Today’s monthly jobs report shows slowed job growth in an economy that is improving unevenly. The overall unemployment rate obscures that Black and Latinx workers are being left behind and critical investments are needed now to achieve a just recovery that addresses the needs of those most impacted and works for all of us.
Overall, the economy added 235,000 jobs in August and the unemployment rate fell by 0.2 percentage point to 5.2 percent. The number of unemployed people declined to 8.4 million, which is substantially higher than the pre-pandemic 3.5% unemployment rate and 5.7 million unemployed people.
The unemployment rate declined to 4.5 percent for white workers and 4.6 percent for Asian workers, but it remained discriminately high for Black workers at 8.8 percent, and Latinx workers at 6.4 percent. The unemployment rate for Black men increased from 8.4 percent in July to 9.1 percent compared to improved 4.4 percent for white men. Due to long-standing inequities in our labor market, these unemployment disparities are not new, but were exacerbated in this pandemic.
Hard hit industries with higher amounts of Black and Latinx workers, like retail trade, food services and drinking places, have not fully returned. Retail trade declined by 29,000 in August and is down by 285,000 jobs pre-pandemic and food services and drinking places declined in August by 42,000 and employment in leisure and hospitality is 1.7 million, or 10% lower, than pre-pandemic. This compared to higher wage occupations with less Black and Latinx workers like financial, professional, and business services that have had more recovery.
While gains were made in the last month, they are especially fragile given the surge in the Delta variant which impacts workers’ safety and health, childcare considerations, and is already causing consumers to pull back from spending in restaurants and travel. In August, the number of people who reported that they had been unable to work because their employer closed or lost business due to the pandemic increased by 497,000 to 5.6 million. 1.5 million people were prevented from looking for work due to the pandemic, little changed from July. Couple that with the unemployment benefit cliff coming on Labor Day when over 9 million workers receiving unemployment insurance (UI) will see their benefits abruptly end pulling millions in spending out of the economy at a key juncture.
“Some workers have recovered, but recovery is happening at a different rate across communities. Current policy responses are calibrated to those who have recovered, ignoring the medical and economic complexities that parents and underpaid workers are facing. We urgently need Congress to enact immediate bold, structural unemployment reform to counter this emerging uneven recovery that continues to leave workers of color behind. We cannot “build back better” if the building locks workers of color out. Now is the opportunity to build a system centered around historically excluded workers that will accelerate an equitable recovery,” said Rebecca Dixon, executive director of the National Employment Law Project.
We cannot settle for anything less than a just recovery. Congress must immediately enact bold, structural UI reform including expanded coverage, increased minimum benefit duration, and increased benefit amounts that are in line with basic living expenses. Long-standing racial inequities in the labor market and unemployment insurance system require structural reforms that will move us beyond temporary fixes and toward enduring transformation so that everyone can thrive in and out of a crisis.
