Derrick Collins
Dean,
College of Business, Chicago State University
Abstract
Empirical analysis performed by economic and financial researchers, Drs. Ernst Coupet and Dr. Ehab Yamani, in their recent study, Economic Report on the Impact of the Coronavirus on the African American Employment in Chicago, predicts inequitable unemployment impacts on African Americans and Latinos in the City of Chicago as a result of the onset of the novel coronavirus,Covid-19. Moreover, this predictability of unequal impact aligns with long-held anecdotal beliefs common in the African American community.
Since the Age of Enlightenment, the arc of human progress has been advanced by the analysis of empirical data, however, four centuries later a biological contagion serves as a catalyst of reason.
A novel coronavirus with the utilitarian name, Covid-19, revealed in stark relief the structural inequity undergirding U.S. employment practices and the predictable negative consequences of this behavior. A companion pair of research essays conducted by two finance professors from Chicago State University, correctly predicted that African Americans will suffer disproportionately as a result of a virus which, itself, exhibits no racial bias. Dr. Ernst Coupet and Dr. Ehab Yamani co-authored the, “Economic Report on the Impact of the Coronavirus on the African American Employment in Chicago” for the purpose of examining “the effect of the virus may have on the state of inequality among the African American labor community.”
What is so striking about the Coupet/Yamani research compilation is the sheer predictability – the fact that racial bias in the U.S. is so pervasive, and so persistent, it can be mathematically modeled. A set of actions and reactions that are ugly and cold, but nonetheless are orderly, predictable, systemic and thereby can be reduced to an algebraic equation. Such a dynamic is the definition of structural bias. The second-most striking thing about this body of research is that the data analysis provides empirical evidence for some common axioms, regarding race, which African Americans have quoted for decades. This “common knowledge” was provided quantitative support by the Coupet/Yamani study, as it validated the insight of generations of elders in the African American community.
“When White Folk Catch Cold, Black Folk Get Pneumonia”
The researchers studied the employment impacts caused by the September 11, 2000 terrorist attack and the 2007 – 2008 recession, and used this history, combined with higher-order mathematics, to illuminate a clear racial bias in the U.S. and Chicago labor markets. The rationale for studying these two events to predict the impact of Covid-19 on employment is that these events were unplanned and sudden external shocks to the economy in a fashion similar to the sudden onset of the coronavirus on the country. In both cases, the national unemployment rates for African Americans were higher and more volatile. The 2007–2008 “Great Recession” was quite an impactful event as the African American unemployment rate peaked at 13.56%, in contrast to the white unemployment rate which peaked at 7.44% during the same time period. Moreover, African Americans experienced more volatility during this time period as reflected in a standard deviation of 2.75%, while the standard deviation of white unemployment was 1.75%. Again, a disproportionate impact on black folk during a painful economic time period.
African Americans in the City of Chicago during this time period suffered a more acute impact as evidenced by a mean unemployment rate of 13.90% and standard deviation of 3.92% – roughly double the white unemployment rate of 6.28% and standard deviation of 2.20%.
“Last Hired, First Fired”
Delving deeper into this analysis of unemployment following the exogenous economic shocks of 9/11 and the Great Recession, the data appears to show that there is an actual preference for white employees over African-Americans and Latinos. In general, African American unemployment rises quicker and higher, and lasts longer, than white unemployment following an unplanned and sudden “shock event” similar that of a 9/11 or Great Recession. The researchers found that the data indicates, “a long-run association between white unemployment and African American unemployment, in the sense that unemployment is first decreased in the white sector, followed by a lagged unemployment decrease in the African American labor market. This finding suggests that most of the unemployment in the white sector are of the structural and frictional forms, while the African American unemployment is largely cyclical in nature. Put differently, the African American labor market appears to serve as a secondary labor market to the white sector that fills in during expansionary times but suffers great losses during economic downturns.”
“It’s Not What You Know, But Who You Know”
When discussing unemployment rates and race, the impact of education is usually invoked as it has been proven to have a significant impact on employment and income. The researchers acknowledge the longstanding academic literature that correlates educational attainment with earnings – generally speaking, the higher the educational attainment, the higher one’s earnings. However, the Coupet/Yamani study validates that beyond education, the factor with the most impact on unemployment continues to be race. In the subject study, the researchers compared 24 specific community areas on the South/Southeast sections of Chicago which are primarily African American and Latino to the 77 neighborhoods that comprise the entire city. In 2019, the mean unemployment rate for the City of Chicago was 8.5%, whereas the South/Southeast sides’ rate was 12.6%, which is 48% higher than the city, as a whole. Similarly, the mean of median household income for Chicago during this time was $53,392, as compared to the South/Southeast side result of $37,477, which is 30% lower than the overall city result.
These statistics appear unsurprising at first glance, until the context of educational attainment is considered. Citywide, 16.2% of Chicago households have less than a high school diploma, as compared to the 15.1% of South/Southeast households, which fared approximately 7% better than the city’s results. City households with a high school diploma and some college coursework comprise 51.2%, as compared to the South/Southeast side where 58.4% of households attained the same level of education, which equates to a 14% better level of attainment than the overall city households. Chicago households with a college degree represent 32.7%, compared to 26.4% of South/Southeast households. Thus, the educational attainment of households in African American and Latino neighborhoods in Chicago is better at all levels other than a modest differential in college attainment. This brings the analysis back to race to explain the disparities in the categories that really matter, such as employment and income.
“Lift Every Voice”
Sometimes data can be shocking – this is one of those times. Numbers are typically dispassionate, sterile, and cold to the touch. However, on rare occasions, a sequence of digits will glow like embers – illuminating objects in close proximity, while emanating heat and invoking passion. Most people, with a basic sense of fairness and logic, understand that a random collection of numbers can show almost anything – once, maybe twice. However, something is terribly amiss when the dice are thrown and the combination of digits add up to the same seven or eleven for white individuals, while the dreaded “snake eyes” is the reliable and consistent result for black and brown folk. Every. Single. Time. This is not only unfair – it’s unproductive and suboptimal. The strength of diversity is just that – strength. It has been empirically proven that the inclusion all builds a stronger whole, nevertheless, more work is needed to make this a realistic norm.
The analysis performed by this diverse team of researchers (African American of Haitian lineage and Egyptian) illustrates the systemic – alas, predictive – disparities in the U.S. employment sector. This structural inequity must be addressed with a structural process that makes awareness of diversity a positive element, as opposed to being a trigger for negative response. To make this happen will require the intervention of awareness and education to remove the structural inequities and improve the outcomes of diversity, equity, and inclusion (DEI) among all citizens. Given this need, the work of DEI professionals will only become more important, more impactful, and more necessary as we seek to move mindsets, and a country, forward into a more diverse, equitable and inclusive existence.
Reference
Coupet, E. & Yamani, E. (2020). Economic Report on the Impact of the Coronavirus on the African American Employment in Chicago. Chicago, Illinois; Chicago State University. Downloaded from: https://www.csu.edu/news/documents/ECON_COVID_Report.pdf
