Points of View

Assessing Racial Disparities in West Michigan's Labor Market

Assessing Racial Disparities in West Michigan's Labor Market

Alex Andrews

The unemployment rate, labor force participation rate, and postsecondary attainment rate within a region are among the most pervasive indicators of economic prosperity utilized today. Each metric referenced above has continued to improve in West Michigan since the end of the Great Recession in 2009, but it is important to note that such progress has not been distributed evenly among all members of our community. Pockets of high unemployment, low labor force participation, and low adult educational attainment persisted across racial and ethnic subpopulations within West Michigan as recently as 2019. These disparities have likely worsened as a result of the COVID-19 pandemic, with Black and Hispanic workers bearing the brunt of layoffs, pay cuts, and labor force separations that occurred since March of last year, but we don’t yet have data to determine the long-term impacts of the pandemic on these disparities.

 

Quantifying Employment Gaps

With an unemployment rate of 3.3 percent in 2019, a marked improvement from the 12.5 percent unemployment observed for the region in 2009, it might appear that all West Michigan residents are thriving. While this may seem true in the aggregate, the rate of unemployment within the region varies substantially across racial and ethnic subpopulations, with additional gaps resulting from gender and age disparities. Just 3.8 percent of West Michigan labor force participants who identified as White in 2019 were considered unemployed, while unemployment among labor force participants identifying as Black or African American remained over three times as high, at 12.3 percent. This would equate to an unemployment rate gap of 8.5 percent between White and Black residents of West Michigan just two years ago, which significantly exceeds the respective gap of 2.5 percent associated with Hispanic or Latino (of any race) residentswith an unemployment rate of 6.3 percent that year.

 

While racial and ethnic disparities across employment may come as no surprise, considering the existing body of research on racial and ethnic unemployment rate gaps, it is notable that such disparities show evidence of narrowing in West Michigan. The unemployment rate gap between White and Black residents peaked at 13.5 percent in 2014, while the comparable gap associated with Hispanic residents peaked at 4.9 percent in 2012. Considering the size of the respective gaps in 2019, this would reflect a narrowing of 5 percent to the unemployment rate gap between White and Black residents of West Michigan over this 5-year timespan. Additionally, this would equate to a 7-year improvement of 2.4 percent to the unemployment rate gap between White and Hispanic residents of West Michigan. Although progress has been gradual across a region with over 1.6 million residents, the narrowing of these employment gaps has emerged despite the countervailing forces presented by increased labor force participation among Black and Hispanic residents and decreased participation among White residents observed over the respective time periods.

 

Quantifying Gaps in Labor Force Participation

While it’s clear that race and ethnicity play a role in determining the unemployment rate of a population, it would appear that substantial gaps also persist among West Michigan residents with respect to labor force participation, or the portion of the total subpopulation engaged in the labor force (either employed, or unemployed and actively seeking work). In West Michigan, 64.1 percent of residents who identified as White in 2019 were actively involved in the labor force, compared to 60.5 percent for Black and 72.6 percent for Hispanic residents. This would equate to a gap of 3.6 percent between the labor force participation rates of White and Black residents of West Michigan just two years ago, while the rate associated with Hispanic residents exceeded White residents by 8.5 percent.

 

Comparing 2019 labor force participation rates to the same rates observed across racial and ethnic subpopulations within West Michigan in 2010 would indicate that racial and ethnic gaps in labor force participation have generally followed the same narrowing trend observed across unemployment. Indeed, West Michigan’s labor force participation rate gap between White and Black residents peaked at 9.2 percent in 2011, reflecting an 8-year improvement of 5.6 percent to achieve the region’s current gap of 3.6 percent. However, it would appear this gap has widened when comparing the labor force participation rates of White residents to that of the Hispanic community, with the latter subpopulation yielding the highest labor force participation rate of any racial or ethnic community within West Michigan as recently as 2019 (72.6%). The respective gap achieved its lowest point in 2014, at 5.6 percent, at the same time when labor force participation among West Michigan’s Hispanic residents plummeted to a low of 69.7 percent. Mirroring the positive recovery in labor force participation observed among Hispanic residents over the 5-year duration since 2014, while also capturing the inverse trend observed for participation among White residents, this gap has steadily increased in West Michigan and now exceeds the level recorded in 2010 by over 2.6 percent (5.9% gap, 2010).

 

Future Data Topics

Have you been enjoying these “Data Points” blogs? Are you interested in other data? Let us know what topics you’d like to know more about on our Twitter, LinkedIn, or Facebook ! We’d like to crunch some numbers that you’re interested in.

SUBSCRIBE