Data Show Why Trump's Boasts of Record Jobs For Black Americans Are Misleading
(Bloomberg) -- President Donald Trump has touted a record-low unemployment rate for black Americans in recent months as evidence of his own success, a talking point he may return to during his annual State of the Union address Tuesday evening.
But the rosy numbers sidestep a big decline in labor-force participation among African Americans in recent decades, as well as meager wage gains that have lagged those of their white counterparts.
“So if African-American unemployment is now at the lowest number in history, median income the highest, and you then add all of the other things I have done, how do Democrats, who have done NOTHING for African-Americans but TALK, win the Black Vote?” Trump tweeted in September. “And it will only get better!”
The black unemployment rate did fall to 5.9 percent in May 2018 -- the lowest in data back to 1972 -- and at 6.8 percent last month was still lower than at any time from 1972 to late 2017.
However, the decline mainly reflects a broader drop in American unemployment over the last several years, and black unemployment has failed to reach a record low when compared to white unemployment. The ratio of black unemployment to white unemployment was 1.9 in January, which means African Americans are still almost twice as likely to be counted as unemployed as white Americans. That ratio fell as low as 1.7 in 2009.
More importantly, as with the overall unemployment rate, focusing on black unemployment is incomplete because it excludes people who have stopped looking for work and are therefore no longer counted as unemployed -- meaning they are excluded from labor-force tallies.
Similar to the trend for their white counterparts, labor-force participation for African Americans between the ages of 25 and 54 -- also known as prime working age -- has yet to recover to 2008 levels, and is still well below the levels achieved in 1999 and 2000.
And while median weekly earnings for African Americans did reach a record high in the final three months of 2018, the details are less impressive. Median weekly earnings have barely kept up with inflation in the data going back to 2000: price-adjusted wages for black Americans have risen only 2.2 percent, compared with a 6.6 percent increase for white Americans.
Faster wage growth for white Americans than that for black Americans pushed the disparity to a record in the third quarter of 2018, before a slight pullback in the fourth quarter. So, whereas in 2000, the median white American made 25 percent more than his or her black counterpart on a weekly basis, in 2018 the gap was 32 percent.
The relatively low labor force participation rate for African Americans looks much worse when one zooms in on men, who have been disproportionately affected by the war on drugs and the rise of mass incarceration, and hit hard by the decline of manufacturing.
As a result, labor force participation for African-American men ages 25 to 54 averaged 82.7 percent in the 12 months through January, compared with 90.2 percent for prime-age white men. Those figures exclude people who are currently incarcerated, meaning the numbers would look worse if they counted such Americans as non-participants in the labor force.
Since it bottomed in mid-2014, labor force participation for black male Americans has risen 2.4 percentage points. At that rate -- without a more targeted policy approach -- it would take almost 10 more years of uninterrupted economic expansion to return to around 88 percent, the level that prevailed on the eve of the 1990-1991 recession.
©2019 Bloomberg L.P.