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No job, no money, no life

Cynthia E. Griffin- | 6/11/2009, 5 p.m.

The U.S. Department of Labor released its latest unemployment figures last week, and the picture is not pretty for African Americans.

While the overall national rate jumped to 5.5 from 5.0 in May (the largest increase in a single month since 1986), the unemployment figures for African American was nearly 10 percent (9.7), up from 8.6 in April.

According to some reports, there are two reasons why this large jump in the overall unemployment rate should not be extremely worrying. First, officials point out that the unemployment rate increased because a large number of individuals entered the labor force.

Actual labor force participation increased to its highest level in over a year. An increase in the participation rate is a good thing for the economy because it increases the number of workers who can contribute to economic growth. However, many of these new entrants to the job market could not find work, and this increased the unemployment rate.

The other, very unusual aspect is that this monthly report has a large jump in the number of teenagers in the labor market. Teenagers, those ages 16 to 19, make up a very small percentage of the labor force--less than 5 percent. In this month, almost half of the new entrants to the job market were teenagers. Furthermore, the numbers of unemployed teenagers, who traditionally have a much higher unemployment rate than workers 20 and older, accounted for about a third of the total increase in unemployment.

But that may not be the case for African Americans, because the April drop in the employment rate was actually an aberration. Prior to that the number of African Americans who were jobless, had been creeping steadily upward from 8.6 percent in the fourth quarter of 2007 to the current figure.

And the May figure may be deceptively low because of the significant numbers of African Americans incarcerated, added James Peoples, a professor of economics at the University of Wisconsin at Milwaukee who specializes in labor economics.

"Historically the black American (unemployment) rate has been twice that of whites (at all levels) on down to the teenagers and as far back as when they started measuring the rate," said Gregory Price, chairman of the Morehouse College Department of Business and Economics.

Peoples also noted that the rate for African American teens is even higher that the overall rate for blacks.

Historically, Price said there have been a number of reasons for this lag including spatial deficits. This means blacks and minorities are in isolated urban areas where the labor market is not as strong. Consequently, there is a mismatch between where they live and where the jobs are, explained the Morehouse professor.

"There is also a skill deficit, although when you control for that you tend to still see an unemployment gap," Price explained.

Finally, there is the issue of racial discrimination particularly against African American males, noted Price.

He goes on to point out that this continued employment gap means African Americans will lag behind other groups in terms of quality of life issues, given that 80 percent of individual income typically comes from participation in the labor market.

Peoples added that there are social and economic implications behind the high black teen unemployment rate.

"You are delaying (getting) experience in the work force, and that is very important. That is how do I present myself on the job? What is it that employers want? The later you start on that (if you are not going to school), the more difficult it is to pick up on what it takes to keep a job. The economic implications are, if you're not going to school and you're not working, you're not building income and you're not building human capital, which means building up skills."