Unemployment Disparities in Three Pictures

Any way you look at it, the unemployment numbers released this week are good news for American workers. The Bureau of Labor Statistics estimated that the economy added 243,000 new jobs (at least after applying seasonal adjustments), and the official unemployment rate dropped to 8.3 percent. The official unemployment rate is an important indicator, but as I have said before it masks some important disparities between groups and does not capture discouraged workers that drop out of the work force, nor does it factor in that some workers are part-time because of economic circumstance (rather than choice).

Drawing on BLS data from 2008 to 2012, I have created three pictures that dramatically underscore these differences. (These data are easily available in tabular form, if you want to check them out.)

First, there is a huge gradient in unemployment by education, and that has grown substantially since the recession. Here I show the unemployment rate for those with less than a high school diploma versus college graduates. In January 2008, the gap was 5.6 percentage points, in January 2010 it was 10.5 points, last month the gap was 8.9 points, suggesting that the recovery may finally be setting in among the less education.

Second, there is a huge disparity between whites and blacks, and a smaller gap between whites and Hispanics. The white-black gap in 2008 was 4.7 points, and the white-Hispanic gap was 2.1 points. This gap increased to 7.8 and 3.9 points respectively, but is now starting to decrease.

Finally, the difference between the official unemployment rate (called U-3) and broad unemployment (U-6) has grown but is also starting to narrow. U-6 adds in the marginally attached (people who are not actively looking for work, but have looked in the last year and want to get back to work) and people that are working part-time because of economic circumstances. At the height of the downturn in 2010, almost 17 percent of individuals in this broader category could be classified as unemployed.

In future posts I’ll delve into some of the more econometrically sophisticated analyses of the broadening and narrowing over time, but sometimes it’s informative to just see some unadjusted numbers.

 

About Brendan Saloner

I am a postdoctoral fellow at the University of Pennsylvania in the Robert Wood Johnson Health and Society Scholars Program. I completed a PhD in health policy at Harvard in 2012. My current research focuses on children's health, public programs, racial/ethnic disparities, and mental health. I am also interested in justice and health care.
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