Black workers are squeezed at the bottom and limited at the top
This post was exported to BlackEconomics.com on November 19th 2024
Summary
When I grew up, I heard of the Sacred Seven: seven occupations where Black people could do well during Jim Crow segregation. The seven are: Doctor, Dentist, Lawyer, Preacher, Teacher, Mortician and Businessman. They are occupations based on the needs of a segregated society. Black lived in a closed economic society where we were forced to trade with each other.
While we have lost many of the seven, African Americans have added new occupations like management, sales, technology, logistics, healthcare and government services which have help offset some of the loss in traditional areas of employment. However there is increased competition in many of the professions.
To find out what’s going on with the Black labor market, we did a detailed analysis of where black people work. We looked at occupations, income and industries. Our work is based on the 2023 annual Employed Persons by Occupation from Current Population Survey. We used the Employed Person by Detailed Industry.
Finally, to get the income data we used Median Weekly Earnings by Detailed Occupation. Blacks earn about 24% less, in general, than the national average wage according to the Department of Labor. But for this analysis, we will use the National Weekly Earnings by Occupation to judge whether an occupational category is important. For example, the number of Black software developers is small, but the earnings are large. And the number of cooks is large but the total income is small.
There are 21 Million Black Workers in the US
There are more than 21 million Black workers in the United States. Black people work throughout the economy but are concentrated in some sectors. We work in many important areas of the economy like healthcare, education, and management. We over-represented in service occupations such as bus drivers, hospitality workers, and retail sales while being underrepresented in other areas like technology, construction, finance, and the professions.
African Americans work in Management and professional occupations (36% of total Black Employment) and in service occupations (22%). About 20% of us work in sales and office occupations, and 17% are employed in manufacturing and logistics. Only 5% work in construction, farming, industrial maintenance, and natural resource occupations. Black workers, work in the same areas as Whites but at lower levels and for lower pay.
Black Employment
Blacks have a higher unemployment rate / lower employment rate than Whites. The current Black unemployment rate is about 6% while the national unemployment rate is 4.0%. Black unemployment is generally about twice that of whites but dropped significantly to only 1.5 times that of White unemployment during COVID-19. Recently, the Black to White unemployment ratio has increase since then to 1.75 times that of whites. The good news is that it will probably never return to the historic 2.0x times White unemployment.
Black people earn less than Whites and Asians but slightly more than Hispanics/Latinos. Black earn 76% of Whites weekly median wage. Blacks also experiences more racial discrimination than whites.
We are first going to look at where Black people work by occupation and then by occupation and income and by industry. We will first look at major occupational employment categories, then minor groups and lastly, sub-categories. Then we will add income to the mix to find out where African Americans earn the most money. Finally, we look at over and under-representation. Within each graph, we will comment on larger trends in society and Black employment.
We also have to discuss occupation versus industry. A manager is a manager and a warehouse worker does almost the same job regardless of industry. However, industry trends show which industries are friendlier to Black employment and which are not.
A little history
We have to talk about Black employment since the 1960s. Black employment has evolved as the labor market in the US has changed. We started out discussing the “Sacred Seven” under Jim Crow segregation. Since the passage of Civil Rights laws bar discrimination in employment, new opportunities have open up. Black employment has shifted, first to manufacturing and government service jobs. And then later from manufacturing to a service economy. Forty years ago, we denominated categories such as assembly line workers, food processors, janitors, housekeepers, and cooks. As manufacturing jobs disappeared and low-skilled immigrants entered the US, competition for those jobs increased. African Americans shifted to customer service, management, logistics, government, and retail sales.
The last shift was from basic service jobs to higher skilled jobs. The shift mirrored the giant increase in incomes for highly skilled jobs in the US tech economy. Unfortunately Blacks have not done well in technology. Each shift in the economy has left Black workers behind. The shift to services left Blacks concentrated in certain parts of the service industry. Then during the decade of 2000’s, the economy exploded with high-skilled and technology jobs that largely left Black workers out of the picture.
Larger Trends in society affect Black Workers
Black workers have been displaced from low-skilled work in many sectors, but have moved to semi-skilled work where a high school education, English language skills, and soft skills matter. That means customer services and government employment. However, Blacks face a ”glass ceiling” in skilled employment, professions, and technology.
Black employment has also been affected by the loss of middle-class, semi-skilled jobs that affected the larger economy. The “hollowing-out” of middle-class employment. The hollowing out of the middle class has been worse for Black people in the US than for Whites
It should be noted that the United States provides the worst help finding a new job, job training, career advancement and employment adjustment benefits of all OECD countries. The United States provides limited unemployment benefits, limited training and education and limited apprenticeship to help a worker move into a new job or career. The US also provides one of the worst social safety nets of all Western democracies. We provide no national health care, nor low-cost college education. Corporate training and development programs no longer exist anymore.
Black workers are squeezed at the bottom and limited at the top
However, what all that being said, the real story of where black people work is one of continued discrimination and lost opportunity. Lost opportunity for Black people and lost opportunity for the country as a whole.
You can see the impact of discrimination and missing opportunity in inter-group comparisons. Black to White. Black to Asian and Hispanic. And Blacks are not doing so well. There are still huge differences in employment and earnings in many fields such as high technology, professions, and construction. What the current employment data shows is the lack of opportunity in important occupations especially for young, low-educated, and low-skilled workers. It also shows the lack of training programs career progression, and support (mentors, DEI, Friends at work, and programs).
Black workers are squeezed from the bottom and limited at the top.
Notes:
Occupations cover the skills needed to perform certain jobs. Industry classification defines what employer makes or what services they provide.
Black Employment by Occupations
Major categories by employment
Black people work throughout the economy except in farming and construction. We have also done well moving into management in service occupations. We are over-represented in manufacturing and logistics work (transportation and warehousing).
Minor categories by employment
Four and half million black people work in professional occupations <<check this one>> followed by management, office work and transportation. A large number of African Americans also work in sales, manufacturing and food preparation occupations.
Black Employment by Occupation at the category and sub-category level
This chart better shows the employment details. We are looking at the biggest categories where Black people work. There are about 15-20 job categories where Black employment is concentrated. We work in management, healthcare, and transportation that dominate the employment categories but when you get into the details you can find interesting stories. It is important to note high levels of Black employment in finance, education, healthcare, customer service, and delivery services.
Major Occupational Categories by Income
Now we want to look at employment occupations by income. We want to review the categories where African Americans earn the most money. Black employment may be small, but income may be large. We use the weekly wage, unadjusted for the Black wage difference, to determine the important categories. When we look at income, it is important to note we are talking about total income. (the number of people times what they earn)
When we look at income, Management dominates. Nearly half of Black income comes from management occupations. However, it is important to note that sales and office income exceeds manufacturing and transportation. Manufacturing wages have stagnated since 2000 along with employment while logistics, which pays low wages, has soared.
Minor categories by income
Again, management and professional categories dominate, but sales, manufacturing office and transportation also show up. <<healthcare and education??>>. Office work and logistics are important because of the number of workers in each category even though pay is low.
Wages(Income) by detailed category
Black income by category shows a much broader view of which occupations create the most Black income. While total employment is important, Black income is also important. The graph shows that income from employment is widely spread for Black workers. At the sub-category level, we get a better flavor of who makes money and in what occupation. We see evidence of the split between high-income employment and low-income employment. Once again, management, business and finance, education, and health care have relatively high levels of income. While logistics, delivery and material moving have small incomes.
Over-representation and Under-representation by occupation
Now we want to look at where Black employment is concentrated and where it is lacking. We compare Black employment by occupation to the general Black employment level in the national economy: 12.8%. We are looking for categories, like postal service clerks (40%), where blacks are overrepresented. And we want to check out categories, such as farm workers, construction, and tech, where there is below-average Black employment. More Blacks work than the general population in healthcare, protective services and logistics then the general population and less Black work as farmers.
Blacks are over-performing in healthcare, logistics, and protective services.
Black employment under-representation
This chart is one of the most interesting. It’s about where Black people don’t work. In general, Blacks don’t work in construction and farming and related industries. Some higher-end professional categories show up like dentists. But more interesting is Black are under-employed in “White-relationship” industries like sales managers, architecture, and software at but at lower levels.
Industry Analysis
Black employment by industry Major
Industry-level data show a similar pattern of Black employment. African Americans overwhelming work in healthcare, education, and leisure and hospitality. And we are missing from industries like farming, construction and information technology.
Minor Category Employment by Industry
A closer look shows that black people work in education, government, manufacturing, healthcare and food and hospitality
Black Over-Representation by Industry
Summary: Where Black People Work
Black people work throughout the economy. The largest number of African Americans work in Business and professional ervices, followed by healthcare, education and government service. We also work in tech and professional fields.
But Africans Americans are concentrated in service industries like healthcare, education and government and in key sectors of the economy like logistic and manufacturing. Black people work in are over-represented in areas like government, logistics and warehousing, delivery services and the auto industry and trucking.
Squeezed at the bottom but limited at the top.
<<Recap black employment facts >>
The story of Black employment is straightforward and mirrors trends in the larger economy but with worse outcomes. Competition from outsourcing, non-us manufacturing, immigration, and automation has led blacks to shift to service jobs. Competition in technology and professional jobs has limited Black employment growth. Increased competition in professional and technology sectors has also affected Black employment and incomes. The lack of middle-class jobs and careers has limited income growth outside of healthcare, education, and government.
There are two big factors that limit Black employment success: increased competition, both globally and locally and continued structural barriers. US corporations have taken advantage of outsourcing, immigration and automation to boost profits. Network hiring dominates low wage industries and technical industries where language and cultural ties are important.
But not all factors are external to the Black community. We also have to look at internal factors that Black people can change that lead to better performance in the labor market. Black can pursue more technical skills and education, they can change geographic location and they can build networks like other groups. But the truth is that we live in a much more competitive world.
Notes:
We have lots of notes, please read them.
Another level of analysis concerns income, and status and prestige. And public service. And job security.
Sources and additional reading material
The problem of lower Black employment has been with us for a long time. The Black employment gap has been studies extensively over time with little to show for it.
US Census
Labor Force Statistics from the Current Population Survey — CPS annual tables which are used as the basis for this analysis.
More than a Century of Occupational Changes among African American Workers — They also do great analysis on interesting topics.
Center for Economic and Policy Research
The Three Labor Market Struggles Facing Black America – CEPR — Algernon Austin – Another masterful study of Black underemployment.
Black workers’ views and experiences in the U.S. labor force stand out in key ways — Pew
Why are employment rates so low among Black men? – Brookings – Harry Holzer
Economic Policy Institute
Black-White disparities in the labor market means we have to look at persistent discrimination and unequal bargaining power — By Valerie Wilson and William Darity Jr. — March 25, 2022. Oh, no, two of our favorites. The authors argue that we need a more complex definition of discrimination which factors in group power to preserve the existing status quo. Highly recommended.
Racial representation in professional occupations – oh no, Wilson, et al., again
Center for American Progress – Black workers have higher unemployment, lower wages, and worse prospects than other workers
McKinsey
McKinsey is a great source for for easy to an easy to understand discussion of the topic of Black under employment. There charts are great, the text is clear and easy to read and the conclusion clear. “Black workers have higher unemployment, lower wages, and worse prospects than other workers.” The Black Experience at Work — McKinsey
Pop Quiz
What is the current Black Unemployment rate
Why do Black dominate protective services?
Which fields would be greater “starter” fields for someone just starting out?
Which occupations and industry have the most discrimination against Black people ?
What would you tell your son or daughter to study in college ?