October 12, 2004

Recent Job Loss Hits African Americans Harder

Black middle class hurt by loss of long-tenure jobs 

For Immediate Release:  October 12, 2004

Contact: Debi Kar, 202-387-5080   

The high and rising rate of job loss for workers in long-tenure jobs since 2001 has hit African Americans particularly hard. The recession and subsequent weak recovery have put black workers at a disadvantage relative to their white counterparts, according to a new study from the Center for Economic and Policy Research (CEPR). This new report by economist and CEPR Senior Research Associate John Schmitt, Recent Job Loss Hits African American Middle Class Hard, examines Displaced Workers Survey (DWS) data recently released by the Bureau of Labor Statistics.

"The recent sharp rise in the loss of long-tenure jobs is a direct assault on the black middle class," says John Schmitt, the report's author. "For most workers, a long period with the same employer brings the earnings, benefits, and job security that are the building blocks of a middle-class standard of living."

During 2001-2003 (the most recent data available), the rate of job displacement rose much more for long-tenure black workers than it did for long-tenure white workers. The three-year displacement rate for long-tenure white workers hit 5.6 percent - or about 1 of every 18 long-tenure white workers. These figures for 2001-2003 represent a 1.6 percentage-point increase compared to the rate for 1997-1999, which was a period of rapid job growth and sustained, low unemployment. Meanwhile, black workers have seen even larger increases in displacement in 2001-2003, with job displacement rates rising 3.1 percentage points relative to 1997-1999 to 7.3 percent - or about 1 in 14 long-tenure black workers.

African Americans who were able to secure long-standing jobs during the economic boom of the late 1990s enjoyed about the same level of job security as their white co-workers. Between 1997 and 1999, about 4.2 percent of long-tenure black workers were displaced, compared with about 4.0 percent of long-tenure white workers - an average of about 1 in 25 workers for both blacks and whites.

On average, the long-tenure workers whose jobs have come under threat are: older (43.3 years old compared to 37.7 for short-tenure workers); work longer hours (40.2 hours per week, compared to 37.6 hours); more likely to be salaried employees (38.7 percent compared to 28.8 percent); more likely to be in a union (21.4 percent, compared to 8.9 percent); and more likely to work in manufacturing (13.4 percent, compared to 7.8 percent). Further, the long-tenure black workers typically earn more than their short-tenure counterparts. The median long-tenure worker, for example, earns about $14.40 per hour, compared to about $12.00 per hour for those with short tenure.

Sustained, low unemployment in the late 1990s helped put long-tenure African American workers on a nearly equal footing with white workers, at least with respect to job displacement. Between 1997 and 1999, about 1-in-25 long-tenure white and black workers were displaced from their jobs. The recession and anemic job recovery over the period 2001-2003 has now put long-tenure black workers at a significant disadvantage.