Prosperity Watch Issue 41, No. 1: Labor force resiliency in the face of high unemployment

The Labor Day release of the State of Working North Carolina report highlighted the critical role that a diverse workforce will play in North Carolina’s current and future competitiveness and in expanding economic well-being.  As the state’s working-age population becomes more diverse, there is a great potential  for the development of innovative work processes and products as well as stronger links to global marketplaces.  Moreover, as more North Carolinians do better economically through increased wages, stronger career pathways and greater economic security, so too does the broader economy in the form of stronger economic growth and stability.

And yet, differences in the economic experience of North Carolinians today based on who they are and where they live threaten the opportunity that building an inclusive and diverse workforce could deliver to the state’s economy as a whole.  Well-documented is the difference in experiences of unemployment and underemployment: African-Americans and Latinos in North Carolina have nearly twice the rates of both as whites, largely as a result of the concentration in industries that were hard hit in the recession and the significant job loss overall in communities of color.  For all North Carolinians, these differences have an impact too.  In counties that are majority people of color, losses in annual wages were nearly $100 more for all workers in those counties on average than in all other counties.

In the face of high unemployment and labor market outcomes that are pushing African-Americans in particular further behind, an interesting trend has emerged.  In the nation as whole and North Carolina, African-American workers have demonstrated resiliency in their connection to the labor force. The unemployment rate for African-Americans remains much higher relative to whites, growing by 4.6 percentage points from 2007 to 2013 compared to a 2.7 percentage point change over the same period for whites. And yet, African-Americans have been much less likely to leave the labor force altogether despite weak job prospects.  The labor force participation rate changed from 2007 to 2013 for African-Americans by 2.6 percentage points while dropping far more for whites by 4.2 percentage points.

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