The economy has begun to recover for many people – particularly for white and Hispanic Americans.
The share of white and Hispanic folks who were employed increased last month, after falling precipitously in April, according to the Bureau of Labor Statistics. Some 53.4% of whites and 52.8% of Hispanics were working last month, an increase of 1.5 percentage points or more for each compared to April.
Unemployment rates for both groups fell last month to 12.4% and 17.6%, respectively, down from 14.2% for whites and 18.9% for Hispanics in April, both record highs.
Employment also increased for black Americans, but it was less robust. For the second month in a row, fewer than half of black Americans were working, with only 49.6% of the population employed, up less than 1 percentage point from April. The last time such a small share were working was in 1983.
The unemployment rate for black Americans ticked up to 16.8% in May, slightly higher than the 16.7% rate last month. That’s because more joined the labor force in May, but not all got jobs, causing the unemployment rate to creep up. The rate ties the highest it was during the Great Recession.
The gap between the unemployment rates of white and black Americans had narrowed considerably in April because the job losses triggered by the outbreak affected such a wide swath of workers. Also, a disproportionate share of essential workers are black Americans, according to an analysis by the left-leaning Center for Economic and Policy Research. This is particularly true in the public transit, health care and trucking, warehouse and postal service industries.
Traditionally, the share of unemployed black Americans is twice or more that of white Americans, except during the Great Recession, when the gap was smaller.
Now, as businesses begin to rehire, the difference between the two rates widened again.
“People will tout this #JobsReport as good & that we are recovering. Yet, we are leaving Black people behind again – this is true by gender & age,” tweeted Olugbenga Ajilore, senior economist at the left-leaning Center for American Progress.
“As the economy recovers, African Americans just don’t get hired,” Ajilore told CNN, citing long-standing employment discrimination.
Meanwhile, the share of employed Asian Americans slipped slightly to 51.7% in May, while their unemployment rate rose to 15%, from 14.5% the prior month.
A larger share of both men and women were in the workforce last month and unemployment rates for both declined.
The jobless rate for adult women, who have been hit harder in this economic downturn, fell to 13.9% in May, down from 15.5% last month. The rate for adult men came in at 11.6%, compared to 13% in April.
Industries dominated by female workers – including restaurants, hospitality and retail – had been more affected by states requiring residents to stay home and nonessential businesses to close. These sectors, however, increased employment in May as states began to reopen.
Key to helping women return to employment will be safely reopening child care centers, summer camps and schools, said Willian Rodgers III, chief economist at the Heldrich Center for Workforce Development at Rutgers University.
“Getting this right can help speed up the recovery,” said Rodgers, who serves on New Jersey Governor Phil Murphy’s Restart and Recovery Commission, where the issue of child care is a focus.
Businesses start rehiring workers
Employment increased in many industries, except hotels, state and local governments, airlines, hospitals and several others. However, the hiring replaced only a fraction of the jobs lost in March and April.
Jobs at restaurants and bars increased by 1.4 million, accounting for about half of the total gain in May employment. This follows a combined decline of 6.1 million positions in March and April. Hotels, on the other hand, lost 148,000 positions in May, on top of the 1.1 million shed over the two prior months.
Still, the industry will continue to struggle until the coronavirus is under control and people’s behavior changes, said Madhavi Bokil, senior credit officer at Moody’s Investors Service.
“While this was a positive surprise, those jobs in leisure and hospitality sector will probably take time to come back and some of them may be permanently lost,” she said.
Many health care employers also started rehiring, adding 312,000 jobs last month. Employment in the sector had plummeted by 1.4 million positions in April, despite the pandemic that raged across the country. The industry was hurt badly by state mandates to postpone elective procedures and by patients’ fear of getting medical care during the outbreak.
Dental practices led the return, adding 245,000 jobs in May, after losing more than half a million positions in April. This week, 90% of dentist offices were open for elective care, compared to 3% in April, according to a report by the American Dental Association. Some 77% of offices are fully paying their staff, compared to 10% in April.
Physician offices and other health practitioners also added jobs, but nursing home facilities and hospitals continued to shed workers.
Retail trade added 368,000 jobs, following a decline of 2.3 million positions in April. It was driven by gains at clothing stores, auto dealers and general merchandise shops, though stores that sell electronics and auto parts downsized.
Manufacturing, professional services and financial activities all increased employment in May. Air transportation lost 50,000 jobs.
The largest layoffs, however, came in the government sector, which shed 585,000 jobs, on top of the 963,000 positions lost in April. Local government education was hit the hardest, with a decline in employment of 310,000, reflecting school closures.
The continued drop in state and local employment, however, may bolster governors’ and mayors’ pleas for more federal aid from Congress. State and local officials are facing massive tax revenue shortfalls and budget gaps that will not be reversed quickly. They have warned that they will have to lay off more public workers to balance their budgets by July 1, when the next fiscal year starts in most states.
