Post-Pandemic Recovery Among Racial Groups “Most Equitable In Recent History”

Post-pandemic economic recovery among racial groups is the “most equitable in recent history,” a new Treasury Department report has found.

While Black and Hispanic Americans typically bear the brunt of recessions, economic gaps between racial groups have narrowed in the last three years.

Post-Pandemic Unemployment Rates

The Treasury Department report states that prospects for the American economy looked grim at the beginning of 2021 following the pandemic and numerous lockdowns.

Professional forecasters expected the unemployment rate to remain well above 5% for the following year, with Black and Hispanic Americans being most affected, as in previous years. 

The Black and Hispanic unemployment rates were predicted to be 9.6% and 7.0% at the end of 2021.

However, the tables turned, and the unemployment rates for Black and Hispanic workers instead dropped to 7.0 and 4.8% by the end of 2021.

These differences meant an additional 530,000 Black and 670,000 Hispanic Americans were employed at the end of 2021, beyond what had been forecasted.

“Most Equitable Recovery”

Despite the high inflation rate during the pandemic and recovery, wage growth outpaced consumer price growth, so real wages and earnings rose for most full-time workers.

Median earnings for full-time workers rose for all races from 2019 through 2022, with extra sharp increases for Black and Hispanic workers.

During the COVID recession and recovery, the three-year growth rate of real earnings was 4% for Black workers, 2.4% for Hispanic workers, and 0.3% for white workers.

The median net worth of Black and Hispanic families rose 60% and 47% from 2019 to 2022, compared to 31% for white families.

Other measures of financial well-being for these workers, on average, remained either relatively strong or improved, such as low delinquency rates and increasing household wealth.

For example, the rates of business ownership for Black and Hispanic families rose by 6.2 and 2.8 percentage points, respectively, to their highest rates in history.

Black and Hispanic business ownership rates also skyrocketed in this recession, rising between 2019 and 2022 by 6.2 and 2.8 percentage points to their highest recorded readings at 11.0 and 9.8%.

According to the evidence from household finance and labor markets described in the report, The Treasury Department claims this recovery was the most equitable in recent history.

Explaining The Post-Pandemic Recovery 

In past recessions, according to Axios, Black and Hispanic workers have been more likely to lose their jobs than white workers, and the damage has been much longer-lasting.

In the 2008-2009 recession, the gap between jobless rates among Black and white workers more than doubled, rising from 4% to 8.4% in the Spring of 2011.

The racial gap didn’t return to its 2007 level until 2016, seven years after the recession ended.

However, this time differed for Black and Hispanic workers, and the report listed several reasons.

In 2021, the Economic Impact Payments (EIPs) scheme saw more than $500 billion transferred directly to households to support their incomes during the pandemic.

These payments disproportionately boosted Black and Hispanic households who had much lower base amounts of wealth than white households.

Black and Hispanic households were also more likely to receive more transfers than white families.

The Biden-Harris Administration’s Emergency Rental Assistance Program and the Homeowner Assistance Fund also supported communities with higher shares of Black or Hispanic households.

Child tax credits, small businesses, and entrepreneurship support also helped change the statistics for Black and Hispanic people to recover.

“The report shows the progress we’re making on building a more equitable economy, narrowing the racial wealth gap, and addressing enduring inequities in wealth accumulation,” said Deputy Secretary of the Treasury Wally Adeyemo.

“The Biden administration will remain committed to capitalizing on the progress made during the recovery and investing in the people, places, and infrastructure that have been too often left behind.”