Black Labor Participation: Still Weak

Pay no attention to that record low unemployment …

We’re not doing a Martin Luther King, Jr. “dream status check” this year for #MLKDay … at least not related to black Americans’ economic situation.

We’ve already plowed that ground …

There is one indicator we would like to address, though, particularly as it relates to recent pronouncements from U.S. president Donald Trump.

Earlier this month, employment data for December 2017 revealed that the nation’s black unemployment rate had fallen to 6.8 percent.  For those of you keeping score at home, that’s the lowest it’s been since the U.S. Bureau of Labor Statistics (BLS) began tracking the metric.  In fact, over the past forty-five years the black unemployment rate had never fallen below seven percent.

Good news, right?

Yes and no … but mostly “no.”

As much as Trump wants to use this data point to affirm the success of his #MAGAnomics, the real indicator to watch if you want to know the health of the black labor market is labor participation.  As we’ve stated repeatedly, the unemployment rate provides a glimpse at a group of workers within the labor force – the labor participation rate tracks the size of the workforce itself.

So … what does black labor participation look like?

According to BLS data, 62.1 percent of working age black Americans were part of the labor force last month.  That’s well below the national rate of 62.7 percent (but above South Carolina’s labor participation rate of 58.7 percent).

In January, former president Barack Obama’s final month in office, black labor participation stood at 62.3 percent – meaning the black workforce as a percentage of working age population has actually shrunk by 0.2 percent since Trump took office.

Obama has nothing to brag about, though.  During his eight years in office black labor participation declined by 0.9 percent – one of many unfortunate economic outcomes for a race that monolithically supported him and his policies.

To be clear: We believe the tax bill signed into law by Trump last month will have some positive impact on labor participation – for all races.  Obviously, we argued repeatedly that the legislation should have provided more tax relief – and that this relief should have been targeted more toward middle income earners and small businesses.

Still, it’s hard to envision a scenario in which these tax cuts won’t provide some sort of boost to the nation’s economy … although probably not quite the boost Trump is hoping for.

We shall see …

In the meantime, Trump and his detractors need to initiate a more honest conversation about the underlying health of America’s labor market.  Perhaps if they did so, the argument for additional tax cuts would become clearer.



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