The newly-released February jobs report showed the unemployment rate for Black workers at 6.6%, a slight decrease from the previous month. But before Black workers have had a real chance to recover, we could soon see that number go back up as the Federal Reserve makes plans to raise interest rates this month, and again in June, in order to curb inflation rates.
The Federal Reserve’s charge is to maintain both price stability and maximum employment. When prices for goods and services are inflated, as they are now, their typical response is to slow down the economy by raising interest rates.
But they should be cautious about how much they slow down the economy if unemployment is still high. While there are no hard and fast definitions for “maximum” employment, the Federal Reserve has signaled they feel we’ve reached it. With a 3.8% national rate of unemployment, that thinking could be excused. But that’s not the whole story.
In the past few months, the unemployment rates for white workers have been near or below what they were right before the pandemic began. Unemployment rates are 3.0% for white men and 3.1% for white women. But Black workers are still unemployed at a rate approximately twice that of white workers – 6.4% for Black men and 6.1% for Black women.
This Black-white unemployment gap has been the reality for Black workers for as long as we’ve measured unemployment by race. Chirag and Dorian lay out some of that history and the choice we have now to stop the trend:
Our federal monetary policy is structurally racist in how it’s applied, as it doesn’t take unemployment rates for Black workers into consideration when it makes decisions on interest rates. Essentially, the Federal Reserve is willing to slow down the economy and throw Black workers under the bus for inflation caused in large part by corporations.
Chirag and Dorian explain:
The impact of inflation is real and has dominated headlines. The sources of inflation, however, have almost nothing to do with wages or even more broadly, how much people are spending on goods and services. Inflated prices right now have a lot more to do with pandemic-induced supply chain disruptions and corporate power and greed. Even Jerome Powell, the Chair of the Federal Reserve, says that corporations with outsized market power are “Raising prices because they can.”
Without doubt, Black workers who are experiencing the highest rates of unemployment are also harmed by inflation. However, raising interest rates in this case only slows down the economy, throws more people out of work, and adds insult to injury for Black workers still also facing a jobs crisis. And it does nothing to put the onus on corporations who are causing a large part of the problem by bumping up the price of necessities like groceries and diapers just to profit off our pain.
The Federal Reserve must take its mandate to reach maximum employment seriously – and their definition of that should be that all workers, including Black workers, who want a good, stable job are able to get one.
But they won’t prioritize the interests of Black workers unless they hear from us. Chirag and Dorian break down what ordinary people can do to stop the Federal Reserve from raising interest rates while Black workers are still suffering high employment:
They point out that the goal of reaching Black full employment is not up to the Federal Reserve alone, and there are other things the government needs to do to ensure more equity in the pandemic recovery.
The expanded child tax credit, for example, is one policy that helped families pay their bills and save a little on the side. That cushion allowed many people, for the first time, to leave their low-paying, no-benefits, no dignity jobs to find better work. That is the type of worker power that groups like the Black Freedom Collective are after.
But policies like the expanded child tax credit, as well as expanded UI benefits, eviction moratoriums, and pausing student loan payments, were all made temporary. Longer term solutions like affordable child care and housing, paid family leave, and a permanent expanded child tax credit were put on a pause as Senators Manchin and Sinema and the entirety of the Republican party stalled the Build Back Better Act.
We cannot return to the status quo of economic policies that put people of color, especially Black people, at a disadvantage before they even get a foot out the door. And one way to ensure that doesn’t happen is to make the inequality of this recovery visible. We can start by telling the Federal Reserve not to raise interest rates and punish Black workers for a problem largely caused by corporate greed.