National Data | Obamanomics Bad For Blacks — But They’re Voting For Him Anyway

By Edwin S. Rubenstein

09/27/2012

Recent polls show that black support for the first African-American president is as high as an incredible 100%. But looking at their workplace performance under Obama, it’s hard to avoid the conclusion that blacks are simply slaves to identity politics. Blacks have not only done badly under Obama — they’ve done worse that other racial groups.

Historically, black unemployment rates have been at multiples of other major racial and ethnic groups. This disparity usually widens during recessions, partly because workers with less education are particularly hard hit.

But black unemployment was slower to fall after the official end of this recession (June 2009). Result: the unemployment rate gap between blacks and other racial groups is larger now than it was when Barack Obama took office:

The latest employment report (August 2012) shows black unemployment at 14.1%, or fully 11 percentage points above the rate recorded at the start of the Obama Administration in January 2009. Over the same period the white unemployment rate increased by a mere 1.4%, while the Hispanic rate increased by 2.0%.

Since peaking at a catastrophic 16.7% in March 2010, the black unemployment rate fell to 14.1% in August — a reduction of 15.6%. By comparison, Hispanic and white unemployment rates have declined by 22.1% and 29.2%, respectively, from their Obama-era peaks.

At the start of the Obama years black unemployment rate was about 80% above the white rate; today the black rate is nearly double the white rate. This comes after a period, 2005 to 2009 — during which the racial gap narrowed.

Note that there is a disconnect between unemployment rates and employment. Although white unemployment rates are about the same today as on Mr. Obama’s inauguration day, the number of whites actually working is lower:

From January 2009 to August 2012:

• White employment declined 2.29 million, or by -2.13%
• Black employment rose 312,000, or by +2.02%
• Hispanic employment rose by 2.07 million, or by +10.44%

Arguably, the immediate economic impact of joblessness is less dire for whites than for other groups. White workers are generally older. Many are eligible for Social Security and can receive retirement benefits after losing their jobs. Others can live off their savings until jobs become available. Both these groups may have left the labor force involuntarily, but if they tell the Bureau of Labor Statics pollsters that they are not looking for work, they are not counted as “unemployed.”

This tends to suppress the white unemployment rate relative to those of other races and ethnicities.

The sorriest group of all: black teenagers (male and female). Their unemployment stood at an appalling 37.9% in August 2012 — up from 35.2% on Mr. Obama’s inauguration day. The number of black teenagers holding jobs declined by nearly 16% during this period.

Some 22.8% of white teenagers were unemployed in August 2012 — still shocking, but relatively modest by comparison with the black teenage rate. (Hispanic teen unemployment: 29%).

Part of the problem is unquestionably immigration, both legal and illegal. The observed employment pattern — minorities lagging whites, minority males lagging minority females, youth lagging their elders — is consistent with what you would expect if young immigrants, disproportionately male, were displacing their native-born counterparts.

Of course, immigration is not the only factor damaging black workplace performance. Outsourcing and the exodus of manufacturing jobs from American inner cities are contributing factors. But without immigration, the supply of unskilled labor would be lower relative to the demand, and wages would rise.

Black incomes have also been hit. The wage loss from immigration is likely to be larger for native-born blacks because they are some 67% more likely to be employed in occupations with large immigrant workforces than are native-born whites. (See The Impact of Immigration On American Workers, by Steven Camarota, Center for Immigration Studies, October 30, 2003.) Moreover, since black wages are already low, every dollar of wage loss represents a larger percentage reduction in their household income.

Amidst the sub-par Obama recovery of 2009 to 2011 (latest available year of income data), black household median annual income fell at an average rate of 2.9% per year, considerably more than the declines suffered by white and Hispanic households.

There have been times when blacks seemed to be gaining economic ground on whites (and, recently, Hispanics). The greatest gains came in the middle years of the last century, after the 1920s immigration cut-off. But in the 1980s and 1990s black household income increased significantly faster than that of whites and Hispanics. In the 1990s — admittedly from an admittedly low base — black income grew at nearly twice the rate of whites. This period, roughly coincident with the Clinton years, was marked by tough love welfare reform and stronger enforcement of immigration laws in the workplace, especially compared with the subsequent Bush bust. Both undoubtedly contributed to black income growth.

Black America’s wealth has also deteriorated under Obama, in line with its employment and income. The financial crisis was centered on housing which accounts for 60 percent of black wealth. “We may have lost more property in that than we did in slavery,” says William Barber, president of the North Carolina NAACP. [First Black President Can’t Help Blacks Stem Wealth Drop by David J. Lynch, Bloomberg, September 5, 2012]

Curiously, Obama has spent billions bailing out the very financial institutions that steered blacks into mortgages they could not afford. Black borrowers aren’t so lucky: almost one-quarter of African-American borrowers will lose their homes to foreclosure before the crisis ends, according to a November 2011 study by the Center for Responsible Lending, a nonprofit group that fights “predatory” consumer lending. [Lost Ground, 2011: Disparities in Mortgage Lending and Foreclosures (PDF)]

Black voters’ extraordinary loyalty to Obama can only be viewed as striking confirmation of Peter Brimelow’s observation that “race is destiny in American politics.”

Edwin S. Rubenstein is President of ESR Research Economic Consultants in Indianapolis.

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