20 January 2012
Page 1 of 2
Millions of African Americans live in communities that lack access to good jobs and good schools and suffer from high crime rates. African American adults are about twice as likely to be unemployed as whites, black students lag their white peers in educational attainment and achievement, and African American communities tend to have higher than average crime rates. These issues have been persistent problems.
Jobs are essential to improving African American communities. Increased employment would help people in these communities lift themselves out of poverty. In addition, because poor economic conditions are an important causal factor behind poor educational outcomes and high crime rates are correlated with high unemployment rates, creating job opportunities would help improve educational outcomes and reduce crime.
This paper outlines a plan for significantly increasing the number of jobs available to African Americans. The plan, which targets communities with persistently high unemployment, includes three main components: creation of public sector jobs, job training with job-placement programs, and wage subsidies for employers. Although the plan is constructed with African Americans in mind, it would also provide benefits to Latino, American Indian, and white communities in which unemployment has remained high.1
A precondition for implementing this plan is a U.S. economy with strong job growth and low unemployment. Unemployment in African American communities cannot be low while the national unemployment rate is high. Thus macroeconomic initiatives—such as infrastructure investments, aid to states, and a stronger safety net—are needed to restore the national economy, reduce the national unemployment rate, and create the conditions for strong job growth in the future.
Even when the national economy is good, however, conditions for African Americans are typically bad. Federal intervention to aid African American community development is necessary for the following reasons:
- African Americans still reside mainly in separate and unequal communities. In 2010, in the 100 metropolitan areas with the largest African American populations, 62.5 percent of blacks would have had to move to achieve full black–white integration.
- Unemployment rates for African Americans have been far higher than those of whites for the past 50 years, even in good times. In fact, since 1960 the black unemployment rate has been about twice the white rate. Had blacks had the same unemployment rate as whites in 2010, an additional 1.3 million blacks would have been employed.
- Parental unemployment, and not simply low income, has negative effects on children’s educational outcomes. Blacks are twice as likely as whites to have had 10 or more spells of unemployment over their prime working years.
- Joblessness, although by no means the only factor producing higher crime rates in African American communities, appears to play a significant role.
- Neither educational advances nor suburbanization by blacks has translated into reductions in the black–white unemployment rate ratio.
- If a bold new approach is not developed to address the racial unemployment disparity, it is likely that African Americans will be condemned to unemployment rates that are twice those of whites into the foreseeable future.
This paper begins with brief discussions of residential segregation and the persistent job crisis facing African Americans. It then presents evidence that suggests why improving educational attainment and access to suburban labor markets are not likely to be enough to raise employment rates among African Americans. This discussion is followed by a proposal for reducing the high rate of joblessness in and rejuvenating African American communities.
Separate and unequal communities
African Americans still reside mainly in separate and unequal communities. In 2010, in the 100 metropolitan areas with the largest black populations, 62.5 percent of blacks would have had to move to achieve full black–white integration. In some of the largest metropolitan areas, the degree of segregation is significantly above the average. In the New York, Chicago, and Detroit metropolitan areas, for example, more than 75 percent of African Americans would have had to move to achieve residential integration.2
These spatially separate communities face very different economic circumstances. In 2007, before the recession began, African Americans in many of the largest metropolitan areas were already in economic distress, with unemployment rates of 10 percent or higher (Austin 2011). The 2007 unemployment rate for blacks in the Detroit metropolitan area was 14.9 percent—more than 2.5 times the 5.8 percent rate for whites. In the Chicago metropolitan area, the 2007 unemployment rate was 10.3 percent for blacks and 3.6 percent for whites.3
The segregation and economic inequality seen in large metropolitan areas also exist even within the smaller geographies of cities. In 2009, for example, Ward 3 in Washington, D.C., which was 78 percent white (Neighborhood Info DC 2011), had an unemployment rate of just 3.2 percent (Comey, Narducci, and Tatian 2010). In contrast, the unemployment rate in Ward 8, which was 94 percent African American, was 28.7 percent.
Because of the high degree of segregation of African Americans into economically distressed communities, community-based policies can be effective mechanisms for helping this population. In Washington, D.C., for example, the challenge is not how to provide economic development for the city as a whole but how to provide economic development for Ward 8 and similar wards.
The importance of jobs
The problem of joblessness is a deep and persistent one for African Americans. Since as early as 1960, the black unemployment rate has been twice the white rate (Fairlie and Sundstrom 1999).4As wide as this unemployment rate gap is, it actually underestimates the magnitude of the problem, because, faced with persistent challenges finding employment, many would-be job seekers give up hope of finding a job and drop out of the labor force. Once they do so, they are no longer counted as unemployed, even though they are jobless. For this reason, only employment-rate gaps reveal the full magnitude of the problem of joblessness for African Americans.
In 2010, for example, had blacks had the same unemployment rate as whites, an additional 1.3 million blacks would have been working. Had blacks had the same employment rate as whites, however, an additional 2.0 million blacks would have been working.5 The unemployment rate gap is large, but the employment rate gap is even larger.
Employment that reaches deep into African American communities is key to community development, for a variety of reasons. First, economic conditions are related to educational achievement. Low family income has significant negative effects on children’s educational achievement (Duncan and Magnuson 2005; Kalil 2010; Lee and Burkam 2002; Stevens and Schaller 2009; Taylor, Dearing, and McCartney 2004). Unemployment in and of itself has negative effects on children’s educational outcomes (Stevens and Schaller 2009; Kalil 2010). Blacks are twice as likely as whites to have had 10 or more spells of unemployment over their prime working years (Bureau of Labor Statistics n.d.). Each spell of parental unemployment reduces the likelihood of a child’s educational success. If it were possible to increase the black employment rate to the level of whites and sustain it, we would expect substantial increases in the performance of black students. Creating more jobs for African Americans would thus not only raise incomes, it would also improve educational outcomes.
Second, economic conditions seem to be related to crime rates. Although there is much that criminologists still do not understand about the dynamics of criminal offending, a growing body of research suggests that low wages, high unemployment, high poverty, and high economic inequality lead to higher crime rates (Kelly 2000; Ludwig, Duncan, and Hirschfield 2001; Gould, Weinberg, and Mustard 2002; Machin and Meghir 2004; Lin 2008). Strong job creation that targets African-American communities would improve economic conditions in these communities and likely reduce crime rates.
It is important to recognize that economic conditions are not the only factors driving crime rates. Demographic changes, criminal-organization practices, criminal-justice policies, and other factors all affect crime rates. The recent declines in crime likely stem from these other factors.
The insufficiency of education alone
Improving educational attainment is a worthy end in itself, but there is little reason to believe that it will reduce the economic problems facing African Americans. The more educated a person is, the more likely he or she will be employed and employed in a good job. However, the employment gap between African Americans and whites will not be bridged by increasing education, as the evidence presented below shows.
The African American population is much better educated today than it was in the 1960s by several measures (Austin 2006, 41–49), but the unemployment disparity between blacks and whites remains essentially unchanged. Educational advances have not translated into improvements in the employment situation for most African Americans (Bernstein 1995).
One reason for the ineffectiveness of education is that educational advances made by blacks have often been matched or exceeded by educational advances by whites. For education to improve blacks’ relative position, they need to make educational advances at a faster rate than whites.
Even if African Americans were able to catch up with whites educationally, unemployment disparities would not disappear, as African Americans are more likely to be unemployed than whites at every educational level. In 2007, for example, before any significant unemployment effects of the Great Recession had been felt, blacks 25 years old and older with a high school diploma were about twice as likely to be unemployed as their white peers. Blacks with a bachelor’s degree or higher were one and a half times as likely to be unemployed as their white counterparts. These disparities are so large that even if blacks had the same educational attainment profile as whites, most of the unemployment gap would remain.6
For African Americans to have had the same unemployment rate as whites in 2007, for example, they would have had to have been much, much better educated than whites. According to Current Population Survey data from the Bureau of Labor Statistics, the proportion of the labor force with a bachelor’s degree was 24 percent for blacks, 34 percent for whites, and 58 percent for Asian Americans. For the African American unemployment rate to have equaled that of whites, 85 percent of African Americans would have had to have been college educated. Even if there were a way for African Americans to quickly leapfrog whites and Asians in college attainment, over time white educational attainment would gradually catch up, recreating the African American unemployment disadvantage.
It is extremely valuable for African Americans to improve their educational outcomes, both individually and collectively. Education has economic as well as important noneconomic benefits. The social problem of the employment gap between blacks and whites will not be solved by educational advances alone, however.