A warning ahead for Black workers despite overall drop in unemployment

African Americans might not reap the benefits from the good news about the economy

(Photo: Getty Images)

The coronavirus pandemic had a chilling impact on the American economy as entire industries were shuttered to stop the spread of infection and the Black community is bearing the brunt.

READ MORE: Latinx, Blacks and women hit hardest by unemployment caused by COVID-19

It had an even more devastating financial impact on African Americans who are disproportionally represented in the service and gig industries and as essential workers who can’t work from home.

People wait in line for a job fair at a United Parcel Service (UPS) facility on November 01, 2019 in New York City. (Photo by Spencer Platt/Getty Images)

According to CNBC, although Black unemployment in April only increased less than a percentage point, the road ahead may be challenging. The CARES Act, which added $600 in federal money to state unemployment checks, calls for an end to those additional funds as of July 31.

It also extended benefits for the first time to independent/contract workers but those benefits will run out at the end of the year, without any additional measures from Congress.

In May, 2.5 million jobs were gained, which made financial markets happy as they were initially preparing for the loss of 8.3 million jobs. CNBC says that this is largely due to the state’s reopening plans and with it, rebounds in the travel and real estate sectors, among others.

“This jobs report is great news. It suggests people are getting their jobs back, but you still have a long way to go. You have tens of millions of Americans that are still unemployed,” Ed Keon, chief investment strategist at QMA told CNBC.

A broader picture of the unemployment rate includes the U-6 rate which incorporates the underemployed, including those in the gig economy (working for delivery services, ride-sharing or other independent jobs without benefits), those who have stopped looking for work and those who are unemployed in the traditional sense.

That rate, says Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities could more correctly be more than 30% for African Americans, he told CNBC.

(Graph via CNBC)

 

READ MORE: 5 ways to protect your finances during the coronavirus recession

“If you factor in all the things that you can explain using conventional economic tools — education, age, gender, experience — you will explain only a relatively small part of that difference,” said Bernstein, who worked with the Obama White House and is advising Joe Biden in his presidential campaign.  “So you have to ask yourself what are you left with, and the answer is discrimination.”

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