Published On: Mon, Jan 27th, 2014

Black Unemployment Decreased…Or Did It?

According to data released by the Bureau of Labor Statistics, the unemployment rate for African Americans fell from a shocking 16.9% in 2010 to 11.9% as of December 2013.  The 5% decrease in the unemployment rate among blacks has been largely credited to increases in private employment.

 

private-sector-employment

Hidden within the numbers is the fact that the figures do not include individuals who have stopped looking for work due to frustrations from being unemployed for a long time.   The total number of unemployed African Americans is much higher than the figure reported and the fall in Black unemployment might actually be due to those who has stopped looking for work – those who have been classified as having left the labor force.

The labor force participation rate for African Americans declined to 60.2% in December 2013, the lowest rate since December 1977.  The Great Recession effectively reversed 36 years of progress for Black families.

This long term unemployment is having a detrimental effect on Black finances as well.  According to the State of the Dream study by United for a Fair Economy, between 2007 and 2010:

  • Black families lost 27.1% of their average net worth
  • Black families had slightly more than $17,000 in retirement accounts compared to $109,000 for the average white family
  • The average net worth of Blacks was $97,995 compared to $629,736 for whites

Since Blacks are having such a hard time recovering in the open job market, the entrepreneurship pathway appears to be the best chance for families of color to rebuild wealth. Start by exploring a side hustle that can supplement your income and possibly grow to replace full-time employment altogether.

Sandy Smith
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Sandy Smith

Chief Troublemaker at Yes, I Am Cheap
Sandy Smith is the founder of the peer acclaimed personal finance blog, Yes, I Am Cheap where she shares winning strategies for reducing debt. You can find Sandy all around the internet taking about getting you out of debt. She is also the founder of Colorful Money!
Sandy Smith
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About the Author

- Sandy Smith is the founder of the peer acclaimed personal finance blog, Yes, I Am Cheap where she shares winning strategies for reducing debt. You can find Sandy all around the internet taking about getting you out of debt. She is also the founder of Colorful Money!

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Did you know?

African Americans are significantly more likely to have some type of debt (94%) compared with the general population (82%). Credit card debt, student loan debt, and personal loans are all significantly higher in the African American community.

Source: Prudential’s 2013 "African American Financial Experience" study