Michigan ranks third for highest Black unemployment rate, site says

(The Center Square) – The COVID-19 pandemic exacerbated Black Michiganders unemployment rate and to the third-highest in the nation at 13.9%, according to finder.com.

Michigan fares slightly better than Connecticut at 15.4% and Illinois at 17%.

In the first quarter of 2020, the statewide Black unemployment rate was 7%.

But when COVID-19 hit and Gov. Gretchen Whitmer mandated economic shutdowns for as long as eight months in some industries, that figure jumped fivefold to 35.5% in the second quarter of 2020, according to the Economic Policy Institute (EPI).

That outpaces the overall second quarter unemployment rate in Michigan, at 20%.

According to EPI, in the second quarter, Michigan witnessed the largest increase in Black unemployment since the first quarter of 2020 with an increase of 28.5 percentage points, followed by Ohio, up 14.4 percentage points, and Illinois, up 14 percentage points.

Patrick Cooney, the assistant director of economic mobility at University of Michigan Poverty Solutions, told The Center Square the COVID-19 crisis has exacerbated unemployment trends because it disproportionately impacted lower-wage service sector industries which tend to be where Black and Hispanic workers are disproportionately represented.

Many of those jobs haven’t returned yet because of COVID-19, Cooney said.

For roughly 10 years, Detroit has had the highest poverty rate of large cities nationwide. The city’s poverty rate had declined from nearly 40% in 2015 to just over 33% in 2018, Cooney’s research shows.

About 35% of Detroiters between the ages of 18 and 64 aren’t in the labor force, Cooney said, meaning they are neither employed nor actively looking for a job.

For comparison, the nonparticipation rate in similar large cities is Philadelphia (29%), Milwaukee (25%), Baltimore (25%), and St. Louis (21%).

Cooney uses data from the Detroit Metro Area Communities Study (DMACS) to find reliable local unemployment rate data.

In May, MDACS said unemployment rate was close to 50%. In October, it was almost 24% — basically 10 percentage points higher than the Bureau of Labor Statistics (BLS) estimate for Detroit, Cooney said. The Detroit BLS estimate was more than double the unemployment rate at 7.5% for the Metro Detroit area and statewide, Cooney said.

Cooney has researched unemployment barriers in Detroit pre-COVID-19 for those not in the labor force and found barriers including low levels of education, high disability reporting, lack of transportation, highest-in-the-nation auto insurance, and criminal records.

By analyzing jobs available through public jobs posting boards, Cooney found a large mismatch between the jobs available and the skills, attributes, and education level of unemployed residents.

For example, many entry-level transportation jobs required someone to have a car, have a license or have auto insurance.

Other entry-level jobs require state occupational licenses, which the vast majority of residents don’t have.

“There’s a double-sided barrier you could attack … by working employers to figure out if occupational licensures are really necessary to perform the task,” Cooney said. “And secondly, if they are necessary, can we get Detroiters access to some of the education that would allow them to get access to these jobs?”

Another big barrier was the digital knowledge gap.

An overwhelming amount of jobs required some form of computer knowledge, but roughly half of unemployed Detroiters reported they didn’t have a computer in the home.

A large amount of the jobs required a bachelor’s degree or some form of higher education, and the vast majority of Detroit’s unemployed had less than a college education.

Cooney said he was hopeful Michigan Reconnect and the Future for Frontliners program will benefit Detroiters’ odds in the labor market.

Poverty Solutions has worked with the Detroit and the Knight Foundation to expand access to computers and digital skills by rehabilitating computers discarded by companies to give to residents who might not be able to afford it otherwise.

Disclaimer: This content is distributed by The Center Square