September Jobs Report: Hiring Slows, Public Employment Falls, and Racial Inequities Persist

Nationwide—Approximately 263,000 jobs were added in September, and the unemployment rate declined slightly to 3.5%, according to this morning’s monthly jobs report. Approximately 5.8 million workers were unemployed last month. The unemployment rate fell for Black, Latinx, Asian, and white workers, although the unemployment rate for white workers (3.1%) remained far below the rate for Black workers (5.8%).

“As the Federal Reserve continues to raise interest rates, job growth is slowing,” said Rebecca Dixon, executive director of the National Employment Law Project. “Congress must act to overhaul the unemployment insurance system to better support all jobseekers. At the same time, we cannot simply accept the deep racial disparities that continue to mark employment—and unemployment—in this country. Policymakers and public agencies must actively intervene to prevent discrimination in job markets.”

A recent report by NELP and the Institute on Race, Power and Political Economy at The New School highlighted racially discriminatory hiring practices as one major cause of employment disparities and called for expanded government oversight and the use of selective audit testing to incentivize employers to eliminate bias in hiring.

The unemployment rate among Latinx workers fell from 4.5% in August to 3.8% in September. For Asian workers, the unemployment rate fell from 2.8% to 2.5%.

While many sectors, including manufacturing, professional and business services, and retail trade have regained most or all of the jobs lost since the COVID-19 pandemic struck, employment in state and local governments was still down substantially in September from its pre-pandemic peak in February 2020, and the public sector continued to shed jobs in September.

In September 2022, 5.2 million workers were employed by state governments, down 16,000 workers since August and nearly 80,000 from the number of workers employed pre-pandemic. Meanwhile, 14.2 million people were employed by local governments in September, a decrease of 521,000 local government workers since before the pandemic and a loss of 11,000 workers in the last month. Most of the local government job loss has been among teachers not hired back for the 2022-2023 school year.

Cities’ and states’ sluggish pace in hiring back teachers, sanitation workers, firefighters, librarians, public hospital staff, and other public workers after the pandemic jobs crisis not only undercuts critical public services that working people and their families depend on, but also diminishes a key source of stable, often unionized employment.

The loss of public sector jobs has particularly harmed Black workers, especially Black women. Black workers have long sought economic security and opportunity in public sector work, largely because in the public sector civil service rules, stronger protections against discrimination and union agreements have reduced the impact of racial discrimination in the workplace. This is a key reason why public sector jobs have been a mainstay for Black workers and their families, which is undercut by the slow recovery of state and local employment.

As September’s jobs report once again shows, the unemployment rate for Black workers remained substantially higher than the rate for white workers. Yet this trend is not inevitable. Instead, it is a result of policy choices. By combatting racial discrimination in the private sector through proactive use of tools such as audit testing, and working to restore stable, unionized jobs in the public sector, policymakers can begin to uproot structural racism in the economy. At the same time, the unemployment insurance system must be overhauled to better support Black workers and other workers of color who are disproportionately experiencing joblessness.

As NELP’s Rebecca Dixon recently testified before a House subcommittee, Congress must implement permanent, structural reform of the unemployment insurance system before the next recession. Senator Ron Wyden’s Unemployment Insurance Improvement Act would 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.

As workers and advocates push for federal reform, state policymakers can act immediately to improve their own unemployment insurance systems. NELP’s new UI Policy Hub offers recommendations for state advocates.


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