California’s Labor Market Recovery Is Finally Reaching African American Workers

The share of prime-working-age black Californians who are employed is on the rise after plummeting during and after the Great Recession. Since 2013, the share of black Californians ages 25 to 54 — prime-working-age*— who are employed has risen steadily, an indication that California’s labor market recovery is finally reaching a group of workers who had been disproportionately affected by the economic downturn.

The employment rate for prime-working-age black Californians was 64.8 percent as of December 2014. This is up from the previous low of just 60.6 percent in December 2013. This uptick in the employment rate follows a sustained period during which the employment rate for black Californians languished between 60.6 and 62.6 percent (see chart).

Even with employment among African Americans moving in the right direction, much more progress is needed. The employment rate for black Californians remains far below its previous peak, in large part because black Californians experienced a far steeper drop in the employment rate due to the Great Recession than did many other demographic groups.  The employment rate for black Californians dropped from a high of 74.1 percent in May 2008 to the 60.6 percent trough in December 2013, a decline of 13.5 percentage points. This “peak-to-low” decline in the employment rate was much smaller for other demographic groups in California. The employment rate of prime-working-age individuals fell by 6.2 percentage points for white Californians, 6.8 percentage points for Latino Californians, and 5.2 percentage points for Asian Californians.

Public policies could improve labor market prospects for black workers by addressing obstacles to employment that disproportionately affect communities of color. For instance, African American and Latino workers are overrepresented in the criminal justice system, and people with criminal records face substantial obstacles to employment when they try to re-enter the workforce. Moreover, African American workers face discrimination in the hiring process, and many live in communities without access to good jobs. Such barriers have meant that even in times of economic growth, African American communities have historically experienced higher economic stress than other communities in a region. While increased employment among African Americans is welcome news, additional policies are needed to level the playing field for black workers in California.

— Luke Reidenbach

*Data note: The employment rate — the share of the population that is employed — is a useful measure of labor market health because, unlike the unemployment rate, it accounts for workers who have possibly dropped out of the labor force because of the lack of available opportunities. However, the overall employment rate also reflects changing demographic trends, such as the aging of California’s workforce. Inevitably, as Baby Boomers retire, the share of the population that has jobs will drop regardless of the strength of California’s economy. For this reason, the employment rate of prime-working-age adults, those ages 25 to 54, is an even better measure of labor market health. The data cited in this post reflect a 12-month moving average of the employment rate because data can fluctuate in any given month of the year.