Payroll Gains Don't Reach Some Americans - WSJ

NEW YORK -- On the surface, recent job-growth figures appear to be a win-win for just about everybody. Not only did the economy create hundreds of thousands of new jobs between January and April -- a sharp turnaround from the same period a year earlier when the economy was losing jobs -- but the unemployment rate declined across a wide range of demographic groups. The unemployment rate for African-Americans, which historically has been much higher than the unemployment rate for whites, slid the sharpest of any group to 9.7% in April from 10.2% in March.

That is good news, right? Well, not entirely. A close look at the data shows that the employment situation for African-Americans varies sharply by educational level -- and far more so than for white Americans.

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Unemployment rates don't tell the entire story. The government only counts a person as unemployed if he or she doesn't have a job but is actively seeking one. People who have stopped looking for work -- including those who are too discouraged about their employment prospects to continue job hunting -- are not counted as unemployed. If discouraged workers were counted as unemployed, most economists believe that the unemployment rate for lower-skilled blacks would be considerably higher.

Less-educated black workers are caught in confusing and competing global and national trends that make it difficult for them to land jobs. Employment in the manufacturing sector -- once a haven for lower educated workers -- is moving jobs abroad to take advantage of less-expensive labor in countries like China. High levels of immigration, especially from Latin America, has flooded the market for low-end jobs with workers who are often willing to work for less money than native-born Americans. Racial discrimination continues to be a problem, and in an era of heightened security concerns, workers with even minor run-ins with the criminal-justice system are automatically denied employment. "Many of these factors are long-standing problems that have little to do with the recession," says Harry Holzer, a professor of public policy at Georgetown University.

But an even bigger impact could be this shift toward jobs that require stronger skills. As old economy industries move abroad or die out, new economy industries are picking up momentum. But many new economy jobs generally require specialized training that most high school dropouts don't have and can't get.

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Write to Kemba Dunham at kemba.dunham@wsj.com

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The top 1% took 70% of our National Income growth.

Top Heavy America. Top need more tax cuts.