Women of Colour are the Key to Understanding Current Labor Market Dynamics

This is likely due to Black women’s greater likelihood of working in essential jobs, many of which are low-paid and offer few to no benefits.

Women of Colour are the Key to Understanding Current Labor Market Dynamics

Racial and Gender Disparities in the Labor Market

Last month, many noted that while overall unemployment rate went down, the unemployment rate for African Americans and Asian Americans increased, and although the unemployment rate for Hispanics fell, it was still higher than all other groups. Further disaggregation showed gender differences as one of the key drivers in the rise of the Black unemployment rate, fueled by the rise in the unemployment rate of Black women. The unemployment rate for Black men decreased from 16.1% to 15.5%, meaning that the increase in the overall African American unemployment rate was due to the uptick in the unemployment rate for Black women from 16.4% to 16.5% along with a rise in the unemployment rate for younger Black workers. Both Asian American men and women saw an increase in their (non-seasonally adjusted) unemployment rate in May (12.7 to 12.9% for Asian men and 15.5% to 16.4% for Asian women). This Thursday when the U.S. Department of Labor releases its monthly jobs day statistics, we’ll get to see if the labor market outcomes for women continue to drive racial disparities.  

Obstacles Women, Especially Women of Color, Face in the Labor Market 

The pandemic has laid bare and exacerbated pre-existing, long-standing disparities in the labor market faced by women, especially women of color, that have been worsened by the current economic crisis. Between February and May 2020, women overall lost 10.9 million jobs, accounting for more than half (56%) of all nonfarm payroll jobs lost during the period. This essentially wipes out, in a matter of months, a decade of women’s progress and jobs gains. The numbers may be worsened by the lack of child care, which disproportionately harms Black and Hispanic families, and the increase in caregiving which has also forced many women to leave their jobs, reduce their work hours, or have difficulty finding a new job as they perform the majority of caregiving for elderly or sick family members and children whose school or child care provider is unavailable. 

The experiences of women of color can provide important insights into the current problems in the labor market and the type of recovery interventions needed to improve outcomes for workers. Many women of color must confront and navigate the combined effects of race, gender, and ethnic bias, often reflected in lower wages, fewer promotional opportunities, inadequate workplace supports, and higher rates of unemployment which is particularly relevant now. Understanding the intersection of multiple forms of bias and discrimination is crucial to the conversation about systemic barriers in the labor market. CAP has written about how women of color are on the frontlines at work and at home and experience disproportionate economic effects from the coronavirus crisis. For example, the May jobs report showed that Black women, Hispanic women, and Asian women continue to experience the highest rates of unemployment compared to men and workers overall (see Figure 1).

Figure 1. Unemployment Rate by Gender and Race and Ethnicity, May 2020

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The employed share of different groups of women of color compared to their population also fell below 50%, seeing only a slight uptick in May 2020 (see Figure 2). Latinas and Asian women have the lowest Employment-to-Population ratio. Black women, who have historically engaged in paid work outside the home at higher rates than all other groups of women, have the highest Employment-to-Population ratio among women, although still lower than men. This is likely due to Black women’s greater likelihood of working in essential jobs, many of which are low-paid and offer few to no benefits. 

 

Figure 2. Employment-to-Population Ratio Among Women, by Race and Ethnicity.

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Collectively, these numbers are an important reminder of the need to have an intentional focus on the unique drivers impacting labor market outcomes for women of color. This includes confronting the persistence of racism, sexism, and other forms of bias in shaping their workplace experiences and opportunities. Bringing an intersectional lens to the conversation about what constitutes a meaningful economic recovery is essential to ensure that all workers move forward together. 

The Recovery and these Gaps

When the data is released this month, CAP is going to continue looking at what happens to this black-white unemployment gap, the employed share in the June jobs numbers, and what is happening by gender within these racial and ethnic groups. Policy has helped keep some levels of consumer spending from completely bottoming out, but there is still a major concern about the lack of state and local government relief, with the fiscal year ending June 30th.

How the recovery proceeds will definitely be dependent on government action. The HEROES Act that is currently being debated may make a difference due to funding for state and local governments. State and local governments have already shed 1.5 million jobs since the start of this crisis, and women make up 2 out of 3 government jobs lost. These jobs fall heavily on communities of color.

Bureau of Labor Statistics (BLS) Survey Issues

There has been discussion, primarily from the May jobs report, about the misclassification issue in the survey response. This has been an issue since the beginning of the pandemic that the BLS has been transparent about, worked hard and continues to work on to fix. Deeper concern is also drop in response rate that has implications for properly measuring racial and gender gaps.