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Jobs Outlook Still Murky

POSTED: June 04, 2010, 12:00 am

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For the Obama administration, any good news right now is welcome. Faced with an environmental disaster of epic proportion in the Gulf Coast and increased tensions in the Middle East, the White House will take any positive development and wave it as a symbol of the administration’s progress. Such might be the case with today’s Bureau of Labor Statistics Employment Situation Summary for May, the monthly indicator of employment conditions in the nation’s labor market. Yesterday, Automated Data Processing or “ADP,” the automated payroll firm, released its monthly employment report and predicted a gain of 55,000 new jobs in May. The BLS numbers were not as robust and only showed an increase of 41,000 jobs last month. The net gain is not the type of economic turnaround the Obama administration would like to see but at this stage of the game, the White House is sure to latch onto the figures as forward progress.

The nation’s unemployment rate was down to 9.7 percent, a level last seen in the first three months of the year and 15 million Americans were unemployed in May. However, as is always the case, different groups are faring differently with race still a dominant determining factor in how individuals are treated in the economy. The unemployment rate for whites was 8.8 percent, and while Black unemployment decreased slightly, it still stood at 15.5 percent. The unemployment rate for Hispanics was 12.4 percent. There is also variation within each group by gender and age. White women had the lowest unemployment rate at 7.4 percent compared to Black women at 12.4 percent. Black men continue to fare the worse among adults with an unemployment rate of 17.1 percent. The unemployment rate for white men was 8.8 percent. The numbers for Black teenagers, age 16 to 19, was also off the charts, at 38 percent. With cash strapped cities cutting back on summer jobs programs, prospects look bleak for youth seeking work and the idleness of young people could lead to disorder in some communities over the next three months.

“President Obama has repeatedly insisted that improvements in employment in general will ultimately help Blacks who are out of work.”

What makes these numbers even more pronounced is the seeming refusal of the President to address racial disparities in the labor market. President Obama has repeatedly insisted that improvements in employment in general will ultimately help Blacks who are out of work. His position has infuriated some Black members of Congress, as well as advocates, but public criticism of Mr. Obama has been somewhat muted because many Black leaders acknowledge in private their fear of giving the President’s enemies ammunition. Still, the gap in employment is such that an unavoidable conflict may be on the horizon as many Blacks in communities across the country sense there is little being done to assist their employment searches. The crisis is more pronounced than the official statistics reveal because a large proportion of Blacks, mainly males, are jobless and completely removed from the labor market. The extent of Black joblessness does not show up in the monthly BLS statistics because these individuals are not seeking employment, mainly because they believe there are no jobs available and their searches over time have been fruitless. If they are not reporting to an unemployment office, they are not counted among the nation’s unemployed.

Many Blacks are among the 2.2 million “marginally attached,” persons in the economy. These individuals were not in the labor force in May though they wanted and were available to work and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the four weeks preceding the Bureau of Labor Statistics survey. The marginally attached include 1.1 million discouraged workers who are not looking for work because they believe there are no jobs available for them.

There were specific sectors of the economy that showed some improvement over the course of last month. Manufacturing gained 29,000 jobs over the month, and factory employment increased by 126,000 jobs over the past five months. Temporary help services added 31,000 jobs in May. The increase in temporary jobs is a positive sign as many companies first use temporary labor before adding permanent positions. Employment in health care changed little in May, adding about 8,000 jobs, but the sector has been bringing about 20,000 jobs into the economy on a monthly basis over the last 12 months. The health care sector has been the most consistent of all industries since the start of the recession. There was a reversal of fortune in the construction industry as it lost 35,000 jobs in May, and wiped out the gains it had made over the last two months. Government employment increased by 390,000, a good bulk of the hiring was temporary employees who are assigned to the Census effort. Notably, employment in state government decreased with the exception of education.

The White House had indicated that jobs were the priority issue on the President’s agenda but the latest development in the Gulf Coast has been an obvious distraction. The May Bureau of Labor Statistics report may force the administration to put jobs front and center, as Democrats in congressional midterm elections will likely feel the wrath of voters affected by the economy. The latest numbers may also renew calls by Black leadership for the White House to put forth a strategy that specifically addresses Black unemployment.

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