A woman looks for information on the application for unemployment support at the New Orleans Office of Workforce Development in New Orleans, Louisiana, April 13, 2020, photo by Carlos Barria/Reuters

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(The RAND Blog)

Laid Off More, Hired Less: Black Workers in the COVID-19 Recession

A woman looks for information at the New Orleans Office of Workforce Development in New Orleans, Louisiana, April 13, 2020

Photo by Carlos Barria/Reuters

by Jhacova Williams

September 29, 2020

This COVID-19 recession/recovery is akin to a schoolyard game of kickball. As the economy tries to rebound, companies are adding workers to their team, yet a group is being picked last—Black workers.

This isn't the first time, either. When the Great Recession began, Black workers' unemployment rate increased to double digits and remained that high for more than six years. In comparison, the unemployment rate among white workers never reached double digits during the Great Recession or its recovery.

It took more than 10 years for Black workers' incomes to return to their pre-recession levels.

While some may point to differences in education, age, and experience to explain these differences, these factors do little to explain racial disparities in employment. In fact, at every education level, Black workers have higher unemployment rates compared to their white counterparts. For example, Black workers with college degrees have unemployment rates similar to that of white workers with high school diplomas.

At every education level, Black workers have higher unemployment rates compared to their white counterparts.

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Despite this history, the beginning of 2020 arrived with positive news: The unemployment rate among Black workers was the lowest ever (although still double that of white workers). Of course, from March to April everything changed for everyone because of the pandemic. In April, Black workers' unemployment rate was 16.7% compared to a rate of 14.2% for white workers.

Figure 1 details what happened. While a similar rate of Black and white workers were permanently laid off, a higher percentage of white workers remained employed.

Figure 1: Transitions Among Employed Workers by Race, March–April

Transitions Among Employed Workers by Race, March to April

Source: Current Population Survey, March–April Basic Monthly data from IPUMS-CPS.

Blacks

Whites

Still employed

76.01%

81.97%

Temporary layoff

11.26%

8.30%

Permanent layoff

5.32%

4.98%

No longer in the labor force

7.41%

4.75%

As businesses were allowed to reopen, unemployment rates among white workers began to fall quickly, dropping down below 10% in July. The picture was different for Black workers, whose unemployment rate increased slightly between April and May and fell slowly in the following months. By August, the white unemployment rate was 7.3%; for Black workers, it was 13.0%

Figure 2: Unemployment Rate by Race During the Pandemic

Unemployment Rate by Race During the Pandemic

Source: U.S. Bureau of Labor Statistics' Employment status of the civilian population by race, sex, and age, April–August, 2020.

April

May

June

July

August

White unemployment rate

14.2%

12.4%

10.1%

9.2%

7.3%

Black unemployment rate

16.7%

16.8%

15.4%

14.6%

13%

Analyzing what happened with workers on temporary layoff—those who thought they would be called back to work within six months—also shows racial disparities. Figure 3 shows that as the pandemic continued, a higher percentage of white workers were called back to work each month compared to Black workers. Examining individuals who downgraded to permanent layoff shows a similar story: As the pandemic dragged on, a higher percentage of Black workers reported being permanently laid off than did white workers.

Figure 3: Percentage of Temporary Layoff to Employment vs. Permanent Layoff

Percentage of Temporary Layoffs to Employment vs. Permanent Layoffs

Source: Current Population Survey, April–August Basic Monthly data from IPUMS-CPS.

Of Workers on Temporary Layoff

Moved to Employment

Moved to Permanent Layoff

Blacks

Whites

Blacks

Whites

April–May

33.52%

35.40%

15.28%

15.17%

May–June

30.49%

39.06%

17.94%

19.41%

June–July

28.51%

31.35%

26.62%

19.43%

July–August

36.19%

38.30%

16.98%

17.35%

These figures echo two patterns that have affected Black workers in past recessions. And if those are any guide, getting back into a job later rather than sooner could do lasting harm to millions of Black Americans' incomes and wealth accumulation for years to come.


Jhacova Williams is an associate economist at the nonprofit, nonpartisan RAND Corporation. She is an applied microeconomist focusing primarily on economic history and cultural economics.

Commentary gives RAND researchers a platform to convey insights based on their professional expertise and often on their peer-reviewed research and analysis.