White Americans who don’t finish high school have better job prospects than black Americans who go to college

White Americans who don’t finish high school have better
job prospects than black Americans who go to college

by Sonali Kohli

The Great Recession might be over (in the US, at least) but it has left behind widened racial inequality in unemployment and wealth.

The unemployment rate for white Americans over 25 who had not finished high school was 9.7% in 2013. The unemployment rate for black Americans who went to college but didn’t graduate, meanwhile, was 10.5%. That’s an increase from 2007, before the recession:

This same trend can be seen among recent college graduates. Unemployment for black graduates between the ages of 22 and 27 was at 12.4% in 2013, compared to 5.6% for all college grads in that age range, according to a May report from the Center for Economic and Policy Research (pdf). The number was even lower for white college graduates in the age range—4.9%, the study’s co-author told the New York Times.

That’s a gap of 7.5 percentage points. Compare that to 2007, before the recession, when the gap still existed but was much smaller—1.4 percentage points. Black Americans with college degrees then had a 4.6% unemployment rate, while white Americans with undergraduate degrees were at 3.2%, the Times notes.

The recession doesn’t just affect people coming out of college. The median net worth of white households was 10 times that of black households’ median wealth in 2007, and 13 times the median wealth of black households in 2013, according to a recent Pew report.

Why are white Americans recovering from the recession so much better than black Americans?

The CEPR study points out that the recession made it difficult for all young people to get jobs, and racial prejudices have always skewed the labor market against black applicants in the US—employers are less likely to call back applicants with names that sound African American.

Additionally, black US graduates who do work are more likely to be overqualified than other Americans. Of the recent black college graduates (age 22-27) working in 2013, 55.9% did not require a four-year degree for their jobs, up from 45% in 2007. For all recent college grads, that number has hovered around 44% for the last decade, and was at 45% in 2013, according to the report.

And even black Americans who are wealthy recovered at a lower level than white Americans, at least in part because the two groups invest their money differently. Stocks, which white Americans invest in more so than black Americans, have done well since the recession ended, while black Americans tend to pursue more conservative investments like certificates of deposit, life insurance and savings bonds.

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