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Black Unemployment Hits 13.4%

POSTED: March 06, 2009, 10:45 am

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The Bureau of Labor Statistics released its monthly Employment Situation Summary report for February and the news is grim. Last month the nation’s economy shed 651,000 jobs and en route, the unemployment rate ballooned to 8.1 percent, from 7.6 percent in January. Black unemployment leaped to 13.4% and Black teenage employment increased to 38.8 percent. Over the last 4 months nonfarm employment has decreased by 2.6 million jobs. By every conceivable measure, the figures point to a protracted recession that is now taking its toll upon the Black community.

While all groups are faring poorly during this recession, Blacks and Latinos are faring worse. Last month, white unemployment was 7.3 percent, under the national rate of 8.1 percent, while Blacks (13.4 percent) and Latinos (10.4 percent) are impacted by this recession to a greater degree than whites are. The unemployment rate for Black men in March was 14.9 percent, compared to white men at 7.4 percent. Black women, though not to the degree as men, also saw their unemployment rate increase to 9.9 percent, compared to white women at 6.1 percent.

The “official” numbers only tell part of the story. Last month, about 2.1 million Americans were “marginally attached” to the labor market. These individuals wanted and were available to work, and had looked for a job in the prior 12-month period. They were not counted as unemployed because they had looked for work in the four weeks preceding the survey. Among this group were 731,000 “discouraged workers,” persons not looking for work because they do not believe there are jobs available. The remaining 1.3 million marginally attached had not searched for work in the four weeks preceding the BLS survey because of reasons such as family or school responsibilities. There is yet still millions of American who are out of work but not recognized in the official count. These are people who have simply given up looking for work and they are not captured by the formal unemployment system.

The economy is bleeding in just about every sector. Employment in professional and business services fell by 180,000 jobs. This includes a loss of 78,000 jobs in the temporary help industry, a 17,000 jobs decline in services to buildings and dwellings, and a drop of 12,000 jobs in business support services.

Employment in truck transportation fell by 33,000 jobs in February. The industry has lost 138,000 jobs since the start of the recession. Nearly two-thirds of the decline has occurred over the last 4 months.

Manufacturing also continued to shed jobs, down 168,000 in February. The same held true in the construction industry. Jobs in construction fell by 104,000 last month. Employment in the sector has fallen by 1.1 million since it peaked in January 2007. The trauma in the sector during this recession is amplified by the fact that two-fifths of the decline has occurred over the last 4 months. Both residential and nonresidential construction employment fell in February.

Employment in the retail trade sector declined by 40,000 jobs last month and has lost 608,000 jobs since December 2007. The sector is still reeling from a dismal holiday shopping season. Employment in automobile dealerships declined by 9,000 jobs last month; this is hardly a surprise given the dismal state of the nation’s automobile industry. Losses were also felt in sporting goods (9,000), furniture and home furnishing stores (8,000), and building material and garden supply stores (7,000). The retail sector is a good barometer of consumer confidence as declines in sales reveal high anxiety among consumers and a reluctance to spend dollars due to economic insecurities.

The number of jobs in the financial services sector has dropped by 448,000 since it peaked in December 2006. Half of the losses have occurred in the past 6 months. In February, the sector lost 44,000 jobs. February job losses in the sector included real estate (11,000), credit intermediation (11,000), and securities, commodity contracts and investments (8,000).

The one sector of the economy that continues to grow is health care. Last month the sector added 27,000 jobs, with gains in ambulatory health care (16,000) and in hospitals (7,000). It is an important development because health care is one of the priorities of the Obama administration, evidenced by the President’s health care summit yesterday.

The employment figures for March pose a big challenge to President Obama. The recently passed economic stimulus package has a goal of creating 3.5 million jobs. However, at the rate the economy is shedding jobs that goal may only be a replacement factor, at that. Then, there is still the challenge of how to incorporate Black men and young adults in the labor market. The unemployment numbers of those two groups can lead to destabilizing households and whole neighborhoods. The arrival of Adolfo Carrion, the former Bronx (N.Y.) Borough President, as the urban policy czar is timely given the tremendous need for communities of color to have a voice at the policy table. Carrion, Secretary of Labor Hilda Solis and Secretary of Housing and Urban Development Shaun Donovan are now pivotal in addressing the joblessness crisis in the Black community.

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