Nationwide—In July, the unemployment rate was 3.5%, a slight decline from the previous month. This morning’s monthly jobs report from the Bureau of Labor Statistics also shows that 528,000 jobs were gained while 5.7 million workers were unemployed. Even as the unemployment rate for white workers fell to 3.1%, the unemployment rate for Black workers rose to 6.0%—nearly double white workers’ rate. These disparities are a result of structural racism embedded in the U.S. labor market.
“It’s encouraging to see continued robust job growth,” said Rebecca Dixon, executive director of the National Employment Law Project. “Yet persistent racial disparities show how unequal our nation’s recovery still is. And as the Federal Reserve continues to push up interest rates, we know that more workers are going lose their jobs. It’s up to policymakers to ensure that unemployed workers get the support they need to afford the rapidly rising cost of living while they look for new jobs. The current unemployment insurance system is failing workers. Congress must overhaul it before the next recession hits.”
As the Federal Reserve continues to push up interest rates, we know that more workers are going lose their jobs. It’s up to policymakers to ensure that unemployed workers get the support they need to afford the rapidly rising cost of living while they look for new jobs.
The unemployment rate among Latinx workers fell from 4.3% to 3.9%, driven by job gains for Latina women. Black and white women also saw job gains and began to return to the labor market in greater numbers. The unemployment rate for Asian workers was 2.6%, a decline from 3.0% in June. Unemployment increased among Black and Latinx men.
If recent trends continue, fewer than one in three of the 5.7 million workers who are currently unemployed are likely to receive unemployment benefits in a given week. Most jobless workers never get benefits because of state laws that restrict eligibility, create barriers to access, and discourage workers from applying.
Unemployed Black workers are 24% less likely to receive UI than unemployed white workers, largely because policymakers in the Southern states where most Black workers live have adopted the most restrictive and exclusionary UI rules. New research finds that when Black workers do successfully claim unemployment benefits, their benefits replace a substantially smaller share of their prior wages than for white workers. Again, restrictive state rules in the South are a major reason for the disparity. These findings highlight why setting federal standards for UI eligibility, benefit amounts, duration, and access that all states must meet is a racial equity imperative.
Before the next recession, Congress must implement permanent, structural reform of the unemployment insurance system. Senator Ron Wyden’s Unemployment Insurance Improvement Act would begin to address some significant ways the unemployment insurance system disproportionately excludes Black and Latinx workers, women workers, and workers with disabilities. It does so by providing at least 26 weeks of unemployment benefits, increasing coverage for part-time workers, and expanding eligibility by requiring states to consider workers’ most recent earnings and standardizing earning requirements. These reforms lay the groundwork for transforming our unemployment insurance system and enabling all workers to thrive.
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