What are some labor market challenges for black Americans?

By Matt Johnson

The mainstream media tends to focus on the simple things when it comes to discrepancies between black and white folks. However, it is always much more complex than they report.

In this blog, I have reported crime rates in depressed neighborhoods and wards of urban environments. I have also reported high unemployment rates and low education attainment rates. And I have also reported on decaying housing conditions such as foreclosures and condemned and vacant buildings.

I have illustrated in many articles that these areas of depression tend to be areas that are predominantly black. Sometimes I have done this explicitly and in other times I have done it implicitly. But either way, I have always included and highlighted these issues as multi-variable problems. That is, I have demonstrated that it is not just one problem; I have demonstrated it is a multitude of problems.

But what I have not yet written about is the labor market for this demographic group. I have not yet highlighted or discussed the importance of an education and how that would provide opportunity; and I have not yet highlighted or discussed the importance of skills and acquiring skills and how that would provide opportunity.

Moreover, I have not yet highlighted or discussed the importance of industry and how picking an industry will lead to greater wages and job security and how that would provide opportunity; and I have not yet highlighted or discussed geography and how that would provide access to a greater number of jobs and opportunity.

In this article, I will provide a short explanation of 4 factors that affect entrance into the labor market for a worker along with data illustrating the current location of black Americans.

Education

One could make an argument that this is the beginning of the road. Why is this? Because success in life is correlated with education, and ridiculously so. In almost every economic measure, a person who has a degree has a higher probability of making more money and a higher probability of job security, although there is variation between industries.

On June 6, 2016, The Brookings Institute published an article on 7 findings that illustrate racial disparities in education. Here is the list of those findings:

  1. School readiness gaps are improving, except for black kids
  2. Misbehavior in school can pay off for white, but not black students
  3. Teacher-student racial mismatch harms black kids
  4. White and Asian students are more likely to be exposed to advanced classes
  5. Gaps remain in high school completion rates
  6. Similar college enrollment rates mask unequal degree completion rates
  7. Black and white students do not attend colleges of equal quality

As with all science, more research is needed in these subsequent areas. In addition, one ought to ask the question, where are the issues more likely to take place?

Is a researcher more likely to find these disparities in a stable economic system with low unemployment, high education and income attainments, and low crime rates? Or is a researcher more than likely to find these disparities in an unstable system with high unemployment, low education and income attainments, and high crime rates?

Skills

As a person goes through life, their skill set will increase. And as their skill set increases so will their pay, which means a person will attain greater earning and purchasing power as they get older. And this is the case for all racial groups. So what are some factors that may influence earning potential?

First, an initial job during teenage years will increase one’s earnings potential over the course of a life-time. This is because teenagers will begin to learn basic market skills and an intuition of how the market works. However, the unemployment rates among racial groups between the ages 16 and 24 are divergent.

If one is black and male, or hispanic and male, then his unemployment rate is higher than the national average. Essentially, both groups are starting from the rear of the market earnings race. In contrast, if one is Asian and female, or white and female, then her unemployment rate is lower than the national average.

Here are the statistics:

employment-status-of-16-to-24-2013-to-2016-dwm

Education will also affect skills. The market is built on science and math, and how science and math perpetuate market engines.

We published an article last summer titled Top 10 Paying Bachelor’s Degrees. In it, we shared with our readers which degrees were the top 10 earners straight out of college. All 10 were engineering degrees:

Rank Major Degree Type Early Career Pay
1 Petroleum Engineering Bachelor’s $101,000
2 Mining Engineering Bachelor’s $71,500
3 Chemical Engineering Bachelor’s $69,500
4 Computer Science Bachelor’s $69,100
5 Computer Engineering Bachelor’s $68,400
6 Nuclear Engineering Bachelor’s $68,200
7 Systems Engineering Bachelor’s $67,100
8 Electrical & Computer Engineering Bachelor’s $67,000
9 Electrical Engineering Bachelor’s $66,500
10 Aeronautical Engineering Bachelor’s $65,100

 
This of course doesn’t mean other degrees don’t pay well straight out of college or don’t have high potential earnings over the course of a life-time. However, what it does show is degrees in science, technology, engineering, and mathematics will pay dividends for those who obtain those degrees. In addition, degrees in economics and finance are competitive degrees in the marketplace. For example, those in finance usually have the highest weekly average wages of all industries in the Minneapolis/St. Paul market.

Industry
Industry can dramatically decide the potential earnings for a worker in the marketplace. As previously stated, those who work in the mathematical sciences, engineering, and finance industries are earning more out of the gate and over a life-time.

And so the question is, how do black Americans compare by industry? With a little help from BlackDemographics.com, the reader can see that black Americans

are again overrepresented in government jobs such as education, social assistance, and public administration. African-Americans also have a large presence in the health care industry which is expected to see substantial job growth for the foreseeable future.

Here’s the data provided by BlackDemographics.com:

blackdemographics-2012

Geography

This last category can also dramatically affect someone’s entrance in the marketplace. This is because American neighborhoods are still relatively segregated by racial group. For example, Milwaukee’s segregation was highlighted after the police shooting death of Sylville Smith in August of 2016. According to Business Insider, Milwaukee is the most segregated city in the United States. As this map illustrates, black Americans are highly concentrated in two distinct areas:

16-racial-dot-map-milwaukee-w710-h473
Milwaukee. Photo: Courtesy of the University of Virginia Weldon Cooper Center for Public Service.

The green dots are black Americans while the blue dots are white Americans. Of course a thorough geographical analysis of each American city would send this point home. But immediately, research by this publication has demonstrated correlation between black Americans and depressed environments which include adverse socio-economic factors such as high unemployment, relatively low earnings compared to other racial groups, low education rates, high crime rates, and disparate housing issues in the form of foreclosures and condemned and vacant buildings.

One last thought to consider, black businesses are more than likely to hire black employees while white businesses are more than likely to hire white employees despite federal laws. And this hiring behavior seems to make sense based off of geographical data.

Matt Johnson is a writer for The Systems Scientist and the Urban Dynamics blog; and is a mathematical scientist. He has also contributed to the Iowa State Daily and Our Black News.

You can connect with him directly in the comments section, and follow him on Twitter or on Facebook

You can also follow The Systems Scientist on Twitter or Facebook.

Photo credit: Pixabay

 

 

Copyright ©2017 – The Systems Scientist

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