Blacks are not only disproportionately more likely than whites or Hispanics to experience long-term unemployment, they are less likely than whites to benefit from unemployment insurance. Even when taking into account differences in education, past employment, and reasons for unemployment, there is an 8 percent gap in the receipt of UI benefits between whites versus blacks and Latinos.
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Washington, D.C., July 23, 2012— For black workers, it’s a one-two punch to their economic security: blacks are not only disproportionately more likely than whites or Hispanics to experience long-term unemployment, they are less likely than whites to benefit from unemployment insurance (UI), a new report from the Urban Institute’s Unemployment and Recovery project shows.
Even when taking into account differences in education, past employment, and reasons for unemployment, there is an 8 percent gap in the receipt of UI benefits between whites versus blacks and Latinos.
African Americans, 11.6 percent of the labor force in February, were 22.9 percent of those unemployed for more than six months. Latinos were 15.7 percent of the labor force but 18.1 percent of the long-term unemployed. The comparable figures for whites were 72.7 and 59.1 percent, respectively.
“Racial and Ethnic Differences in Receipt of Unemployment Insurance Benefits during the Great Recession,” by Austin Nichols and Margaret Simms, shows that unemployed black workers have the lowest rates of UI receipt: 23.8 percent, compared to 33.2 percent among unemployed white workers and 29.2 percent among jobless Hispanics.
“African Americans are at a confluence of factors leading to low UI recipiency: low levels of education, concentration in occupations or industries where workers are less likely to be covered, and short tenure on jobs. This means many low-wage unemployed black workers are likely suffering more economic hardship than their white counterparts,” says Margaret Simms, an Institute fellow and the director of the Low-Income Working Families project.
“Disadvantaged Workers and the Unemployment Insurance Program,” by María E. Enchautegui, throws new light on factors associated with unemployment. Sixty-five percent of the unemployed in 2010 were black, Latino, young (age 16-24), single mothers, high school dropouts, limited English proficient, or born abroad. UI receipt for each of these subgroups is at least half the rate of workers in other demographic groups, 69 percent of whom get UI benefits.
Many states have considered an array of changes to their UI programs to expand the ranks of workers covered, such as loosening the work history requirement, increasing eligibility for those seeking part-time work, and including those who quit their jobs for compelling family obligations. “How Do Unemployment Insurance Modernization Laws Affect the Number and Composition of Eligible Workers,” by Stephan Lindner and Austin Nichols, finds that 70 percent of those who are unemployed would become eligible for UI benefits if these changes take effect.
Finally, almost three years after the end of the Great Recession, long-term unemployment remains a substantial problem in the United States. “Identifying Those at Greater Risk of Long-Term Unemployment,” by Gregory Acs and Michael Martinez-Schiferl, examines long-term unemployment and finds that certain population groups are disadvantaged in the labor market and more likely to experience unemployment than others; as such, they represent a larger share of both the recently unemployed and the long-term unemployed than they do of the labor force. Those groups include younger, less-educated, and nonwhite workers.
However, when other groups, including older workers, women, and those with college educations, do lose their jobs, they have a disproportionately high chance of staying unemployed for a long period. For example, workers age 55 and older make up 12 percent of the recently unemployed (those unemployed for less than 5 weeks) but 19 percent of the long-term unemployed (unemployed for 27 or more weeks). In addition, members of these three groups represent a greater share of the long-term unemployed in 2012 than they did in the depths of the recession in 2009.
The research for the four papers was funded by the Rockefeller Foundation and the Ford Foundation, as part of the Institute’s Unemployment and Recovery project.
The Urban Institute is a nonprofit, nonpartisan policy research and educational organization that examines the social, economic, and governance challenges facing the nation. It provides information, analyses, and perspectives to public and private decisionmakers to help them address these problems and strives to deepen citizens’ understanding of the issues and trade-offs that policymakers face.
The Unemployment and Recovery project addresses the critical unemployment policy challenges facing our country, examining outcomes, impacts, and effectiveness of policies and programs.