(Bloomberg) -- The U.S. labor market in 2021 notched a historic recovery after unprecedented losses driven by the Covid-19 pandemic. But inequalities persisted for women and Black workers.
The turnaround has been more rapid than after prior recessions, with 6.4 million jobs created in one year. While it wasn’t nearly enough to offset the 9.4 million job losses of 2020, it’s still a remarkable upswing. December data published by the U.S. Labor Department showed an unemployment rate that tightened to a fresh pandemic low of 3.9% and a boost in wages as employers sought to retain and attract staff.
These gains didn’t extend to everyone, however. The jobless rates of White and Hispanic workers have steadily declined throughout the year, and are getting close to pre-pandemic numbers. But women’s participation in the labor force, while improving, remains well below its pre-Covid level. And Black Americans didn’t fare as well as the other groups, ending the year with an unemployment rate of 7.1%.
The Biden Administration has aimed to improve the outcome for minority workers, and the Federal Reserve last year instituted a “broad and inclusive” maximum employment goal -- without defining exactly what it meant. Still, at the end of 2021, the gap between Black and White workers is wider than it was in February 2020.
“It’s really unfortunate,” Labor Secretary Marty Walsh said in an interview on Bloomberg TV, commenting on an increase in Black unemployment in December. “We’re working to make sure that we continue to create opportunities whether it’s through job training and work force development.”
Here is how various groups fared in the 2021 labor market:
African Americans
Black and Hispanic workers took the brunt of the impact at the onset of the pandemic in 2020, as they make up a disproportionate share of low-wage jobs that were hit first and the hardest.
Today, minorities not only continue to lag behind the broader population in terms of employment, but the racial gaps are getting worse by some metrics. The Black jobless rate of 7.1% in December is more than double the 3.2% rate for Whites.
The contrast between the two groups was even sharper for women at the end of 2021. Black women saw an uptick in their jobless rate in December, as 151,000 more were unemployed in the month, the biggest increase since April 2020.
Women
More women came back to the workforce in the final months of 2021. That led to an uptick in the participation rate for prime-age female workers -- those who are 25 to 54 years old -- to 75.9%. It remains below that of men’s and lower than before the pandemic.
The Covid-19 recession wiped out years of advances in wages and employment for women, who still bear the brunt of child care. This remains one of the key reasons for people staying on the sidelines. One takeaway from 2021 is that while some women came back to work as schools reopened and the government’s child tax credit supplemented the high cost of care, many have opted to leave the labor force entirely.
Hispanic Workers
Hispanic workers made great strides in 2021 after their unemployment rate skyrocketed higher than other groups in 2020. Their unemployment rate nearly halved in one year to 4.9% last month.
Participation rates have also improved for both men and women, though remain below the pre-pandemic period, as with other groups. A recovery boom in the construction, hospitality and agriculture sectors have helped, as Latinos are over-represented in those industries.
©2022 Bloomberg L.P.
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