Black workers hit hard by COVID-19 economy

The Butler County Microenterprise and Microloan program helps low- and moderate-income individuals learn how to start a new business and gives them the opportunity to apply for small business loans.
The Butler County Microenterprise and Microloan program helps low- and moderate-income individuals learn how to start a new business and gives them the opportunity to apply for small business loans.

Black workers account for a growing share of new jobless claims across the Dayton region and state, which some researchers and groups say is a concerning sign that the ongoing economic fallout from the coronavirus increasingly is hurting minority communities.

Black unemployment remains much higher than white unemployment, and Black workers tend to have lower wages and less financial security and wealth than their white counterparts and face discrimination in the workplace and job market, said Zach Schiller, research director for liberal-leaning Policy Matters Ohio.

“That’s bad news and it’s reflective of a long history of racial discrimination, which we are still living with, he said.”

Also in June, Black residents filed about 22.9% of new claims seeking unemployment compensation in Butler, Champaign, Clark, Greene, Miami, Montgomery and Warren counties, according to this newspaper’s analysis of state data.

Black workers in the seven-county region submitted 18.6% of first-time unemployment applications in May and 15.1% of new claims in April.

The share of jobless workers in Montgomery County seeking benefits who are Black increased 6.8 percentage points in June, rising to 39.2%. The Census says that 21.5% of Montgomery County’s population is Black.

This excludes claims where no race was specified. The number of new claims has been declining for workers of all races and ethnicities, but remains at an elevated level.

Montgomery County Administrator Michael Colbert said the county expected the pandemic to have a negative impact on low-income and minority communities.

Colbert said the county made budget adjustments during the crisis but preserved funding for “key” strategic priorities including workforce and community development.

The county launched a new mobile workforce program to connect citizens with economic opportunity, and it also will open a new Westown Career and Innovation Center in West Dayton, he said.

“Making the right investment now will help ensure a more equitable future for our community,” he said.

Why is this happening?

Black workers tend to be employed in industries that have been harder hit by COVID-19 job losses, said Bruce Weinberg, professor of economics and public administration at the Ohio State University.

Black workers also are more likely to work in jobs that cannot be done remotely, he said, which is a big disadvantage when record numbers of people are having to work from home because of the virus.

Some industry sectors with sizable shares of Black workers include air transportation (20% Black), taxi and limo services (30%) and accommodation (17.9%), according to the U.S. Bureau of Labor Statistics.

Demand for all of these services fell off a cliff during the outbreak. Most business and leisure trips were cancelled, and many hotels and motels laid off staff since so many of their rooms were empty.

This includes the Crowne Plaza Dayton, which months ago announced it was laying off about 130 employees.

Last month, PSA Airlines and Air Wisconsin Airlines at the Dayton International Airport announced they were laying off 229 and 47 workers, respectively.

Weinberg said his research found that Black workers are more likely to lose jobs during this crisis, which could be interpreted as discrimination, and they are less likely to be re-employed after a job loss.

Governments employ a sizable share of Black workers, and unless federal lawmakers soon approve rescue funding, many cities and other jurisdictions across the Dayton area, state and country likely will have to lay off workers, said Schiller, with Policy Matters Ohio.

Black workers account for 21.4% of general government and support employees, federal labor data show.

Federal lawmakers should extend the enhanced unemployment benefits for many reasons, including that it will help Black workers and their families at a critical time, Schiller said.

The extra $600 per week expired at the end of July.

Schiller said the enhanced payments were masking the true economic pain of the massive layoffs from this crisis. When they are gone, Ohioans are going to struggle to pay their bills and will have to cut spending, he said.

Jobless rate

The U.S. Black unemployment rate skyrocketed during the pandemic, after recently falling to historically low levels.

Black unemployment peaked at 16.8% in May, before declining slightly to 15.4% in June, the U.S. Bureau of Labor Statistics said. It was 5.8% in February.

White unemployment peaked at 14.2% in April, before dropping to 10.1% in June, the federal data show. White unemployment was 3.1% in February.

In Ohio, the Black unemployment rate was 6.7% last year, compared to 4% for white Ohio workers, according to the bureau’s data.

Black Americans have a less of a financial cushion when emergencies arise, like a job loss.

They on average have less savings and wealth than their white counterparts. They also are far less likely to be homeowners.

Black households are less likely to have multiple earners in their homes, meaning a job loss or wage reduction can be devastating, according to the left-leaning Economic Policy Institute.

Montgomery County Commissioner Judy Dodge said the county commission has decided to make strategic financial investments in historically underserved communities during these difficult economic times.

“Each and every one of our citizens deserves equal access to services and economic opportunity,” she said.

Workforce investments include $10,000 loans for businesses, including sole proprietorships, impacted by the pandemic. The county has $40 million in federal CARES Act funds available.

The county also is offering grants worth up to $15,000 for job training and job search help.

The county is spending $500,000 for a workforce mobile unit to bring workforce and career services to low-income areas. The Westown Career and Innovation Center will offer career, job training and job placement assistance.