Posted on July 14, 2011

African-Americans Disproportionally Hurt by Public-Sector Crisis

Akito Yoshikane, In These Times, July 13, 2011

The dismal jobs report released last Friday raised further doubts about a steady economic rebound more than two years after the official end of the Great Recession.


African Americans make up 12 percent of the population, but account for 20 percent of the unemployed. And last year, black Americans had the longest unemployment span among all major racial groups, with a median of 26 weeks. The prolonged period of joblessness is raising concerns about a shrinking black middle class, and recent studies have shown that the current spate of budget cuts is hastening the situation.


The high unemployment rate is partly attributed to the large reduction of public sector jobs, which is the largest employer of black workers. One out of every five working African Americans are employed by the government, according to the labor department. That comes out to 19.8 percent of the black workforce, compared to 14.6 percent for whites and 11 percent for Hispanics.

As governments continue to trim budgets, the mass layoffs of public employees have disproportionately impacted the African-American community. Since January 2009, more than 429,000 workers employed by state and local governments have lost their jobs, according to labor researchers at the University of California at Berkeley.


Moreover, state and local government employment is already at its lowest levels since 2006. But more and more public-sector jobs are disappearing. Overall, there are 1.9 percent fewer government jobs than when the recovery began, according to the Economic Policy Institute. In June, state and local governments shed 25,000 jobs. And it may get worse. Some analysts are predicting that as many as 800,000 to one million public sector jobs will be cut for the next fiscal year.

Such a large reduction in the public workforce will have long-term implications for the black middle class. Wealth disparities between blacks and whites were already staggering before the Great Recession, but the gap has widened even in the aftermath. {snip}


{snip} The University of California at Berkeley report, published in April, wrote that the public sector is “the single most important source of employment for African Americans.”

Based on data from 2005-2007, researchers found that a greater concentration of black men and women were employed in higher-paying jobs in the public sector compared to their counterparts in the private sector. In other words, there was a smaller concentration of African Americans in lower-wage jobs. Black women in public administration even had the highest proportion of women in the top-tier income scale than other sectors. African Americans also earned better median wages than other industries; and the wage gap for black and white workers was much smaller.


Now, with so many people of color depending on the public sector, further reduction of government jobs might compromise decades of economic progress if new jobs aren’t created soon.