Last in Line: Recessions historically have lingered longer for African Americans and Latinos than for other groups
Among the millions who have lost their jobs since the recession began, workers of color — African Americans and Latinos in particular — have been disproportionately harmed by the economic downturn. And if history is any indication, the light at the end of their recession tunnel will remain dim for several years.
The unemployment rate among Latinos rose from 6.4 percent in the second quarter of last year to 7.4 percent in the second quarter of this year, according to the U.S. Bureau of Labor Statistics. African Americans fared worse, with unemployment rising from 8.2 to 10.7 percent in the same period.
Meanwhile, the unemployment rate for whites rose from 3.9 to 5.2 percent. The national unemployment rate, which measures the percentage of people in the labor force actively seeking work, stands at 5.9 percent.
When the last recession ended in spring 1991, it took Latinos about five years to return to prerecession levels, as measured by the unemployment rate and median family income, according to a report from the Pew Hispanic Center in Washington. African Americans, who started out with a higher unemployment rate during that period, rebounded at the beginning of 1995, around the same time as whites.
Latinos may not begin to recover from the latest recession until the end of 2004. Despite the gains of the 1990s, Latinos will have a hard time weathering the downturn because many have minimal household savings and other financial assets, the report said.
African Americans and whites may once again recover from this recession sooner, although African Americans may find that their unemployment situation gets worse before it gets better, economists say.
Like many of the Bay Area’s unemployed, Climiell Thomas decided to learn a new skill after she was laid off. She enrolled in the Cypress Technology Training Center in Oakland, hoping that a Cisco networking certificate will help her find a better-paying job the next time around.
As an African American, however, Thomas may not see the fruits of her training until long after the economy makes a full recovery.
Even so, she’s determined to finish her education, even if it means living with less.
“There have been some definite hardships,” said Thomas, 30, who worked at a recruitment advertising agency. “But we’re surviving. You just have to sacrifice to make sure you have shelter, lights and some transportation.”
JOB MARKET EXPECTED TO WEAKEN
With slow economic growth forecast, the unemployment rate for workers of color is expected to climb, according to the Economic Policy Institute. By November, the institute predicts unemployment could reach 6 percent, and hover between 6 and 6.5 percent throughout 2003. At the current pace, unemployment for African Americans could rise to at least 11.3 percent, and the rate for Latinos to 9 percent.
The Bureau of Labor Statistics does not track labor force data for Asian Americans because the percentage of the population is not big enough to provide a reliable sample.
In California, where there’s a sizable Asian American population, the group appears to be similar to whites in terms of earnings and unemployment rates, although certain Asian American subgroups fare better than others, said Deborah Reed of the Public Policy Institute of California. Southeast Asians, for example, have the highest poverty rate, the lowest labor force participation rate, and one of the highest unemployment levels.
Although companies are likely to produce more goods, it won’t necessarily result in more hiring, at least not right away, economists say. That means workers like Thomas, an Oakland woman new to the tech industry, could be looking a lot longer for a job. In fact, it could take several years before minority workers stand on solid economic ground again, said Roberto Suro, director of the Pew Hispanic Center.
‘It’s basically already two years since the unemployment rate started going up for blacks and Hispanics,” Suro said. “For them, it really started in the summer of 2000.”
Moreover, the education and skill levels of many workers of color lag behind those of whites, which translates into lower earnings. The median weekly earnings for whites in the fourth quarter of 2001 was $621, compared with $486 for blacks and $419 for Latinos, according to the Bureau of Labor Statistics.
“If job growth remains very slow and continues at this sort of pace, at some point the economic gains of the late 1990s will be erased,” Suro said.
Workers of color are more likely to feel the pain of a recession because they often lack an adequate safety net when they lose their jobs and tend to work in industries — service, manufacturing and transportation — that are more prone to layoffs, according to a recent report by the Applied Research Center in Oakland.
Last year, 25 percent of white workers were concentrated in occupations that exceeded 6 percent unemployment. Thirty-nine percent of African Americans and 41 percent of Latinos worked in the most vulnerable occupations, the report said.
However, education, job skills and industry affiliation alone do not tell the whole story, experts say.
“Historical experience indicates that workers of color are generally the last hired in an economic boom and the first laid off in a downturn,” said Manuel Pastor Jr., professor of Latin American Studies at UC Santa Cruz and a Joint Venture Silicon Valley board member. “This has been going on for as long as we have been keeping the statistics.”
HIRING NOT KEEPING PACE
Through the years, the job skills and education gap has narrowed dramatically for African Americans, yet the unemployment rate continues to be disproportionately high in and out of recessions, said William Spriggs, director of research and public policy for the National Urban League.
“Because of discrimination, black workers are stuck in the pool longer,” he said. “We have to figure out how to enforce nondiscrimination at the point of hiring.”
The Public Policy Institute of California has not examined discrimination in hiring, but a 30-year institute study on race and ethnicity found that the state’s Latinos and African Americans have particularly high unemployment rates, even in boom times. The rates are more severe during downturns.
In 1997, white and Asian American men had about a 4 percent unemployment rate, compared with around 7 percent for Latino men and 10 percent for African American men. Latinas and African American women had unemployment rates that were twice those of white and Asian American women, according to the institute.
California’s white workers also have higher earnings. The median earnings of white men is higher than for Hispanic, Asian American and African American men, even when the study compared U.S.-born workers with similar education levels.
“Why do Hispanics earn less? We found education and occupation to be a big part of it,” said the institute’s Reed. “Why do African Americans earn less? Education is a part of it, but there’s certainly more going on that we can’t identify from the data.”
John Challenger, chief executive officer of the outplacement firm Challenger, Gray & Christmas in Chicago, sees a more positive trend emerging. While finding a job will be tougher for low-skilled workers, Challenger said skilled African American and Latino workers may be better off when the economy picks up.
When unemployment sank to new lows, companies brought in more people of color and found they were rewarded for doing so, Challenger said.
“I do think the environment is changing,” Challenger said. “More companies in the boom years of the 1990s put aside discriminatory hiring patterns because they were forced to go out and find people. They had no choice. They realized that in fact discrimination was hurting them competitively.”
E-mail Julie N. Lynem at email@example.com.