Minnesota's Black jobless rate climbs while overall figure hits record low

The unemployment rate for Black Minnesotans has been climbing for much of this year, contrasting with the steady decline of the state's overall jobless rate to the lowest level for any state in U.S. history.

At 7.3% in July, the state's Black unemployment rate has more than doubled in the last year and was three times the white unemployment rate of 2.4%. Nationally, Black workers are unemployed at twice the rate of white workers.

The development reverses gains seen last year. The snapback from the pandemic downturn produced a few months when, for the first time, the unemployment rate of Black Minnesotans dipped below that of white workers.

It also contrasts with the period of low overall unemployment and the tight labor market from 2016 through 2019, when the jobless gap between Black and white workers in the state shrank.

"This is not what we would expect and it is concerning," said Abigail Wozniak, a labor economist at the Federal Reserve Bank of Minneapolis.

After initially seeing much higher rates of joblessness in the first months of the pandemic, Black workers in Minnesota moved out of the labor force in greater rates than other racial groups. For a time early in the recovery, that made the Black unemployment rate look better since it was calculated against a smaller base.

"They tended to have longer durations of unemployment than white workers," said Cameron Macht, a labor-market analyst for the Minnesota Department of Employment and Economic Development (DEED). "And then it seems like their return to the labor force was a little bit slower and they have seen more struggles."

This year, more Black Minnesotans have come off the sidelines, surpassing in some recent months the labor force participation rate of white workers. But employers are not hiring them at the same speed those workers are becoming available.

"We're really seeing the compounded effect of multiple disparities," said Antonio Cardona, vice president of career readiness for Project for Pride in Living in Minneapolis.

At a moment when employers are desperate to find workers — Minnesota's labor market is the second-tightest in the country with job vacancies outnumbering the unemployed by nearly 4 to 1 — the clear gap in Black employment is not just a matter of racial equity but of lost economic potential for the state.

Minnesota's economists and workforce specialists have wrestled with the state's racial employment gaps for some time. A decade ago, a state advisory committee issued a 96-page report for the U.S. Commission on Civil Rights after a study found that the Twin Cities had the worst Black-white unemployment gap in the country.

Coming out of the 2008-09 recession, the state's Black jobless rate peaked at 23.3% in August 2011 and remained over 10% until 2016.

DEED last week released a report that showed how the state's racial disparities in employment, education and income — among the worst in the nation — got better in some ways. But it also showed that some persist even with low overall unemployment.

DEED Commissioner Steve Grove said Black workers' concentration in lower-paying jobs and industries, which have seen a lot of churn in the pandemic recovery, is likely one factor in play.

"They may be in the process of shifting from one job to another," he said, noting that wage increases in some industries may be drawing workers away from their current jobs.

But that could also make Black Minnesotans more vulnerable to layoffs if the economy does head into a recession in the coming months, he added.

"It's occupational categories that Black workers work in," Grove said. "It's the racism that exists in our society today. And it's the lack of connections between businesses and the Black community."

Minnesota has a long history of discriminatory lending and housing practices that harmed the wealth of its Black residents, the legacy of which can still be seen today. While Minnesota is an affluent state, the median income for Black households is slightly lower in Minnesota compared with the U.S., and is about half that of white Minnesotans.

Nationally, some research shows that, even when experience and education gaps are reduced or eliminated, work opportunities and outcomes for Black people still lag behind those for whites.

Education disparities in Minnesota remain large. At 18%, the state has the third-highest percentage of Black adults with less than a high school diploma, compared with 13% for the U.S. And about 22% of Black adults in Minnesota have a college degree compared with 38% of white Minnesotans. Those differences affect both job opportunities and incomes.

"When you look at the educational makeup of the Black community in Minnesota and you look at the opportunities that are available requiring a four-year degree, it's just a mismatch," said Marcus Owens, a Twin Cities leader for OneTen, a nationwide organization pushing employers to lower degree requirements in hiring.

There are also some newer challenges brought on by the pandemic. Finding dependable and affordable child care, transportation, and housing has become more difficult, said Tawanna Black, chief executive of the Center for Economic Inclusion in St. Paul.

Many people worked remotely during the pandemic. But Black workers were more likely to be in industries such as health care, transportation and warehousing, and leisure and hospitality that required in-person work. Remote and hybrid work has been "least available to Black workers," Black said.

Ling Becker, director of workforce solutions for Ramsey County, noted that remote jobs also create different types of hurdles: They require computers and internet service at home.

Similarly, she's seen more job postings that require a driver's license — for delivery jobs or bus drivers, for example. But Becker noted that it became harder to get a driver's license during the pandemic, which had already become more expensive and complicated since many schools no longer offer driver's education.

When Mariah Hamp moved to Minneapolis several months ago, she applied to a lot of jobs and got many offers that paid $18 or $19 an hour — but most didn't fit around her son's day-care hours or would have taken too long to get to without a car.

"There are jobs for sure hiring," she said. "However the jobs that are hiring, they're looking for second and third shifts. If you're a single parent like me who doesn't have a support system, it's like, yeah, I can find a job, but can I sustain it?"

Hamp ended up finding a job at the airport as a gate agent, a job she kept for a few months. She loved the work — "I'm a people person," she said — but it was only part time and the pay was just $16.25 an hour. And it didn't leave her with much to live on after paying for child care.

So she quit and enrolled in a 20-week medical administrative assistant training program. She's on track to graduate in a few weeks and hopes to land a job that will pay at least $20 an hour.

Some workforce experts say they see a rising interest among Black workers to find a different way of making a living. "We are finding a lot of people saying, 'I want to be my own boss,'" said Emma Corrie, CEO of Twin Cities Rise, which offers career training and personal empowerment programs in north Minneapolis. She added that they are tired of feeling mistreated by employers.

Data from last week's DEED report underscored the growing importance of Black workers in the future as more of the aging white population heads into retirement. Already, there's a greater proportion of Black Minnesotans in prime working years of 25 to 54. And nearly 30% of the state's Black population is under 15, compared with 20% of the overall population.

But many employers still aren't connected to communities of color, said Leroy West, president of Summit Academy, which offers workforce training programs in construction, health care and technology.

"You have to have employers look at creating different strategies and connecting with these communities so they can create a new pipeline instead of hiring who they've always hired," West said.