Highlights:

  • Employment levels recovered for African Americans overall and by gender.
  • For Whites, the employment levels declined for men, increased for women and remained unchanged overall.
  • For Hispanics, the Index levels declined overall and by gender.
  • For all races, current Index values continued to be below their pre-pandemic levels.

Welch Index by Race May 2021

Introduction

The Welch Index for Race is a data analytics tool used by our labor economists to measure full-time equivalent employment for Hispanics, African Americans, and Whites after adjustment for population growth. An Index value of 100.0 indicates that this adjusted full-time equivalent employment level is the same as what it was in July 2019.

Any decrease (increase) in the Index value over a particular period implies that full-time equivalent employment level has decreased (increased) relative to the growth of the adult population during that period.

For example, over the past 12 months, the Index has increased 9.2 points for African Americans from 83.4 to 93.0.  In other words, the level of full-time equivalent employment for African Americans has increased at a rate 9.2% faster than the increase in the U.S. African American adult population over the past year.  For Whites the Index increased by 6.6 points and 10.8 points for Hispanics over the same period.

For all race groups, the bulk of the last one-year decline has occurred between January and April 2020. This is attributable to the onset of the COVID-19 crisis and related lockdown measures.

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Employment Levels Recover for African Americans and Hispanics

The Welch Index for Whites has largely remained unchanged since the start of the year. Their Index was at 95.4 points in January and February, then increased to 95.6 points in March and has remained at that level since March. When the pandemic hit, their employment levels declined by 13.9 points between January and April of 2020. The percent of this decline that has been recovered till date is close to 64%, similar to what it was in the previous two months.

The Index for African Americans has been steadily improving since February. Their employment levels improved by .3 points between February to March, by.8 points between March and April and by .4 points between April and May. With this steady improvement, African Americans have recovered close to 61% of the January-April 2020 decline in employment levels.  Still, a 6.3-point increase in index levels is required to return to the pre-pandemic January 2020 level of 99.7 points.

Index Race May 2021

With the exception of a decline in April of this year, the Index for Hispanics has been steadily improving. It has increased by 1.6 points compared to what it was at the start of this year and by .6 points compared to the previous month. Despite this generally continued recovery, the Index is still lower by 7.1 points compared to January 2020 level.

Employment Levels Decline for White Men and Increase for All Other Race-Gender Groups

The Index for White men declined by .2 points from 95 points in April to 94.8 points in May. For all other groups, the Index increased relative to what it was in the previous month.

Hispanic women experienced larger improvements compared to others. Their Index rose by 1.1 points between April and May. For Hispanic men, the Index rose by .5 points. For White women, the Index increased by .3 points over the same period. For African American men and women, the Index rose by .5 points and .3 points respectively.

For Whites, there has been no particular pattern of recovery. However, employment levels for African Americans, overall and by gender, have steadily improved since January of this year.

Of the 16.4-point decline in employment levels between January and April of last year, African American men have now managed to recover 66% of it till date. African American women on the other hand have recovered close to 56% of their initial January-April 2020 decline of 16.3 points.

Hispanic employment levels have also been steadily improving. Index levels for Hispanic men rose from 93.3 points in January of this year to 96.1 points in May. The Index for Hispanic women rose from 92.2 points to 93.2 points over the same period. Despite these improvements, the Index for the two groups-Hispanic men and women, would have to still rise by 6.6 points and 7.9 points to return to their pre-pandemic January levels of last year.

Underlying Factors Behind Employment Index Trends and Concluding Remarks

Our economic consulting experts find improvements in employment levels owing to increased vaccinations and reopening of businesses. Certain sectors such as Leisure and Hospitality and Education experienced larger job gains than others. However, overall hiring did not pick up at expected levels.

Technical Note: Full-time equivalent employment equals full-time employment plus one half of part-time employment from the BLS household survey (the Current Population Survey). The data reported for a given month is generally from the calendar week that contains the 12th day of the month. The Welch Index for race is based on individuals who are 20 years old and over. Seasonal effects for the share of workers employed in part-time jobs are removed in a regression framework using monthly indicator variables.

Sources:
May 2021 Jobs Report: U.S. Adds 559,000 to Payrolls – The New York Times (nytimes.com)