Highlights:

  • Employment levels recover for African Americans, overall and by gender.
  • For Whites, the employment levels increase for men, declined for women and remain unchanged overall.
  • For Hispanics, the Index levels decline overall and for women, but increase for men.
  • For all races, current Index values continue to be below their pre-pandemic levels.

Welch Economists analyze employment levels by race

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.

Employment Index by race and genderAny 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 9.6 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 9.6% faster than the increase in the U.S. African American adult population over the past year.  For Whites the Index increased by 8.9 points and 12.1 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.

Welch Consulting offers  data consulting services to help employers analyze and learn from large and complex data.

Employment Levels Recover for African Americans and Decline for Hispanics

The Welch Index for Whites remained unchanged between January and February of this year, then increased modestly by .2 points in March and once again remained unchanged at 95.6 points in April.  Whites have till date recovered 64% of the initial 13.9-point decline that they experienced between January and April of 2020.

The Index for African Americans has been steadily improving since February. Their employment levels improved by .3 points between February to March and by.8 points between March and April. The percentage of the of the initial 16.3-point decline that African Americans have recovered increased from 53% in March to 58% in April.

Employment Index by Race Apr-2021

The Index for Hispanics had been steadily improving since December of last year. However, this pattern experienced a setback with a .5-point decline in employment levels from 94.7 points in March to 94.5 points in April. Hispanics have recovered close to 60% of the initial 19.9 points decline that they experienced between January to April of last year. This is lower by 3 percentage points compared to the recovery rate of 63% in March.

To return to their pre-pandemic January 2020 levels, The Index for Whites, African Americans and Hispanics would need to increase by 5 points, 6.7 points and 7.8 points respectively.

Employment Levels Decline for Hispanic and White Women

For the first time this year, the Welch Index for White men saw an improvement. After declining by .1 points in March compared to the previous two months, their Index increased by .3 points from 94.7 points in March to 95 points in April. On the other hand, the Index for White women declined for the first time this year by .4 points from 96.8 points in March to 96.4 points in April.  The improvement needed to return to what the pre-pandemic employment levels were at the start of last year, Index for White men and women would have to increase by 5 points and 5.1 points respectively.

The African American Index levels have continued to largely follow a similar pattern this year for both men and women. The Index levels increased in April for both genders of this group. For men, the Index increased by .2 points from 92.4 points in March to 92.6 points in April. For women, the Index increased by a larger margin of 1.4 points from 91.9 points to March to 93.3 points in April. With this recovery, African American men have recovered about 63.4% of last year’s decline in employment levels when the pandemic hit. For women, the percentage recovered till date is lower at about 54.6%.

Employment Index by Race and Gender Apr-2021
Employment levels for Hispanic men have continuously improved in 2021. Their Index rose by .1 point in February, by .2 points in March and by .5 points in April compared to the previous month. As of April, their Index stood at 95.7 points- 11 points higher than the what the Index value was same time last year in April but still lower by 7 points compared to what the pre-pandemic Index value was in January of last year.

The Welch Index for Hispanic women declined by 1.8 points from 93.9 points to 92.1 points between March and April thereby partially offsetting the 2-point recovery in job levels that they experienced between February and March of this year. The Index for Hispanic women had declined by a dramatic 21.6 points in the initial months of 2020 of which they have recovered close to 58% while Hispanic men have recovered close to 62% of their initial decline.

Underlying Factors Behind Employment Index Trends and Concluding Remarks

Our economic consulting experts find that Leisure and Hospitality saw an uptick in employment while other sectors such as Manufacturing and Retail experienced a decline in the same. The inconsistent pattern in employment by race can be explained by the fact that different racial groups are situated differently across these different sectors.

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.

 

References:
Ahearn, T. May 7, 2021. April 2021 Jobs Report Shows 266,000 Jobs Added in COVID-19 Recovery. Employment Screening Resources. https://www.esrcheck.com/wordpress/2021/05/07/april-2021-jobs-report/