The economic performance of African-Americans

Written by Warwick Lightfoot Saturday, 19 November 2011 22:08
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In most advanced societies the combination of mass migration and the legacy of colonialism has created significant ethnic minority communities.

These often exhibit low levels of economic welfare, weak attachment to the labour market and low levels of marginal revenue product. This reflects a combination of relatively low levels of human capital in terms of education, training and work experience. These labour market characteristics then adversely interact with the long-term incentive effects of welfare states and raise complex challenges for public policy.

Discrimination on the basis of race, culture and religion also provides a public policy imperative in many advanced OECD economies.

In the United States these issues are present, but exhibit themselves in a particular and distinctive manner.

Like other advanced economies the US has experienced significant recent economic migration, that has extended its range of ethnic minority communities, but it also has a separate and wholly distinctive legacy of ethnic minority discrimination. The legacy of slavery and segregation means that the United States has a set of economic, social and political challenges that are wholly unique compared to other advanced OECD economies. This section assesses african-american economic welfare as it has a distinctive American dimension to it.

Black Employment, Education and Income

The US Census Bureau ‘s report Income Poverty and Health Insurance Coverage  in the United States in 2009 found that median black household income in 2009 was 32,584 about 60 per cent of white and non-Hispanic median household income.

The US Department of Labor’s report Labor Force Characteristics by Race and Ethnicity, 2009 showed that median weekly and salary earnings in 2009 for african-american workers were $601 compared to $757 for whites and $880 for Asians. African-american earnings were roughly 80 per cent of white earnings. African-american men earned $621, compared to white men who earned $845.

In 1967 african-american per capita money income was 53 per cent of white per capita income. In 2009 it was 65.7 per cent of white per capita income.

There is a consistent pattern of disadvantage in the labour market and in terms of wider life chances and mobility. Attachment to the labour market is generally weaker.

Labour force participation by blacks in 2009 was 62.4 per cent compared to 65.8 for whites. The employment ratio was 53.2 per cent compared to 60.2 per cent for whites. The unemployment rate was 14.8 per cent compared to 8.5 per cent for whites. Teenagers are particularly vulnerable to unemployment as new entrants to the labour market with less skills and work experience.

Among 16 to 19 year olds, african-american teenagers had the highest unemployment rate 39.5 per cent compared to 21.8 per cent for whites. Unemployed african-american's tend to be without work longer than other groups. In 2009 the median duration of unemployment was 19.7 weeks compared to 14.2 weeks for whites. 

African-american men are more likely to be out of the labour force. The proportion of african-american men who did not participate in the labour force among 25 to 54 year olds was greater than that of white, Asian and Hispanic men. African-americans made up 11 per cent of the civilian population in 2009 but accounted for 23 per cent of the people marginally attached to the labour force that is people who wanted work and had looked for a job during the previous 12 months, but not in the previous four weeks. African-americans accounted for 25 per cent of all discouraged workers, the subset of marginally attached people, who are not currently looking for work because they believe no jobs are available...

Warwick Lighfoot is the author of the forthcoming America's Exceptional Economic Problem (Searching Finance 2013).

Last modified on Tuesday, 22 January 2013 22:10

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