Monthly Archives: May 2014

By William A. Foster, IV

Imagine for a moment me, a Texan and southerner, moving to Boston for the first time as I did many years ago adjusting to the weather. To say it was a shock would be an understatement. After thinking I had made it through “winter” because I made it through December – Houston winter logic for sure – I was informed that winter was just starting. Wait, what? In Houston, we are warming back up in the 70s by February. Boston was my first time experiencing single digit weather week. Then to experience it for weeks on end made me wonder how anyone in their right mind lived here. It was cold and it was not letting up, but then a strange thing would happen. One day it would happen to creep into the high twenties or low thirties and I would see people out in shorts and riding around with tops down on their convertibles. Insert every confused face one could have. The reality was that after weeks of single digits a dramatic move up even to a temperature still considered freezing would psychologically make them think it was warm. This in a nutshell is what is happening to African America and its “improving” employment situation. It is so bad that even a modest move up makes us feel excited.

The notion of improvement is one thing, but knowing where a healthy unemployment rate versus improving unemployment rate is another. Our goal can not be to simply get the unemployment rate to single digits, but to get it to a competitive rate which currently is around 5 percent. A mark that seems like it would take a miracle for us to get too with our current dependency on affirmative action and the public sector. The reality is despite our dependency on these two things, it is African American companies of which there are not enough, which offer us the best hope. Currently, African American firms with paid employees represent 0.4 percent of all firms in America, but have employees equivalent to approximately 5 percent of the African American labor force.

Every month here at HBCU Money, we release the African American Unemployment Report the Monday after the nation’s job report is released on the first Friday of every month. It gives month to month statistics and analysis along with a rolling five month overview as well. One analysis every month without fail is that “African America remains the only group with double digit unemployment rate” when reviewing the country’s different groups and their unemployment rates.  Currently, African America’s unemployment rate is 450, 660, and 700 basis points higher than Latino, European, and Asian America’s, respectively. The latter having the lowest unemployment rate in the country of any diaspora group. So much for that oppressed minority and people of color boat we keep thinking we are in with Asians and Latinos. The gap between us and other groups – even our “color comrades” – is not even close.

So how many jobs would it take to at least get us to the 9.9 percentage unemployment rate? Approximately 462 000 jobs would be needed at our current labor force based on March’s African American unemployment report. I must admit when I first calculated it was followed with a deep sigh. At the moment, the country as a whole can not even produce 200 000 jobs a month as we are still paying the cost for decades of an over leveraged and an inordinate consumption economy. Over the past five months African America’s job growth has been averaging 62 000 jobs per month, but over the same period the country is averaging 140 000 jobs per month. In other words, we would need an increase of 122 percent just to match the nation’s average in job creation.

Job creation is no easy task for a country or community. It takes a healthy banking sector first and foremost. This allows an increase in mortgages and equity lines. Those in turn also allow people to borrow against their homes for loans or to use their home to secure Small Business Administration loans through their bank to start a business in their community. It would also require those home purchases to be in African American communities. Small businesses tend to be based in or near the communities they live in. The exception it seems in the African American community where businesses are predominantly owned by outsiders that drain the community of capital and employment opportunities. The ingredients may seem simple enough, but we all know cooking a great meal can take all day and when it is hot most do not want to stay in the kitchen.