By Eric Morath 

From advanced-degree holders to high-school dropouts, Black workers have substantially higher unemployment rates at every level of educational attainment than white workers -- and the disparity has widened this year during the economic downturn caused by the coronavirus pandemic and related shutdowns.

The expanding gap signals Black Americans can expect to have a longer and slower recovery from the 2020 economic recession, regardless of whether they have attended college or not completed high school.

Black workers with just a bachelor's degree had a 6.1% average unemployment rate in the 12 months ended in October, according to the Labor Department. That was higher than the 4.8% unemployment rate for white workers with just a bachelor's degree, and exactly matched the jobless rate for white people with associate degrees.

The disparity widens for those with less education. Black workers with only a high-school diploma had a 12.1% average unemployment rate over the past year, above the 7.4% rate for similar white workers, and above the 10.1% rate for white high-school dropouts.

Black workers also have a higher unemployment rate at each level of educational attainment than Latino workers, but the disparity is less pronounced.

"Frequently, Black workers need to send additional signals about their qualifications to get the same job," said Bradley Hardy, an economist at American University in Washington. "That's why you'll see a Black person with a master's degree in a job that only requires a bachelor's."

Such gaps have broad implications for the U.S. economy's path ahead, indicating it isn't fully using its resources, which limits its current and future growth, economists say.

"Elevated unemployment, and high levels of unemployment across demographic groups including Black Americans, signals an economy operating below full potential," Mr. Hardy said.

The jobless disparity between Blacks and whites increased this year.

In October, the 12-month average unemployment rate for whites with a bachelor's degree or higher was 1.2 percentage points lower than that for Black grads, among those 25 years or older, according to Labor Department data. For those with just high-school diplomas, the gap was 4.7 percentage points.

Both gaps have widened since the middle of last year. In June 2019, the 12-month average unemployment rate for whites with at least a bachelor's was 0.7 percentage point lower than that for similar Black grads, matching the narrowest gap since 2002. That, in part, reflects that Black workers disproportionately held jobs that were lost this year, including in the transportation, hospitality and retail sectors.

There are several factors, economists say, that explain the long-term discrepancy between Black and white unemployment.

Black Americans more frequently attend lower-quality elementary and high schools in racially segregated neighborhoods, which may leave them less prepared to succeed in college or at their first jobs, said Harry Holzer, an economist at Georgetown University.

Black workers with disproportionately lower skills and higher unemployment levels won't be as productive as possible, Mr. Holzer said, limiting how much the economy can expand.

Black workers also can lack access to better, more stable jobs because they may not have the network of contacts to know about them, or they may face challenges like lack of access to transportation or child care, he said.

Problems associated with frequent and extended periods of unemployment can compound. "Employers become more skeptical that people are employable," Mr. Holzer said. "People become depressed, may develop health or substance-abuse problems...and they can engage in more illegal activity."

Michelle Holder, an economist at John Jay College of Criminal Justice in New York, said Black men, in particular, are overrepresented in nonmanagerial jobs in industries susceptible to swings in the economy, such as construction and manufacturing. That means they are more likely to be laid off throughout their careers.

Another factor is apparent discrimination, said both Ms. Holder and Mr. Holzer. "There are negative penalties in the labor market associated with gender and race that can't be explained by anything else," said Ms. Holder, who researches economic disparities between racial and gender groups.

That discrimination can take the form of direct bias against an individual and structural factors such as access to quality education, health care and generational wealth, she said.

Black employees with full-time jobs also earn substantially less than similarly educated white workers. Last year, median weekly earnings for a white worker with at least a bachelor's degree was $1,380, according to Labor Department data. Pay for similar Black grads was 20% lower, or $1,110 a week. Black workers with only high-school diplomas earned $635 a week last year, below the $778 earned by white peers, and nearly in line with the $604 a week earned by white high-school dropouts with full-time jobs.

Lower earnings and weaker employment prospects for Black workers have costs for society overall, Ms. Holder said. It means fewer dollars are earned, spent and taxed in Black communities. Higher rates of unemployment and poverty are associated with less stable families, higher rates of incarceration and worse health outcomes. The people living in those communities often require additional public assistance, such as food stamps and Medicaid.

"One way or another, America will bear the burden of this," she said. "Higher incarceration, higher Covid-19 deaths of Black people, more tax dollars spent. The bill will come due."

Write to Eric Morath at eric.morath@wsj.com

(END) Dow Jones Newswires

November 29, 2020 05:44 ET (10:44 GMT)

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