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Beyond BLS

Beyond BLS briefly summarizes articles, reports, working papers, and other works published outside BLS on broad topics of interest to MLR readers.

November 2023

In the race from COVID-19, who wins?

Summary written by: Maya B. Brandon

Before the COVID-19 pandemic hit, labor market inequalities across racial groups had been under the microscope, and for some workers, the recovery from the global shutdown has been slow. The pandemic and its recovery period have since provided another opportunity for investigating these inequalities.

In “Labor, race, and COVID-19 (Federal Reserve Bank of Philadelphia, first quarter 2023),” Andrew Herzberg, Economic Advisor and Economist for the Federal Reserve Bank of Philadelphia, uses Current Population Survey data from the U.S. Bureau of Labor Statistics to examine the effects of the pandemic across racial groups. He compares the unemployment rate, labor force participation, and employment-to-population ratio data from the pandemic with data from previous recessions to determine how Black and Latino workers experienced the labor market during periods of economic downturn compared with the entire labor market.

The United States is no stranger to economic downturns. For the 40 years before the pandemic, Black and Latino workers experienced a higher unemployment rate than the national rate, on average, while the rate of White and Asian workers trended with the national rate. The pandemic period did not veer from this trend. Notably, the pandemic interrupted the expansion and recovery efforts experienced after the Great Recession of 2007 to 2009.

Not long after the onset of the pandemic, the unemployment rate quickly rose while the labor force participation rate declined. The unemployment rate for the total labor market spiked, reaching 14.7 percent, while the rates for Black and Latino workers reached 16.6 percent and 18.8 percent, respectively. By April 2022, however, the total unemployment rate fell to 3.6 percent, prepandemic level. The total labor force participation rate then declined by 2.94 percentage points. Much like the unemployment rate, the labor force participation rates for Black and Latino workers declined much more rapidly, 4.01 percent and 3.62 percent, respectively. These changes in the unemployment and labor force participation rates contributed to a 9.47-percentage point reduction in the total employment-to-population ratio. Black workers experienced a reduction of 9.93 percentage points, and Latino workers experienced a reduction of 12.66 points.

The speed of recovery after the pandemic has also varied between racial groups. By calculating the fraction of the initial data of April 2020, Herzberg measures the speed of recovery. He finds that unemployment rates of Black and Latino workers today are recovering more slowly than the total labor market, and their labor force participation rates are recovering more quickly. The employment-to-population ratio for Latino workers is largely mirroring that of the total labor force, whereas Black workers are experiencing a slower recovery in this category.

Herzberg finds that Black and Latino workers experienced the labor market differently than the total workforce during both the COVID-19 pandemic and the recovery period. He notes that because the pandemic has highlighted the inequalities between races, it has provided another opportunity for others to examine how labor market changes affect workers of different demographics.