Black Americans Worst Hit as New Jobless Claims Surge Past 1M

Anti-racist messaging is seen in Denver following the Memorial Day death of George Floyd in police custody, which sparked nationwide protests and scrutiny on America’s racial disparities. (Courthouse News photo/Amanda Pampuro)

(CN) — The number of Americans filing initial claims for jobless benefits returned to 1.1 million last week, though insured unemployment has dropped by two-tenths of a point overall, the Labor Department reported Thursday. 

Between the Pandemic Unemployment Assistance program, the Pandemic Emergency Unemployment Compensation and traditional unemployment, 28 million Americans received jobless benefits as of Aug. 1. This number is about 200,000 less people than the previous week, bringing the unemployment rate this week to 10.2%.

Though the federal government typically adjusts raw data to reflect seasonal, predictable changes in the job market, the new applications for unemployment insurance actually reported by states came in at 891,510 for an unadjusted national insured unemployment rate of 9.8%.

On average, 46,392 Americans tested positive for Covid-19 every day over the last week. Since March, 5.54 million Americans have tested positive for the disease, and 173,000 have died.

Alongside the slight drop in insured unemployment, the Bureau of Labor Statistics tracked a 1% decline in joblessness throughout July. The country that provides all citizens “equal protection of the laws” is not providing equal protection in the labor market, however. As the pandemic recession stretches into fall, existing racial disparities in the workforce are only getting worse.

In July, the Bureau of Labor Statistics reported 9.4% of whites are unemployed while the jobless rate remains 14.6% for Black Americans and 12.9% for Hispanics.

From February to April, the New York Federal Reserve found the number of active business owners in the U.S. fell by nearly 22%, but the number of Black-owned businesses decreased by 41%. The number of white-owned businesses dropped by 17% during the same period.

Devon Warren is one of 11.2 million self-employed Americans floating himself on the Pandemic Unemployment Assistance program. Based in Montclair, New Jersey, the photographer closed shop in March and subleased out his studio space when Wells Fargo refused to help him apply for a loan under the Paycheck Protection Program.

“They told me they weren’t offering any business loans. They told me to go through the government website,” Warren said.

While Wells Fargo is one of several banks being sued for prioritizing large customers over helping small businesses during the pandemic, financial institutions have a long history of turning away Black business owners in America.

Five Points Beauty & Barber has been in 77-year-old Joyce Washington’s family since 1956 and is where she continues to cut hair to this day. (Courthouse News photo/Amanda Pampuro)

In August, the Federal Reserve Bank of New York traced stark inequities throughout the Paycheck Protection Program’s distribution of $349 billion in forgivable loans.

The report found “weaker cash positions, weaker bank relationships, and preexisting funding gaps left black firms with little cushion entering the crisis.” 

Federal aid only went to 7% of businesses in the Bronx where 35% of people are Black and 48% are Hispanic. In Cook County, Illinois, where 20% of businesses are owned by Black Americans, aid went to only 15% of the county’s total 549,686 firms.

Rather than by economic need or impact of the health crisis, the Federal Reserve found more aid simply went to businesses with better banking relationships and access to credit. 

Warren eventually got a Paycheck Protection Program loan to cover expenses for two months. Entering the sixth month of the pandemic, Warren said he is trying to figure out “how to turn the minor setback into a major comeback — pivot is my favorite word of 2020.” 

More financial aid would help. “I’m not asking that they give Black-owned businesses more money, just give us the same money,” he said. “I just want what everybody else was getting — I don’t need any more; I don’t need any easier; I just want to have a fair share of the pot.”

At this time last year, 78% of Black Americans polled by the Black Economic Alliance considered the challenges of accessing capital and small business loans among their top concerns. This year, U.S. Black Chambers President Ron Busby told the U.S. Congress 70% of his members were denied federal aid under the Paycheck Protection Program.

“Decades before the advent of the coronavirus pandemic, historical discrimination has consistently distorted the advancement of Black America,” Busby told Congress on July 23. “The coronavirus-related labor losses have been especially devastating for Black America due to historical struggles from higher unemployment rates, lower wages, lower incomes, lack of savings, and significantly higher poverty rates.”

Others are skeptical that the financial aid from the federal government alone will have long lasting impacts.

“Is there something that the government can do? Yes, but then even those that get the help — if they’re not thinking on a collective bandwidth — it is only going to help them. And when they’re gone, it’s not going to do much for the rest of the community,” said Esi Kagale Agyeman Gillo, co-founder of DIFFvelopment, a nonprofit dedicated to empowering Black college students to “overcome socioeconomic barriers and build generational wealth.”

She started the nonprofit after earning a master’s degree from Oxford University and, in the wake of the Great Recession, still found herself working at a juice bar.

“You get a degree, you get a job, that’s what I knew. So when that didn’t happen, and I was also seeing some of my friends really settling for things that were beneath them in terms of the dreams we had in college, I started to get curious about why that was,” Gillo said. “Every generation is starting over each time. There has to be a point where the next generation is like, oh wow, I can just dream.”

Anti-racist messaging is seen in Denver following the Memorial Day death of George Floyd in police custody, which sparked nationwide protests and scrutiny on America’s racial disparities. (Courthouse News photo/Amanda Pampuro)

As it stands, Black women experienced the largest unemployment gain during the pandemic.

Only 4.8% of Black working women were unemployed in February. That number leaped to 16.4% in April.

A Levy Institute analysis attributed the trend to segregated workplaces — Black women are concentrated in five job sectors that faced numerous layoffs — as well as the strains of poverty and employment discrimination. 

“I think we need to channel resources where they’re needed most,” said Thomas Masterson, director of applied micromodeling at the Levy Economics Institute at Bard College who worked on the study. “Because of the systemic racism built into our economy and society, that means that means channeling resources towards people of color.”

“The problems that Black workers face in the labor force are not of their own making,” Masterson added. “I don’t think we can create economic equity without eliminating racism from our society.”

According to the Washington, D.C.-based Economic Policy Institute, wages for Black women continue to lag other groups, even for those in frontline jobs at high risk of contracting Covid-19. 

From health care to restaurant jobs, the average Black woman makes 11–27% less than a white man in a similar position. The average white male doctor makes $64.41 an hour while a Black woman makes $45.59 per hour. White male restaurant workers are typically paid $10.51 per hour compared to Black women who make $9.39.

Many Black Americans see entrepreneurship as a way to build something of their own. And they’re not giving up.

“Black-owned businesses are definitely one of the only ways for African Americans in the U.S. to experience an unadulterated benefit from the work that they put in,” said Alioune N’Gom, founding director the New York Society of Play, an inclusive game studio for youth and their parents.

Throughout Covid-19, the business expanded online, moving from hosting games in New York to hosting games for youth in 14 other states.

N’Gom said he just wanted to bring the games he grew up loving to diverse groups of kids.

“As a self-proclaimed nerd who has grown up doing things like live-action role play and being very into Dungeons & Dragons, trading card games and the like, a lot of those spaces are being predominantly white,” N’Gom said. “The feeling of otherness in those spaces can be palpable. So it was very important for me to make sure that, if I’m creating a space, it can be a space that’s welcoming to all people.”

“If you build it, they will come,” N’Gom said.

Five Points Beauty & Barber has been in 77-year-old Joyce Washington’s family since 1956 and is where she continues to cut hair to this day. (Courthouse News photo/Amanda Pampuro)

Others see the Covid-19 recession as only the most recent market force to shake up communities of color. For the last decade, Denver’s Five Points neighborhood, once dubbed the Harlem of the West, has been reshaped by rising costs and gentrification 

“Things have totally changed,” said Joyce Washington, 77, who grew up in the neighborhood and still runs Five Points Beauty & Barber with her sister.

Though mostly retired, Washington sees occasional clients and earns enough to pay the ever-rising property taxes. She said she is following government guidelines, wearing a mask during appointments and spending most of her time in quarantine. Most of all, she misses going to church.

“We have no money. We have no clients. The pandemic is here, but we’re holding on. You have what you have and you hold onto it,” she said. “We’re surviving, and we’re not unhappy about it. God has been good. He has kept this family because we are religious people.” 

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