Researcher Says Rate Employment Doesn't Accurately Represent Black America

Oct 6, 2017
Originally published on October 6, 2017 6:24 pm
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MARY LOUISE KELLY, HOST:

For the first time in seven years, the economy has lost jobs - 33,000 of them in September, according to numbers out today from the Labor Department. Economists say the weather may be to blame, specifically hurricanes Harvey and Irma. Bad weather meant hundreds of restaurants and bars closed down and food service workers couldn't work. Meanwhile, the unemployment rate continued to shrink. It's now at 4.2 percent. Economists say a rate that low - basically anything below 5 percent - represents full employment. But that average may hide some things, namely the disproportionate level of unemployment experienced by African-Americans.

Andre Perry from the Brookings Institution has written about this. He is in our studio now. Welcome.

ANDRE PERRY: Hi, how are you?

KELLY: I am well, and we're glad to have you here. Let's start by defining the term. What is full employment?

PERRY: Well, full employment generally means there's more jobs than there are people available. And we know that to be true, that employers are having a hard time hiring people largely because the skills don't match up...

KELLY: OK.

PERRY: ...With the jobs that are available.

KELLY: So basically everybody who wants to work, there's a job out there for them.

PERRY: Theoretically.

KELLY: And you argue that this full employment hasn't reached black America. Explain.

PERRY: Oh, yeah. In the column I wrote for CityLab I provocatively ask, what does full employment mean for a black person in Baltimore, where unemployment is three times the rate of white men? Same thing is true in Chicago. We know that this term masks discrepancies in employment regionally and in terms of major racial groups.

KELLY: It's an average.

PERRY: It's an average. Right.

KELLY: So there are going to be - in certain groups the number could be way higher or way lower depending on who you're talking...

PERRY: Exactly. So the problem is if we have three times the rate of unemployment for specific groups and we're willing to live with it as unemployment, we're essentially saying that black men, people in rural America are the sacrificial lambs of full employment. And so the economy is growing - maybe not as robustly as we would like - but it's growing without particular groups - black, Latinos - in particular areas and in rural America.

KELLY: And you're arguing that the term itself, just the language being used there, full employment, is masking a serious problem of racial inequality?

PERRY: Well, it's more than language because the Feds will increase interest rates. And we know that women, blacks and Hispanics are more borrowers, so it will disproportionately impact those folks. But in terms of language, it is important because if we never talk about the severe unemployment rates in specific communities, we never end up addressing them.

KELLY: Your argument is that if it looks like the unemployment rate is at full employment, that that part of the economy's doing well, it may lead to, say, interest rates being hiked, which would make it...

PERRY: That's right.

KELLY: ...Harder for groups that are struggling that aren't actually fully employed to be able to, say, borrow.

PERRY: That's exactly right.

KELLY: Is there a better way to measure it? If you don't like the way that full employment, that term, is capturing what's actually going on, how should economists think about it?

PERRY: Yeah, some of it is a matter of semantics. But it's also just a matter of measuring different things while we release these reports. We come to expect when the jobs report comes out to celebrate or bemoan what's going on. And I think when we're in a place of full employment we celebrate. But there are lots of people who are not celebrating. And so if we never get to those other measures of who's not working, who's unemployed, then we'll never address those issues.

KELLY: That is Andre Perry. He is Rubenstein fellow at the Brookings Institution and author of the CityLab article "Full Employment Has Not Yet Reached Black America." Thanks so much for stopping by.

PERRY: You're welcome. Transcript provided by NPR, Copyright NPR.