Why did Black Male Unemployment Drop so Sharply?

The jobless rate for African-American men saw a steep drop at the beginning of 2012.

Given that America's unemployment rate has been falling steadily since this past summer, no one was surprised to see that most demographic groups saw similar drops in their respective jobless rates. It did come as a surprise, though, to read the Bureau of Labor Statistics' (BLS) data for the fall in the number for black males over the age of 20 -- the figure tallied 12.7% at the end of January, a full three percentage points lower than that of the previous month.

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That's a big change. In terms of numbers, 250,000 fewer black men were out of work from month to month (from 1.3 million to 1.05 million), meaning an improvement of nearly 20%. That significantly outpaced the gains made by all other sub-demographics, black and white, and was far ahead of the improvement in overall unemployment during January, which ticked down 0.2 percentage points to total 8.3% of the American working population.

Unfortunately, that's as deep as the data gets. So it's hard to pin down why exactly the fall was so disproportionate. Dr. Walter E. Williams, a professor of economics at George Mason University, suggests that discouragement in job hunting might be the underlying reason.

"The Labor Department defines as unemployment persons able, willing and seeking work but can't find work," Dr. Williams wrote in an email. "Imag[in]e the total black labor force is 100 and 90 are employed. That means the unemployment rate is 10%. Suppose 5 people who've been looking for work but can't find it stop looking (what's called discouraged worker), that means the labor force consists of 95 people and the unemployment rate drops to 5 percent."

This is a good possible reason for the decline. Even after the drop, black male unemployment remains stubbornly high: that January rate of 12.7 for the demographic is still over 70% higher than the rate for whites overall, and almost 85% more than that for white men specifically. It's entirely realistic to think that thousands of black men who've gone without work for some time have given up.

But the numbers don't support this theory. There was no dramatic change in the labor participation figure for black men. It declined, but not by much - to 68.4% of the demographic at the end of January, from December's rate of 69.0%.

So the mystery remains. Why the deep cut in unemployment for African-American men in the first month of this year?

So far, it's too early to tell if it's just an anomaly or the beginning of a very positive longer-term trend. We should all keep an eye on the rate going forward... and keep our fingers crossed that it will continue to tumble.