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October 11, 2012

Unemployment

Jobless Rates Fall for Black Men and Women

by Frederick H. Lowe
The seasonally adjusted unemployment rate for black men and black women dropped significantly in September, compared with August, but joblessness among African Americans remains higher than for all other major working groups.

The U.S. Bureau of Labor Statistics reported on Friday that the unemployment rate for black men and black women was 13.4 percent, down from 14.1 percent in August. This compares with a 7.0 percent unemployment rate for whites and a 9.9 percent jobless rate for Hispanics.

The seasonally adjusted unemployment rate for black men 20 years old and older was 14.2 percent in September, compared with 14.3 percent in August (Read additional story in this issue about black-male unemployment in 10 major metropolitan areas).

For black women 20 years old and over, there was better news. The seasonally adjusted unemployment rate dropped to 10.9 percent in September, compared with 12.0 percent in August.

Overall, the nation’s unemployment rate fell to 7.8  percent in September from 8.1 percent in August. The nonfarm payroll expanded by 114,000 jobs last month.

The drop in the unemployment rate caused a storm of controversy. Jack Welch, former chairman and CEO of General Electric Corp., charged in tweets that the numbers smelled fishy. Welch implied the Bureau of Labor Statistics manipulated the numbers to help President Obama win re-election.

Lawrence Mishel, president of the Economic Policy Institute, a Washington, D.C.-based nonpartisan think tank, challenged Welch in an article entitled, “The Outrageous Attack on BLS.”  

A more accurate measure of joblessness in the black community is the employment-population ratio. “It is simply outrageous to make such a claim and it echoes the worrying general distrust of facts that seems to have swept segments of our nation,” Mishel wrote. “The BLS employment report draws on two surveys, one (the establishment survey) of 141,000 businesses and government agencies and the other (the household survey) of 60,000 households. The household survey is done by Census Bureau on behalf of BLS. BLS is a highly professional agency with dozens of people involved in the tabulation and analysis of these data. The idea that the data are manipulated is just completely implausible.”

Dr. Steven Pitts of the University of California at Berkeley, said economists caution observers not to place too much stock in monthly variations of any measure coming from  the employment survey because the  sample size (especially for blacks) is small enough to produce volatility.

“The unemployment rate is a popular but flawed measure of how well workers are doing in the labor market,” said Pitts, who compiles data under the title, "Work in the Black Community,” for the University of California at Berkeley Labor Center.

He said a better measure of labor market performance is the employment-population ratio.

“This ratio indicates the proportion of the population that holds a job,” he said.

The employment-population ratio for black men 20 years old and older was 57.5 percent in September, compared with 57.7 percent in August. For black women 20 years old and older, the employment-population ratio was 55.3 percent in September, compared with 55.1 percent in August.

“Allowing for monthly fluctuations, the employment-population ratio for black men and black women actually decreased for approximately 10 months,” Pitts wrote. “However, since then, there has been a slow (but erratic) increase in the ratio.”

In 2007, the employment-population ratio for black men 20 and over was 64.7 percent. For black women, it was 59.1 percent, according to the UC Berkeley report.

2012 Employment population ratio for black men and black women 20 years old and older - Chart Data

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