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A year ago, the incoming Biden administration vowed to focus on the Black unemployment rate to gauge the actual state of America's labor market.
Broad metrics often “fail to capture the experience of the many people who are left behind, particularly people of color,” Biden’s nominee to head the Council of Economic Advisers said during her Senate confirmation hearing last year. And two incoming officials had written in 2020 that the Federal Reserve should focus “not the overall unemployment rate, but the Black rate.”
But the gap between Black and white job seekers remains as wide as ever as Biden marks his first full year in office. In December’s jobs report, the Black unemployment rate rose month-over-month, from 6.5% to 7.1%, making it the only major group to see higher unemployment rates.
“We have to be a lot more intentional when it comes to Black Americans,” Labor Secretary Marty Walsh acknowledged in reaction to those jobs numbers during a recent episode of Yahoo Finance’s Influencers with Andy Serwer.
Walsh noted that not only are Black Americans more likely to be unemployed, but those who can find work often have lower paying jobs. “We have to create better pathways,” he says.
During an event Monday to mark Martin Luther King Jr. Day this week, Treasury Secretary Janet Yellen added, "Our economy has never worked fairly for Black Americans."
Immediately before the pandemic, the Black unemployment rate stood at 6.0%, double the 3.0% rate for white Americans. At the peak of the lockdowns, both numbers spiked in roughly equal measure — with the Black unemployment rate peaking at 16.7% in May 2020.
But the recovery for Black Americans has lagged over the past two years. As of December 2021, the Black unemployment rate stood at 7.1%, still well away from pre-pandemic levels. Meanwhile, white Americans enjoy a 3.2% unemployment rate, almost matching the rate pre-pandemic.
The Biden administration may have underestimated the scope of the problem, according to Lorena Roque, a senior policy analyst at the progressive think tank American Progress.
"It's not a single policy that's going to solve these labor market disparities; it's really going to take a combination of so many things," she said.
Relief ‘money doesn't last forever.’
Economists have weighed in with a range of explanations for the gap. The recovery has “two realities," William Rodgers, vice president of the Federal Reserve Bank of St. Louis Institute, told Yahoo Finance earlier this month after the December job numbers came out.
Those communities not bouncing back as quickly can attribute the lag to a historic lack of investments by the government in “the scaffolding that can help local communities thrive,” he said.
More recently, Black women may have had a tougher time finding work than Black men. Kristen Broady, a fellow at the Brookings Institution’s Metro program, said this week that a closer reading of the December numbers shows that the unemployment rate for Black women jumped while the rate for Black men improved slightly. She attributed the divergence largely to Black women coming back into the labor force because of the end of COVID relief programs.
The labor force participation rate for Black women increased from 60.3% to 61.1% between November and December. That happened in spite of the Omicron variant “because savings ran out, kids are going back to school so they can get out there and try to find a job. But just because they're looking for a job doesn't mean they found one.”
Meanwhile, she noted, increased relief money from the government "doesn't last forever.”
‘Big components that I feel strongly about’
December saw the end of a host of COVID-19 relief programs instituted over the last few years. The most notable expiration was the end of the expanded Child Tax Credit, which delivered its last monthly payment in mid-December.
During a press conference on Wednesday, President Joe Biden responded to a question about the fate of the expanded Child Tax Credit in his stalled Build Back Better agenda by saying it was one of the “big components that I feel strongly about that I’m not sure I can get in the package.”
Also during Wednesday’s marathon press conference, Biden briefly brought up another provision in his proposed package — money for expanding child care — which advocates often note would help the labor force. More help with child care would “mean so much for the nearly 2 million women who’ve left the workforce during the pandemic because of things like child care," Biden said.
For her part, Broady argues that protections like the eviction moratorium and child tax credit help workers but are blunted when they are accompanied by uncertainty. “Those things stress people out” when it’s unclear how long a benefit can be relied on, she said.
Meanwhile, the Labor Secretary points to an effort, ongoing over the last year in conjunction with the Departments of Commerce and Education, to spend money more effectively and put disadvantaged Americans on a pathway to “the jobs of the future.”
"Some places have done a really good job,” he said. But, he added, "There's not enough of those stories around America yet.”
Ben Werschkul is a writer and producer for Yahoo Finance in Washington, DC.