A networking and recruitment event for professionals of color in Minneapolis, MN.
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Black men lost ground in the labor force last month, signaling persistent disparities that have permeated the U.S. labor market.
Black males who are at least 20 years old saw an unemployment rate of 5.3% in January, up from 4.6% in December, according to seasonally adjusted data released Friday by the U.S. Department of Labor. These workers had the highest unemployment rate when black, Latino, and white workers were broken down by gender.
By comparison, white men saw an unemployment rate of just 3.3% in January, which has remained steady since December. The overall unemployment rate has not changed since December at 3.7%.
Meanwhile, the Black community as a whole was the only racial group tracked to see an increase in unemployment since December. This highlights the impact of job losses among black men, especially given the fact that the rate for black women was unchanged between December and January at 4.8%.
Although the rise in unemployment among Black men is something to watch, it could be more indicative of an anomaly in the downward data in December, said Elise Gould, chief economist at the Economic Policy Institute. January's rate of 5.3% is essentially in line with the 2023 average, while December's rate of 4.6% was the lowest of the year.
She said the tight labor market witnessed by the COVID-19 pandemic has helped close the gap in work-related opportunities between black and white men. In fact, the difference in unemployment rates between black and white men narrowed to 2 percentage points in January from 4.1 percentage points in the same month in 2019.
Growth in the overall number of working Black men and the ratio of those with jobs to the total population compared to the beginning of 2023 also paints a picture of improvement, she added.
But Gould said persistent inequality in employment and wages highlights the need for greater social progress, while strengthening the argument that a strong labor market alone will not achieve equality.
The average white worker 16 or older earned nearly 20% higher average weekly wages than his Black counterparts, according to federal data as of the fourth quarter of 2023. That disparity has increased to nearly 25% When looking at male workers alone.
“A better economy could certainly help historically disadvantaged groups more because they are the ones who are often left behind and are slow to recover in weaker times,” Gould said. “Full employment is certainly kind of a requirement for many historically marginalized groups to be able to see a positive impact in the labor market, but it's not the only thing.”
She pointed to unions as one example of the positive power of black workers, noting that pay transparency among members could help close any racial pay gaps.
“Canary in the coal mine”
When combining genders, unemployment rates among white and Asian workers fell in January to levels last seen in late fall. The Hispanic unemployment rate has held steady since December at 5%, while the percentage of unemployed black workers rose to 5.3% from 5.2%.
Gould warned that monthly changes like what was seen in the unemployment rate among black men can be volatile. For this reason, she said it's important to evaluate long-term trends before drawing conclusions.
However, Gould said following employment patterns among Black workers and other marginalized groups can be important for spotting key economic trends. That's true even when broader employment data like what was released Friday point to a “hot” labor market, she added.
“It's a canary in a coal mine,” she said. “When you think about where you're going to see signs of recession, you don't see it in the data today, but it's always something to watch.”
— CNBC's Gabriel Curtis contributed reporting.
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