The December unemployment rate for the nation as a whole was 7.2 percent. This rate is a 16-year high. Rightly, many people view this level of unemployment as a national emergency. In December the black unemployment rate was 11.9 percent. If 7.2 percent is an emergency, what should we call 11.9 percent?
Since 1972, when the Bureau of Labor Statistics began tracking the black unemployment rate, only once has the black unemployment rate been lower than 7.2 percent—only once in almost 40 years. In March of 2000 the black unemployment rate was 7 percent, the lowest level on record, and still in emergency territory by my measure. In the great economic year of 2000, the economic condition of black America was still critical by national standards.
The good economy days of 2000 are long gone. Without an effective federal stimulus, the Economic Policy Institute, an organization I work for, forecasts that by next year the national unemployment rate will reach 10.2 percent and the black unemployment rate 18.2 percent. For black teens, the projected unemployment rate is 55.7 percent.
The last time blacks faced such a dire jobs crisis was in the early 1980s when the country experienced back-to-back recessions in 1980 and 1981. The black poverty rate spiked upwards. The crack cocaine economy and its attendant deaths and disorder spread through black communities. By the end of the 1980s, teen pregnancies increased. Black educational progress stalled.
Will an 18.2 percent black unemployment rate produce similar results in the 2010s? Let’s not try to find out.
President-elect Obama’s economic recovery plan so far looks good, and it just might keep us from returning to the unemployment rates of the early 1980s. Even if we were not in the middle of a deep recession, we would need many of the investments he is calling for to strengthen the U.S. economy. In a sense, it is great that the recession might force us to make many of the infrastructure and other investments that we have been putting off.
Although some people are shocked at the price tag of the economic recovery plan, the real worry from my standpoint is whether the plan is big enough. According to the projections [PDF] from Obama’s economic advisors, with the stimulus, the national unemployment rate will be about 8 percent in 2009. That level of unemployment would translate to about a 14 percent black unemployment rate. That rate of unemployment still paints an ugly economic picture for black America.
Further, the projections from Obama’s advisors might be too optimistic. Without the stimulus, they see the national unemployment rate peaking at 9 percent. My organization and others expect the peak without stimulus to be higher. If the Obama estimate is too low, even with the stimulus we could experience a black unemployment rate above 14 percent.
In the best economic times, black America needs a recovery and reinvestment plan. Faced with one of the worst economic downturns since the Great Depression, blacks desperately need it.