PI Original Ellyn Fortino Thursday April 16th, 2015, 5:18pm

Report: Illinois Black Unemployment Rate Expected To Fall In 2015, But Still At 'Crisis Level'

Research from the Economic Policy Institute shows Illinois is one of only two U.S. states expected to see "significant reductions" in African-American unemployment levels throughout 2015. Still, African-American jobless rates in Illinois and nationwide are still far higher than where they should be, EPI's report argues.

recent report by the Economic Policy Institute (EPI) shows Illinois is one of only two U.S. states expected to see "significant reductions" in African-American unemployment levels throughout 2015.

In Illinois, the African-American unemployment rate is projected to hit 11.4 percent by the fourth quarter of 2015, according to the research. That would represent a 2.2 percentage-point decline from one year earlier, when the jobless rate among African Americans in Illinois was 13.6 percent, followed by Hispanics at 7.7 percent, Asians at 5.2 percent and whites at 4.8 percent.

By the end of 2015, Illinois' African-American unemployment rate is expected to be nearly 1 percentage point lower than the pre-recession rate of 12.2 percent during the fourth quarter of 2007.

EPI's report examines state and national unemployment rates by race for the fourth quarters of 2014 and 2007, the year before the Great Recession. The Washington, D.C. think tank includes projections for 2015 African-American unemployment levels.

African-American jobless rates have thus far returned to pre-recession levels in only two states, Connecticut and South Carolina. The report examined a total of 30 states for which data was available. In all, 15 U.S. states, including Illinois, saw significant declines in African-American unemployment levels between 2013 and 2014.

Last year, Illinois' annual African-American unemployment rate was 14.7 percent. Between 2013 and 2014, the annual jobless rate among African Americans in Illinois declined 2.6 percentage points.

Going forward, Illinois and California are the only two states expected to see "statistically significant" improvements in African-American unemployment levels by the end of 2015, according to the report.

"Five years into recovery from the Great Recession, unemployment rates are finally nearing their 2007 levels, but the pace of recovery varies by state for different racial and ethnic groups," the report reads. "In the fourth quarter of 2014, the national white and Hispanic unemployment rates were each within 1 percentage point of pre-recession levels while the black unemployment rate was 2.4 percentage points higher than it was at the end of 2007."

Nationwide, the unemployment rate in the fourth quarter of 2014 was 11 percent among African Americans, 6.7 percent among Hispanics, 4.5 percent among whites and 4.4 percent among Asians.

The national African-American jobless rate could dip to 10.4 percent by the end of 2015, the research shows. But even at 10.4 percent, the national unemployment rate among African Americans would still be almost 2 percentage points above the pre-recession level of 8.6 percent at the end of 2007.

"The unemployment rate for black communities is at a crisis level, even as the economy gets closer and closer to a full recovery," said report author Valerie Wilson, EPI's director of the Program on Race, Ethnicity, and the Economy. "Even before the Great Recession, black unemployment has consistently been twice as high as white unemployment. To address this problem, we need to look beyond simply returning to the pre-recession status quo and implement policies aimed at ensuring that everyone who is willing and able to work has a job."

Full Employment's Impact On African Americans

In a separate report issued last month, Wilson argues that reaching full employment will disproportionately help African Americans in terms of employment and wage growth. According to her research, a 1 percentage-point change in the national jobless rate results in a nearly 2 percentage-point change for African Americans.

More specifically, "a 1 percentage-point decline in the national unemployment rate means that roughly 200,000 fewer African American workers will be unemployed," Wilson writes.

The report notes that between 1995 and 2000, a five-year period during which the annual jobless rate declined to 4 percent, "the difference between the black and white unemployment rates was smaller than it's ever been -- within 4.1 percentage points -- during an economic expansion; real median hourly wage growth for African Americans narrowly exceeded that of whites; and the African American middle class expanded."

Moreover, Wilson adds that "all of this happened without causing price inflation to accelerate or even increase."

The Federal Reserve defines full employment as a jobless rate between 5 percent to 5.2 percent. The nation's unemployment rate in March was 5.5 percent.

"The Federal Reserve is the most important decision maker when it comes to whether we'll get to full employment in the next two to three years," Wilson stressed. "The timing of the Fed's decision to raise interest rates will influence how low the unemployment rate gets, how quickly wages grow, and how much African Americans will share in our country's prosperity. For the sake of American workers, the Fed should not raise interest rates until we are much closer to full recovery and full employment."


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