Economy

The One Unemployment Statistic You Need to Know to Understand How Badly the Deck Is Stacked Against Black America

The best state unemployment rate for blacks equals the worst state unemployment rate for whites.

Photo Credit: Maxx-Studio/Shutterstock

In December 2015, the national unemployment rate was 5.0 percent, down 0.1 percentage point since the end of the third quarter in September 2015. Forty-three states and the District of Columbia added jobs in the fourth quarter. All but seven states gained jobs in 2015, and all but eight ended the year with lower unemployment than in December 2014. Yet even as the recovery moves ahead slowly, conditions vary greatly across states and across racial and ethnic groups. In December, state unemployment rates ranged from a high of 6.7 percent in New Mexico to a low of 2.7 percent in North Dakota. Nationally, African Americans had the highest unemployment rate, at 8.3 percent, followed by Latinos (6.3 percent), whites (4.5 percent), and Asians (4.0 percent).

State unemployment rates, by race and ethnicity

Following is an overview of racial unemployment rates and racial unemployment rate gaps by state for the fourth quarter of 2015. We provide this analysis on a quarterly basis in order to generate a sample size large enough to create reliable estimates of unemployment rates by race at the state level. We only report estimates for states where the sample size of these subgroups is large enough to create an accurate estimate.

Trends among whites

In the fourth quarter of 2015, the white unemployment rate was lowest in South Dakota (1.5 percent) and highest in West Virginia (6.7 percent), as shown in the interactive map, which presents state unemployment rates by race and ethnicity. South Dakota also had the lowest white unemployment rate in the third quarter, while West Virginia has had the highest white unemployment rate for three consecutive quarters.

As shown in Table 1, which displays changes in state unemployment rates by race and ethnicity from the fourth quarter of 2007 to the fourth quarter of 2015, West Virginia is the state where the white unemployment rate remains most elevated above its pre-recession level—2.5 percentage points higher than in the fourth quarter of 2007. On the other hand, the white unemployment rate is at or below its pre-recession level in 20 states: Arkansas, California, Colorado, Connecticut, Illinois, Indiana, Iowa, Kentucky, Maine, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, New Hampshire, Ohio, Rhode Island, South Dakota, Vermont, and Wisconsin. The white unemployment rate is within 0.5 percentage point of its pre-recession level in another 16 states.

Trends among African Americans

During the fourth quarter of 2015, the African American unemployment rate was lowest in Virginia (6.7 percent) and highest in Illinois (13.1 percent). The lowest black unemployment rate in the country (Virginia’s 6.7 percent) was the same as the highest white unemployment rate (6.7 percent in West Virginia). Fifteen states had African American unemployment rates below 10 percent in the fourth quarter of 2015—in 10 of these states, the rate was lower than the fourth quarter national average for African Americans (9.1 percent).

As shown in Table 2, which displays the black–white and Hispanic–white unemployment rate ratios in the fourth quarter of 2015, New Jersey’s black–white unemployment rate gap was the smallest in the country. In that state, the black unemployment rate was 1.5 times the white rate, down from 2.1 times the white rate during the previous quarter. This change was due entirely to a significant drop in the state’s black unemployment rate during the fourth quarter. In Virginia, the state with the lowest fourth quarter black unemployment rate, the ratio was 2-to-1. The largest gaps were in the District of Columbia and Michigan, where the black unemployment rate was 5.4 and 3.4 times the white rate, respectively.

With regard to recovery, the African American unemployment rate is at or below its pre-recession level in nine states: Michigan, Mississippi, Missouri, New Jersey, New York, Ohio, South Carolina, Tennessee, and Texas. But this numerical “recovery” must be put in proper context because with the exceptions of Texas, New York, New Jersey, and Tennessee, each of these states also had black unemployment rates that were among the highest in the nation before the recession. Of the states where the black unemployment rate has recovered, only Texas, New York, New Jersey, and Tennessee have black unemployment rates lower than the national average for blacks. The black unemployment rate remains most elevated above its pre-recession level in Alabama (5.1 percentage points higher). Before the recession, the African American unemployment rate in Alabama was 5.3 percent—nearly half of what it is now.

Trends among Hispanics

The Hispanic unemployment rate was highest in Massachusetts (11.9 percent) and lowest in the District of Columbia (2.9 percent) and the state of North Carolina (4.5 percent). Massachusetts has had the highest Hispanic unemployment rate for two consecutive quarters, while North Carolina replaces Colorado as the state with the lowest Hispanic unemployment rate.

The Hispanic unemployment rate is at or below its pre-recession level in five states: Florida, Georgia, New York, North Carolina, and Washington. The Hispanic unemployment rate is within 0.5 percentage point of its pre-recession level in California and Texas. In the fourth quarter of 2007, Washington, Florida, and Texas had Hispanic unemployment rates lower than the national average among Hispanics—a distinction they continue to hold.

The Hispanic unemployment rate is the same as the white rate in North Carolina, while the Hispanic–white unemployment rate gap is largest in Massachusetts, where the Hispanic unemployment rate is 3.4 times the white rate.

Trends among Asians

The Asian unemployment rate was lowest in Hawaii (2.5 percent) and highest in New York (4.3 percent). The Asian unemployment rate remains most elevated above pre-recession levels in New Jersey (1.8 percentage points). The Asian unemployment rate was below the pre-recession levels in California, Illinois, Washington, and Texas, and within 0.1 percentage point of the pre-recession level in Hawaii.

Methodology

The unemployment rate estimates in this issue brief are based on the Local Area Unemployment Statistics (LAUS) and the Current Population Survey (CPS) from the Bureau of Labor Statistics. The overall state unemployment rate is taken directly from the LAUS. CPS six-month ratios are applied to LAUS data to calculate the rates by race and ethnicity. For each state subgroup, we calculate the unemployment rate using the past six months of CPS data. We then find the ratio of this subgroup rate to the state unemployment rate using the same period of CPS data. This gives us an estimate of how the subgroup compares to the state overall.

While this methodology allows us to calculate unemployment-rate estimates at the state level by race by quarter, it is less precise at the national level than simply using the CPS. Thus, the national-level estimates may differ from direct CPS estimates.

In many states, the sample size of these subgroups is not large enough to create an accurate estimate of their unemployment rate. We only report data for groups which had, on average, a sample size of at least 700 in the labor force for each six-month period.

Valerie Wilson is the Director of the Program on Race, Ethnicity, and the Economy at the Economic Policy Institute. Prior to joining EPI, Wilson was an economist and vice president of research at the National Urban League Washington Bureau. She has written extensively on various issues impacting economic inequality in the United States—including employment and training, income and wealth disparities, access to higher education, and social insurance—and has also appeared in print, television, and radio media. Valeries holds a Ph.D. in Economics from the University of North Carolina at Chapel Hill.

Sign Up!
Get AlterNet's Daily Newsletter in Your Inbox
+ sign up for additional lists
[x]
Select additional lists by selecting the checkboxes below before clicking Subscribe:
Activism
Drugs
Economy
Education
Environment
Food
Media
World