December Jobs Report: Economic Recovery Remains Unstable and Unequal

The unemployment rate in December fell to 3.9%, according to this morning’s monthly jobs report. While unemployment declined this month for most demographic groups, the seasonally adjusted unemployment rate for Black women over age 20 increased from 4.9% in November to 6.2% in December. Over the last several months, Black women’s unemployment has fluctuated dramatically, a result of structural racism and sexism.

Overall, 199,000 jobs were added in December. About 6.3 million workers remain unemployed.

Over the course of 2021, 6.4 million more jobs were added, and the number of unemployed workers fell by 4.5 million. The unemployment rate declined for all demographic groups: for Black workers, it fell from 10.0% in December 2020 to 7.1% in December 2021, while unemployment for Latinx workers fell from 9.4% to 4.9% over the last year. Unemployment for Asian workers fell from 6.1% to 3.8% over the year. Long-term unemployment rates also fell.

“Working people mobilized and won policies—including enhanced unemployment benefits, the child tax credit, emergency rental assistance, paid leave, and the moratorium on student loan repayment—that supported economic recovery in 2021,” said Rebecca Dixon, executive director of the National Employment Law Project. “Yet Congress allowed many of the policies that powered last year’s economic recovery to expire, even as the nation faces another devastating pandemic surge. And Black and Latinx workers are still being disproportionately left behind. The recovery remains unstable and unequal.”

In December 2021, the unemployment rate for Black workers (7.1%) remained more than twice as high as the rate for white workers (3.2%)—a result of structural racism that policy changes have not been transformative enough to uproot. And labor force participation rates largely stalled in 2021, never approaching pre-pandemic levels.

At the same time, 3.1 million workers reported in December that they were unable to work because their employer closed or lost business due to the pandemic, and an additional 1.1 million workers were prevented from looking for work due to the pandemic. Because Congress terminated federal pandemic unemployment benefits, people thrown out of work due to the Omicron wave will receive much lower payments and will see their benefits cut off earlier, if they qualify for unemployment insurance at all.  Millions of workers, including low-paid workers and misclassified independent contractors, are now once again shut out of the unemployment insurance system entirely.

Congress must act to strengthen the nation’s economic recovery and ensure it is equitable. The Senate can no longer delay in passing the Build Back Better Act and enacting Senator Ron Wyden’s Unemployment Insurance Improvement Act, which will begin to address some significant ways the unemployment insurance system disproportionately excludes Black and Latinx workers, women workers, and workers with disabilities. It does so by providing at least 26 weeks of unemployment benefits, increasing coverage for part-time workers, and expanding eligibility by requiring states to consider workers’ most recent earnings and standardizing earning requirements. These reforms lay the groundwork for transforming our unemployment insurance system and enabling all workers to thrive.

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The National Employment Law Project is a non-partisan, not-for-profit organization that conducts research and advocates on issues affecting underpaid and unemployed workers. For more about NELP, visit www.nelp.org. Follow NELP on Twitter at @NelpNews.