Though the unemployment rate for Blacks dropped from 12.5 percent to 11.9 percent in December, labor experts are not cheering the news, explaining that the rate is likely going down not because more African-Americans are finding jobs but because discouraged workers have simply stopped looking.
That explanation becomes even more depressing for the Black community considering that Congress appears unable to find enough support to pass an extension of benefits for the long-term unemployed, meaning 1.3 million people of all races are now in dire straits because they have no money coming into their households as their benefits ended on Dec. 28.
Republicans blocked every effort in the Senate to pass a bill extending benefits for either three months or another 11 months and Democrats were unable to garner the 60 votes needed to overcome a Republican filibuster.
“The unemployment rate gave a false impression,” Valerie Wilson, an economist and vice president of research at the National Urban League Policy Institute, told NNPA News. “People have left the labor force.”
“A good portion of the drop in the unemployment rate came from people dropping out of the labor force,” said Steven Pitts, economist at the Labor Center at the University of California at Berkeley, Calif.
According to economists, the more than 4 million people who have been out of a job for more than 27 weeks have a destructive effect on the overall U.S. economy. While their skills atrophy, their networks fade, and many of them have dropped out of the workforce entirely, it weakens the total potential of the economy.
“The U.S. economy will never be as productive as it could have been had we figured out how to get people back to work more quickly,” Brad Plumer writes in the Washington Post. “And those scars are still getting deeper.”
Instead of looking at the unemployment rate, economists say the labor force participation rate is a better barometer of the workforce because it measures workers who are employed and those who are actively looking for work. That number was just 62.8 percent in December, the lowest it’s been since 1978.
For Blacks, the participation rate was 60.5 percent in November and 60.2 percent in December, compared to whites who declined from 63.2 percent in November to 63 percent in December. The economy shed more than 300,000 workers in December and only added 74,000 jobs.
“In December there were 20.6 million workers who were either unemployed or underemployed (10.4 million officially unemployed, 7.8 million involuntary part-time workers, and 2.5 million marginally attached),” wrote Heidi Shierholz, an economist at the Economic Policy Institute. “Racial and ethnic minorities have been particularly hard-hit by underemployment.”
The underemployment rate for blacks was 21 percent and the underemployment rate for whites was 11 percent, according to the EPI.
“The biggest challenge besides the labor force participation rate is long-term unemployment that affects African-Americans disproportionately,” said Wilson. She said, “It was very short-sighted of Congress to allow unemployment compensation to expire.”