HARI SREENIVASAN: We wanted to follow up tonight on yesterday’s monthly unemployment report. Our focus this evening, a persistent problem; how unemployment affects young people and people of color disproportionately. Here to help unpack it is Nela Richardson, a Senior Economist from Bloomberg. So everyone pays attention to that top line 6.6 percent, when you kind of look under the hood though, it’s worse depending on where you look. So let’s look at race, for example. White Americans have an unemployment rate of about 5.7 percent and African Americans are more than twice that figure at 12.1 percent. Any primary causes?
NELA RICHARDSON: Well, you see that doubling of the unemployment rate between blacks and whites at every educational level and it’s particularly dramatic when you look at the youth population. There’s several reasons, Hari. One, it’s the fact that you know, blacks graduate at lower levels than white students do. So we know that college education is a huge factor in determining the level of unemployment, so that employment disparity is a big driver. Secondly, youth and African American youth tend to be employed in sectors that are very business cycle sensitive. So when the general economy is doing bad, that sector gets worse and it’s worse for this particular population.
HARI SREENIVASAN: So when we look at unemployment numbers by age it’s even worse, as you’re pointing out. Overall for workers from 16 to 19 that number is about 20.7 percent. Unpacking that number by race, young whites have an unemployment of 17.5 percent and as you’re hinting here, young African Americans are more than double that number at 38 percent. That’s an astounding number.
NELA RICHARDSON: It’s astounding. That’s nearly 40 percent for young black teenagers. Look, one in every four black youth ages 16 to 25 is unemployed right now. So it’s a huge problem, but it’s not only a problem for the present, it’s a problem for the future. How you start out as a young worker, how you enter the labor market, determines your future earnings potential. If you’re blocked out of opportunities now, you may be blocked out for a life time. It’s a dramatic situation. It definitely needs attention.
HARI SREENIVASAN: And it costs the government sort of in both ways — in that taxes that we don’t get from workers that are contributing to the economy and also social services that we’re providing to the unemployed.
NELA RICHARDSON: That’s true, but the good news is here is that this is a problem that’s fixable. We know that if you get a college degree your chances of finding a job increase dramatically. And so, one of the fixes is to increase financial aid, make it more available. But even for college graduates, when it comes to young black youth, you still see double the unemployment rate for other college graduates. So that’s when we have to match job training programs, perhaps paid internships, with college graduates to make sure that they have the same employment opportunities going forward.
HARI SREENIVASAN: And what about manufacturing jobs? How does this address the equation?
NELA RICHARDSON: You know there is this huge segment of the economy that’s actually taking off. And the one thing that young people have in their favor is that they’re much more mobile than older workers. They can move to where the jobs are and they can acquire skills that are needed for the economy of the future. So any program that we can get to get people attached to the labor market by growing skills and skill development within young people, can only help their future employment picture going forward.
HARI SREENIVASAN: All right, Nela Richardson a Senior Economist from Bloomberg. Thanks so much for joining us.
NELA RICHARDSON: Thank you.