(Why) Are African Americans and Latinos underrepresented among UI beneficiaries? An exploratory look

Andrew Grant-ThomasDeputy Director, Kirwan Institute for the Study of Race and Ethnicity

Annual Conference NASI- “Meeting Today's Challenges in Social Security, Health Reform, and Unemployment InsuranceJanuary 27-28, 2011 National Press Club, Washington DC

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Blacks and Latinos have endured especially high unemployment during the latest recession

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Blacks and Latinos also are overrepresented among the long-term unemployed (Dec 2010)

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0

5

10

15

20

25

BLACKS LATINOS ASIAN AMERICANS

% of Labor Force

% of Unemployed

% of Long-term Unemployed (52 weeks+)

Source: Bureau of Labor Statistics, Current Population Survey

The relationship between race/ethnicity and long-term unemployment holds over time

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However, Blacks seem to be somewhat underrepresented and Latinos very underrepresented among UI recipients

5Source: BLS Local Area Employment Statistics and DOL Employment and Training Administration, Characteristics of the Insured

Unemployed for Calendar Year 2009; BLS Preliminary 2009 Data on Employment Status by State and Demographic Group

41.0%42.8%

39.1%

32.4%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

Overall White Black Latino

There are 15 states for which we have fairly good race/ethnicity data on UI recipients in 2009. The unemployed in these states include 2.9 million whites, 1.1 million African Americans, and 360,000 Latinos.

Recipiency rates by race/ethnicity across 15 states, 2009

There is significant variation in relative recipiency rates by race/ethnicity at the state level

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Recipiency rates by race/ethnicity in most populous of the 15 states, 2009

Source: DOL Employment and Training Administration, Characteristics of the Insured Unemployed for Calendar Year 2009; BLS Preliminary 2009 Data on Employment Status by State and Demographic Group

0%

10%

20%

30%

40%

50%

60%

70%

Ohio Maryland Georgia Illinois North Carolina Pennsylvania Tennessee

White recipiency rate

Black recipiency rate

Latino recipiency rate

Underrepresentation of Blacks/Latinos in UI worrisome because their families are very vulnerable financially

Insight CCED, "Social Security at 75: Building Economic Security, Closing the Racial Wealth Gap“ webinar. June 17, 2010. 7

Even “high income” African American families can ill afford missed paychecks

8Source: Institute on Assets and Social Policy, “The Racial Wealth Gap Increases Fourfold.” May 2010.

Possible explanations: It may be that…

1. Blacks and Latinos more likely to live/work in low-coverage states (geographic distribution/bad-luck )

2. Blacks and Latinos less likely to meet state eligibility criteria (worker status issue/bad luck)

3. Disparities by race/ethnicity are not coincidental; the Unemployment Insurance program is “racialized” in design and by the role of bureaucratic discretion in its implementation

4. Unemployed Blacks/Latinos less likely to apply for UI

5. Undocumented immigrants more likely to count among the unemployed than to receive UI benefits

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1. Relative to Whites, Blacks and Latino populations are unfavorably distributed in re state UI recipiency rates

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0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

White population Black population Latino population Entire population

High

Medium

Low

27%33%

32%

35%

37%

36%

27%

20%

53%

32%

31%

38%

Source: U.S. Census Bureau, "Estimates of the Resident Population by Race and Hispanic Origin for the United States and States: July 1, 2008 (SC-EST2008-04),“ and ProPublica, “Is Your State's Unemployment System in Danger? November 2009/ http://www.propublica.org/special/is-your-states-unemployment-system-in-danger-603

Distribution of US population by race/ethnicity and state recipiency rates –low (20%-41%), medium (41%-50%), and high (51%-69%) – in November 2009

2. Blacks and Latinos overrepresented among unemployed workers most likely to be ineligible

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Among unemployed, African Americans less likely than whites to be “job losers” in 4th quarter, 2010 58% and Blacks and 64% of whites were “job losers”

(vs. new entrants, reentrants, etc) Blacks and Latinos disproportionately low-income. The EPI

estimated that in 2009: Blacks were 11% of the workforce, but 18% of workers

affected minimum wage increase to $7.25/hr. Hispanics were 14% of the workforce and 19% of

workers affected by increase.

3. Is UI racialized in design and through the role of discretion in its implementation?

If so, one would expect, for example:

A positive association between recipiency rates and proportion African American and/or Latino

A positive association between wrongful denial of UI benefits and proportion Black and/or Latino

Relatively favorable results to African Americans and Latinos in states that rely more on automation

Greater denial of African Americans and Latinos than of similarly situated White claimants

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Black-White Implicit Association Test Results

27%

27%

16%

17%

6%

4%

2%

0% 5% 10% 15% 20% 25% 30%

Strong preference for Whites

Moderate preference for Whites

Slight preference for Whites

Little to no preference

Slight preference for Blacks

Moderate preference for Blacks

Strong preference for Blacks

N = 732,881 13

A few proven behavioral implications of implicit bias

In “shooter game,” mistakes follow clear pattern: people shoot more unarmed blacks and fail to shoot armed whites

Doctors’ implicit racial attitudes unequal treatment for Latinos and Blacks compared to Whites

Resumes with “white-sounding” names (Emily, Greg, Jill, Todd) receive 50% more call-backs than those with “black-sounding” (Jamaal, Latoya, Tyrone, Lakesha) names.

Neighborhoods with White-only residents evaluated much more favorably than same neighborhoods with black residents or racially mixed residents

More or less implicit bias corresponds to comfort level and body language in interracial interactions

“Emergency Treatment May Only Be Skin Deep.” Science Daily 11 Aug. 200714

Back to UI -- states with higher proportions of Black Americans do also have lower coverage rates

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0

0.1

0.2

0.3

0.4

0.5

0.6

0.000 0.100 0.200 0.300 0.400 0.500 0.600

IUR/

TUR

Reci

pien

cy

Pct. of State Population African American

Black state population shares x recipiency rates (2010) (Correlation = -0.40)

Source: http://www.doleta.gov/unemploy/chartbook/chartrpt.cfm

Same is true for Latinos, but the relation-ship is weaker than for African Americans

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0

0.1

0.2

0.3

0.4

0.5

0.6

0.000 0.050 0.100 0.150 0.200 0.250

IUR/

TUR

Reci

pien

cy

Pct. of State Population Latino

Latino state population shares x recipiency rate (2010) (Correlation = -0.16)

Source: http://www.doleta.gov/unemploy/chartbook/chartrpt.cfm

For Whites, the reverse is true: the greater the White proportion, the higher the coverage rate

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0.000

0.100

0.200

0.300

0.400

0.500

0.600

0.000 0.200 0.400 0.600 0.800 1.000 1.200

IUR/

TUR

Reci

pien

cy

Pct. of State Population White

White population shares & recipiency rates (2010)(Correlation = 0.22)

Source: http://www.doleta.gov/unemploy/chartbook/chartrpt.cfm

The distribution of the black population nationally has not changed dramatically between 1930 and 2000

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2000

1930

State shares of B’s/L’s were positively associated with improper monetary denial rates, not with separation/non-separation errors

19Source: DOL Employment and Training Administration, Benefit Accuracy Measurement, Denied Claims Accuracy Report 2009. http://www.ows.doleta.gov/unemploy/bam/2009/Denied_Claims_Accuracy_Rates_CY_2009.xls

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

0.0 10.0 20.0 30.0 40.0 50.0 60.0

Impr

oper

mon

etar

y den

ial r

ates

Percent of state population that is Black and Latino

(Correlation = .27)

Potential ResponsesTo possibility of racial/ethnic bias: Make race/ethnicity data collection mandatory

for all UI applicants Conduct audit tests for bias in claims

processing Reduce bureaucratic discretion through still-

greater use of automation Offer de-biasing training

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Potential Responses (cont.)

Expanding access and speeding transfer: Support wider state adoption of modernization

reforms Require employers to distribute UI information

to displaced workers Change the benefit calculation formula to aid

low-income workers Allow workers to bank their benefits over time

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KirwanInstituteon:

www.race-talk.org