For Black Kids in America, a Degree Is No Guarantee

The Ivy-League-educated barista who can't find a job that pays enough to live anywhere besides her childhood bedroom. The freshly minted MBA and law-school graduates strapped with debt and frustrated about the six-figure jobs and master-of-the-universe titles that haven't materialized.

Nearly five years after the Great Recession officially ended, the struggles and dampened expectations of young college graduates have become a fixture of American politics and even popular culture. But amid all the focus on the difficulties of college-educated millennials, one facet of this upheaval has remained largely unexplored: the continued significance of race.

As a new crop of college graduates joins the American workforce, unemployment rates among minorities with degrees remain distinctly elevated and their economic prospects disproportionately dimmed, a new report released by the Center for Economic and Policy Research has found.

In 2013, the most recent period for which unemployment data are available by both race and educational attainment, 12.4 percent of black college graduates between the ages of 22 and 27 were unemployed. For all college graduates in the same age range, the unemployment rate stood at just 5.6 percent. The figures point to an ugly truth: Black college graduates are more than twice as likely to be unemployed.

"We absolutely aren't trying to discourage people from going to college," said John Schmitt, a senior economist at the Washington-based Center for Economic and Policy Research who coauthored the study. "College degrees do have value. But what we are trying to show here is that this is not about individuals, or individual effort. There is simply overwhelming evidence that discrimination remains a major feature of the labor market."

Schmitt pointed to a series of studies that have in recent years found that when trained sets of black and white testers with identical resumes are sent on interviews, white men with recent criminal histories are far more likely to receive calls back than black men with no criminal record at all.

In fact, the center's study found that even black students who majored in high-demand fields such as engineering fare only slightly better than those who spent their college years earning liberal arts degrees. Between 2010 and 2012, 10 percent of black college graduates with engineering degrees and 11 percent of those with math and computer-related degrees were unemployed, compared with 6 percent of all engineering graduates and 7 percent of all those who focused their studies on math and computers.

College-educated blacks are also more likely than all others with degrees to confront underemployment, which the study defined as working in jobs that don't require a four-year degree. The proportion of young African-American college graduates who are underemployed has spiked since 2007 by fully 10 percentage points to a striking 56 percent. During that same period, underemployment among all recent college graduates has edged up only slightly to around 45 percent.

The study also found that among older college graduates, the gap in the unemployment rate narrows but doesn't disappear. Bureau of Labor Statistics data indicates that in 2013, 3.5 percent of all white college graduates were unemployed while nearly 6 percent of all black college graduates sought work but could not find it.

Many studies have found that workers unable to find steady employment during their first years in the labor market often pay long-term costs. During the first five years after school, people try on, discard and pick up better-fitting careers, develop key skills, typically make major income gains, and begin to plug into the professional networks that provide training, contacts, and new job opportunities in the future. When unemployment disrupts that process it can permanently alter the trajectory of a worker's lifetime earnings, economists have concluded.

The situation for other minorities falls somewhere in between that of blacks and whites, according to federal data. In 2013, the share of all college-educated Asian-Americans who were unemployed roughly equaled the proportion of whites: 3.6 percent. All Hispanic college graduates faced a 5 percent unemployment rate, more than whites but less than African-Americans.

For most of the past 50 years, the overall black unemployment rate has remained twice as high as the white unemployment rate. That gap has consistently grown larger during times of economic distress. Indeed, the center study found that the gap between the unemployment rate for young African-American college graduates and all other graduates has soared from 3.7 percentage points in 2007 to 6.8 points today.

"This study—its findings, as terrible as they are—honestly should not come as a shock to anyone who is willing to face the truth about employment and unemployment in the United States," said Nancy DiTomaso, a professor at Rutgers University who studies inequality and organizational diversity.

DiTomaso says the study, like other research, challenges the assumption that opportunity is available to all Americans who equip themselves with the right skills. Private-sector labor data reported to the federal government shows little change in the share of management and executive-level jobs held by racial and ethnic minorities since the 1980s, she said. In fact, in industries that offer workers the best wages, the share of white men in these jobs has actually grown.

The center's study noted that half of the nation's management, professional, and related occupations—those the study described as fields where many college graduates ultimately work—employ a disproportionately small share of black male workers.

In her 2013 book, The American Non-Dilemma: Racial Inequality Without Racism, DiTomaso concluded that racial inequality isn't rooted solely in racist ideas or conscious efforts to exclude some groups from distinct opportunities. Instead, she argued that informal networks allow whites, who still hold most of the decision-making positions in the private economy, to hoard and distribute advantage among their family and friends, who tend to be mostly white.

While researching her book, DiTomaco conducted 246 interviews with working-class and middle-class white individuals over a decade in Tennessee, Ohio, and New Jersey. DiTomaso gathered detailed job histories and information about the way her study participants obtained jobs over the course of their careers. The whites among those DiTomaso interviewed found 70 percent of the jobs they held over their lifetimes through inside information shared by a family member, friend, or neighbor, a direct intervention (someone walking a resume into a hiring manager's office or a direct request that a family member or friend get an open job) or other means not open to the general public.

"I think it's high time," DiTomaso said, "that we really started to look closely not just at the ways that the labor market is biased against blacks but the ways in which it is biased in favor of whites."

The researchers behind the center's study of black college graduate employment patterns emphasized the role that the recession has played in dampening every worker's employment prospects. But they concluded that the long-term unemployment crisis among black college graduates ultimately could not be explained without accounting for continuing discrimination against black applicants.

One of their final pieces of evidence: A study pushed into the national spotlight last month in which partners at a number of law firms scored the same memo far differently when told that the author was white or black. "Those are the institutional factors that have a long-term effect on people's economic lives," Schmitt said.