 percent every year in the previous 10 years.

The proposed program is at a scale large enough to produce a significant reduction in unemployment, and the effects of the proposed program are likely to be felt for several years after it is phased out. It is hoped that positive experiences with African American workers reduce employer biases, possibly leading them to institutionalize the outreach and hiring of African American workers.

Austin notes that since the policies would be applied to any community with persistently high unemployment, it would provide benefits to Latino, American Indian and some white communities.

Contact: Phoebe Silag or Karen Conner, news@epi.org 202-775-8810

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