Column: Black unemployment is rising again, undermining a Trump boast on economic growth
One aspect of American life that President Trump never tires of taking credit for is economic growth — specifically, job growth. So you won’t hear him pointing out the disturbing discrepancy in the employment figures between white and black workers.
Economists and economic commentators have started to notice however, because it’s hard to miss. Over the last several months, as the white unemployment rate has continued to trend lower, the black unemployment rate suddenly has turned higher.
That knocks one of Trump’s economic talking points for a loop. In January 2018, he hared off after a critic, the rapper Jay-Z, on Twitter, boasting that he was creating an economic nirvana for African Americans.
Having a president who seems to think that white men, starting with himself, are the biggest victims in society could be part of the problem.
— Economist Dean Baker
“Somebody please inform Jay-Z that because of my policies, Black Unemployment has just been reported to be at the LOWEST RATE EVER RECORDED!” Trump tweeted.
Monthly unemployment readings are notoriously volatile, but the divergence also can be seen in multi-month averages. The trend contradicts one enduring truism about black and white unemployment rates — that although black unemployment is consistently higher than the statistic for whites, the gap narrows as unemployment falls. In months dating back to late 2018, total unemployment has generally fallen but the black-white gap has widened.
“The employment prospects of Black men may actually be deteriorating even as the overall labor market continues to improve,” progressive economist Dean Baker noted last week.
The gap points to a question that should be raised more consistently: Who does the Trump economy serve? Macroeconomic statistics have been strong, as has the stock market. But the benefits of this economic expansion have been funneled overwhelmingly to the rich. They received most of the tax cut Trump signed in December 2017, and they’ve received tens of billions in payouts from corporations enjoying the tax cut in the form of stock buybacks and dividends.
Meanwhile, the middle and working class are about to take the cost of Trump’s trade war in the slats. As my colleague James Peltz reported Monday, tariff-driven price increases will affect apparel, footwear, toys and electronics, creating yet another tax on average consumers.
It’s also possible that the recent reversal is short-lived, and that black unemployment soon will continue its longer-term decline. As it happens, the reasons for the uptick in black unemployment are hard to pinpoint. It doesn’t appear to result from a surge of black workers into the job market, a phenomenon that can push the unemployment rate temporarily higher. The black participation rate — the share of eligible workers in the workforce, was 62.5% in October, and 62.5% in April.
Baker conjectures that a lack of enforcement of anti-discrimination laws under the Trump administration may play a role. “Having a president who seems to think that white men, starting with himself, are the biggest victims in society could be part of the problem,” he wrote. “This may encourage many employers to think that it is okay to discriminate again.”
There’s little question that enforcement has ebbed. The Equal Employment Opportunity Commission lost its quorum at the end of 2018, and wasn’t restored to functional strength until the confirmation of Republican Janet Dhillon as chair on May 8.
As we’ve reported, the Trump administration has been less than proactive in standing up for workers’ rights; Labor Secretary Alex Acosta has rolled back Obama administration initiatives on overtime pay and enforcement of wage and hour violations at fast food stores and other business. He also has come out against raising the federal minimum wage, which hasn’t been increased in nominal terms since 2009 and peaked in inflation-adjusted terms in 1968.
Under Trump, the National Labor Relations Board has reversed a 2014 decision that narrowed employers’ ability to declare their workers to be “independent contractors.” That eliminated the affected workers’ rights to unionize and made them more vulnerable to economic abuse by employers.
While those actions affect workers of all races and genders, the narrowing of such rights tends to fall heaviest on lower-wage and minority workers.
That brings us to the numbers. The black unemployment rate bottomed out in May 2018 at 5.9%, ratcheted back up to as high as 6.6% in July, then fell again to 6.0% in November. Since then it has been rising again, reaching 7.0% in February before settling back to 6.7% in March and April, the latest months on record.
During this period the white rate has trended down fairly consistently, going from 3.4% in November to 3.1% in April.
Smoothing out the statistics with a moving three-month average shows the trend more distinctly. The black rate bottomed out at 6.1% in September-November 2018, but shot up to 6.8% in December 2018-February 2019. It has remained there for the next two three-month spans.
As for the black-white unemployment gap, it peaked at 8.5 percentage points in August 2011, when the white rate of 7.9% was beginning to trend downward from its recent peak of 9.2% in October and November of 2009 but the black rate of 16.4% was still on the rise.
The differential fell to 2.4 percentage points in May 2018, but has since widened to 3.6 points.
Trump hasn’t seemed to show much concern about the reversal in the black unemployment rate, but he should. Not only does it undermine his rhetoric, but it may be a hint that his economic expansion rests on a foundation of sand. If employment at the lower end of the wage scale isn’t picking up, the malady may soon spread to higher-paid sectors.
One way or another, the apparent trend shows that government policies are failing a large swath of the population. That’s nothing for Trump to brag about.
Keep up to date with Michael Hiltzik. Follow @hiltzikm on Twitter, see his Facebook page, or email firstname.lastname@example.org.
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