Black unemployment rises in August jobs report despite more job seekers

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  • The August 2021 jobs report showed that black unemployment rose in the past month, compared with a decline in white, Asian and Hispanic workers.
  • The increase is even more troubling as the labor force participation rate among black workers rose last month and the white rate tied with 61.6%.
  • Black workers with an associate degree had an unemployment rate of 6.9%, while white high school dropouts had an unemployment rate of 5.8%.

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The reduction in the number of headline jobs was disappointing, but the August 2021 jobs report showed that black workers are facing an even greater struggle to find employment than job seekers from other races.

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Employers added only 235,000 payrolls last month, far less than the expected 720,000. The unemployment rate fell from 5.4% to 5.2% as estimated.

But the unemployment rate among black workers rose to 8.8% in August, up from 8.2% in July. Meanwhile, the white unemployment rate fell from 4.8% to 4.5% and the Asian unemployment rate fell from 5.3% to 4.6%.

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The unemployment rate for Hispanic and Latino workers decreased from 6.6% to 6.4%.

Most economists and President Joe Biden pointed to the rising number of cases of the Covid-19 delta variant to the sluggish overall job numbers. Experts have also pointed to loss of consumer confidence due to slowdown in hiring.

The rise in black unemployment is even more troubling in light of the fact that the labor force participation rate among black workers rose last month and the rate for white workers is tied to 61.6%.

In other words, a large proportion were unable to find a job, despite a higher percentage of black people working or looking for work.

Employers are the problem, said AFL-CIO chief economist William Spriggs, a former chairman of Howard University's economics department. He noted that, in August, the unemployment rate among black workers with associate degrees was higher than among white high school dropouts.

Specifically, black workers with associate degrees saw an unemployment rate of 6.9%, while white high school dropouts had an unemployment rate of 5.8%. The unemployment rate across all races was 7% for people without a high school diploma, while the unemployment rate for black people with a high school diploma in the same age group was 10%. These numbers challenge the long-standing belief that greater academic achievement will be rewarded in the workplace.

Spriggs told CNBC on Friday, "Many people get jobs, but a large proportion of those who move out don't. Therefore, the black unemployment rate is rising because employers are still passing black workers through." Huh." "When you look at those numbers, it's clear that employers are saying, 'We need workers, but absolutely not.'"

Spriggs' comments refer to a widespread complaint among US employers that they are unable to find workers to fill the record number of job openings. The Labor Department reported last month that job opportunities reached a record 10.1 million on the last day of June.

Some employers, and restaurants in particular, are scrambling to lure workers into wage increases, bonuses and signing more generous benefit plans.

For example, Walmart said Thursday that it is raising hourly wages by at least $1 for more than 565,000 store employees. Kristen Brody, a fellow at the Brookings Institution's Metropolitan Policy Program, said these incentives should be significant enough, however, to help reduce barriers preventing people from working.

"Is that enough to cover hair care?" He asked. "Are you raising salaries enough that people will be able to cover the cost of being able to get that job?"

Business leaders, including the CEO of the Chamber of Commerce, have blamed a lack of skilled labor, Covid-era jobless benefits and lack of childcare for employers' struggles.

However, Spriggs said there is one primary explanation for the extremely high unemployment rate among black workers -- discrimination.

"When you see black workers struggling, but the labor market is doing well, that's a sign of employers showing their preference," Spriggs said.

CNBC Politics

Read more about CNBC's politics coverage:

  • Biden blames delta variant, unvaccinated people for lower-than-expected jobs report
  • Black unemployment rises in August jobs report despite more job seekers
  • Retired GOP Sen. Toomi says Trump shouldn't lead ticket in 2024

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