Program on Economic Inclusion
Explore data on how labor market outcomes differ by race in the following categories: employment rate, labor force participation rate, and unemployment rate.
Chart data last updated: November 9, 2020
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Examining published labor market performance measures by race is one way to monitor economic inclusion. While we recognize that there are many dimensions to this important issue, these regularly updated data series allow for a timely national perspective on economic inclusion and racial equity.
The most fundamental indicator of a group’s involvement in the economy is the employment rate, otherwise known as the employment-to-population ratio, which reports the fraction of a group that is employed at any given time. Historically, there are marked differences in the employment rate by race, with the greatest differences between Black and White populations. These differences reflect longer-term variances in opportunities; however, they also reflect the greater sensitivity of minority employment to recessions. That is, minority employment tends to be affected more deeply by recessions than does White employment. Racial disparities in the employment rate tend to grow during recessions and shrink during expansions. Initial pandemic-related decreases in employment were broad-based, but as the labor market began its recovery in May 2020, Black populations have seen slower returns to employment than other groups. No racial group has seen a full recovery to prepandemic levels in its employment rate.
Labor force participation rate
An individual is participating in the labor market if they are either working or actively looking for work. Individuals considered not participating in the labor market may be, for example, students, family caretakers, retired, or unable to work because of a disability. Differences in the participation rate by race tend to be smaller than differences in the employment rate by race and usually show little change in pattern during recessions. However, the pattern has shifted during the pandemic. Initial pandemic-related declines in participation have been broad-based across races, and returns to the labor force remain limited.
The unemployment rate refers to those without a job who are actively looking for work or are waiting to be recalled from a temporary layoff. The rate highlights the effects of recessions and recoveries on workers. Historically, Black unemployment has been significantly higher than White unemployment. Furthermore, racial discrepancies in unemployment tend to grow during recessions and shrink during recoveries. Initial pandemic-related increases in unemployment have been broad-based; however, overall, White and Hispanic workers have returned to work faster than Asian and Black workers.
For a more in-depth discussion of evolving labor market outcomes by race see Racial Gaps in Labor Market Outcomes in the Last Four Decades and over the Business Cycle.