Deindustrialisation, Deregulation, and Division: The Case of Shirebrook and Sports Direct [feedly]

Deindustrialisation, Deregulation, and Division: The Case of Shirebrook and Sports Direct
https://workingclassstudies.wordpress.com/2016/11/28/deindustrialisation-deregulation-and-division-the-case-of-shirebrook-and-sports-direct/

Deindustrialisation has ravaged areas of the English North and Midlands, areas that are also some of the hardest hit by successive governments' programs of austerity since 2008. A recent study claimed that the hollowing out of industry in these areas and its replacement with low paid, insecure work enabled by a severely deregulated labour market has meant that many people have been redirected out of the labour market and onto incapacity benefits. Those who employed must often work in chronically low-wage jobs with their meagre earnings topped up by state-funded tax credits. This transformation of the labour market has been largely overlooked by press and politicians alike, who instead problematically blame a lack of work ethic and migration affecting work chances and lowering wages.

Such rhetoric pits working-class groups against one another rather than challenging the root cause: the quality of employment and the wider political environment. Little wonder, then, that these areas were at the centre of debates about alleged 'white working-class' victims of uncontrolled immigration in the lead up to the referendum on Britain's membership of the European Union. One such place is, Shirebrook in Derbyshire, which has received migrant workers from Eastern Europe and where racial tension has been stirred up by the tabloid press.
Shirebrook was a small agricultural settlement until the shafts of Shirebrook Colliery were sunk in 1896, transforming the village almost overnight. It grew from around 600 people to 11,000 by 1911, and the population remains about the same to this day. The colliery company dominated the town, providing many of the facilities needed in the growing community, including a hotel, shops, and a miners' welfare institute; amenities, including water and electricity; and leisure activities such as allotment gardens, colliery cricket and football clubs, and a brass band.

When it closed in 1993, the colliery still dominated the town's economy, providing the vast majority of male employment, a story repeated across the region. Closure was devastating for Shirebrook, and the community suffered from the usual litany of deindustrial problems, including concentrated joblessness, declining levels of amenities, physical isolation, severe health problems, petty crime, and substance abuse. By 2001, Shirebrook was identified as one of the most deprived towns in England, qualifying it for investment from the government's Neighbourhood Renewal Fund to facilitate the redevelopment of the former colliery site. This was a mixed blessing, however, because as part of this regeneration Sports Direct, a sports-goods retailer, acquired land and built its headquarters and warehouse on the site in 2005. Sports Direct is now the largest employer in Shirebrook, with over 3000 people working there.

Sports Direct's employment practices have become a poster child for much that is wrong with contemporary work in the UK, with the company facing intense scrutiny from the Unite trade union and the Guardian newspaper, leading to a Parliamentary Select Committee investigation. Of the staff employed at the Shirebrook headquarters, only 200 are directly employed by Sports Direct with permanent contracts, leaving 3000 employed through employment agencies. Workers must agree to highly restrictive conditions, such as long periods where no work is available and the obligation to accept work when it is available. Workers are guaranteed just 336 hours per year, equating to a little more than 8 weeks' work. Agency workers are effectively on zero-hour contracts for the rest of the year, with no guaranteed income, both Sports Direct and the employment agencies legitimise this practice as offering both the worker and the client 'flexibility'. This flexibility only works in one direction. The agencies gain flexibility by contracts that don't obligate them to offer any assignments beyond the 336 hours, but if workers refuse any assignments offered to them, they can be sacked. This leaves the agency workers in a precarious position, which is compounded by the fact that most are Polish migrants who have limited networks of support available to them.

Sports Direct also uses a 'six strikes and you're out policy', where agency workers could be disciplined for minor offences, such as excessive toilet breaks, chatting, or being off work because of illness. Workers had no chance to defend themselves if they have been wrongly accused of a misdemeanour because challenging supervisors' decisions ran the risk of reducing their hours as a punishment. So the employer has yet more power over the agency workers, enabling them to discipline or dismiss workers and control how many hours they work. The investigation also uncovered accusations of sexual harassment, dubious health and safety records, and stringent security measures that required employees to spend excessive amounts of time at work – unpaid — to be searched after clocking-out and before they were allowed to leave. As a result, they earned less than minimum wage.

Sports Direct has revised its employment practices since the Parliamentary Select Committee investigation, stopping zero hour contracts, ending the six strikes policy, and also relaxed security measures. This is a step in the right direction, but is some way from a satisfactory outcome. The warehouse workers are still employed by agencies and remain on the same overly-constraining contracts. Most of the workers are migrant labour ,who are overrepresented in this type of poor quality work, characterised by low wages, unpredictable hours, and easily disposable personnel.

Regrettably, there appears to be little solidarity between the migrant workers at Sports Direct and the more established British residents of Shirebrook. Despite sharing similarly precarious positions in the deregulated and deindustrialised neoliberal economy, the Polish workers have frequently found themselves being blamed for the issues faced by all the residents of Shirebrook, a view propagated by the right-wing tabloid press. It would seem that the category 'white working-class' does not stretch to the white working-class Polish migrant workers at Sports Direct.

This story is typical of many former industrial towns, in the UK and beyond. It offers a object lesson in the consequences of replacing industry with precarious work, especially for workers and their communities. The conditions in Shirebrook and similar communities will only be effectively challenges when 'the working class' includes people of all backgrounds.

James Pattison

James Pattison is a PhD student in the School of Sociology and Social Policy at the University of Nottingham, UK.

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Stumbling and Mumling: On class politics [feedly]

On class politics
http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2016/11/on-class-politics.html

Trump's election victory has led to calls to bring class back into leftist politics. "Class trumps gender, and it's driving American politics" says Joan Williams. Sam Dale attacks the "toxic failure of identity politics" and says "Liberal elites have no clue about the lives of the working class. They should learn." John Gapper writes that the resentment that led to Trump and Brexit "seems to me to originate on the factory floor." And Mark Lilla writes:

The fixation on diversity in our schools and in the press has produced a generation of liberals and progressives narcissistically unaware of conditions outside their self-defined groups, and indifferent to the task of reaching out to Americans in every walk of life.

Of course, I applaud this re-assertion of class – which, in generals if not specifics, applies equally to the UK. We must, however, distinguish between a good and bad way of bringing class back into politics.

The bad way is to regard the "white working class" as yet another "demographic" to be catered to by marketing politics, often by claiming to heed their "legitimate concerns" about immigration.

I fear this would fail in its own terms: workers don't trust politicians who look like their bosses and who claim insincerely to care about their concerns.

But it fails in other ways. The very notion of a "white" working class plays the ruling class's game of divide and rule. This isn't just because it pits class politics against identity politics, but also because it imputes a racism to workers which is perhaps just as prevalent – and more damaging – among the boss class. It downgrades the many other genuine problems workers have, such as stagnant wages, insecurity and workplace tyranny. And it has the absurd implication that ethnic minorities aren't part of the working class too.

There is, however, a more intelligent form of class politics. This starts from the fact that class isn't a state of mind but an objective fact: if you're in a position of subordination to an employer, you're working class whatever you feel. This means that being working class unites otherwise disparate people. The immigrant chambermaid, the skilled coder whose boss is a twat, and the academic facing the neoliberalization of the university are all working class.

This means they have some common interests. All would benefit from increased control in the workplace and increased bargaining power.

In this sense, class politics should be a unifying force. And there needn't be a conflict between class politics in this sense and identity politics, for at least three reasons:

 - The same fuller employment and anti-austerity policies that would benefit workers would also help reduce gender and ethnic inequalities. In a tight labour market, employers will have less power to indulge racist and sexist attitudes.

 - Faster growth in real wages would foster a climate of tolerance of diversity. This year's events in the UK and US have vindicated Ben Friedman's point that economic growth breeds liberalism and stagnation creates intolerance and racism.

 - The same high basic income that increases workers' bargaining power is also (pdf) a feminist policy, both because it valorizes what has traditionally been "women's work" outside the marketplace, and because it gives women the ability to flee abusive relationships.

Of course, all this is easier said than done. One challenge for the left – which is as great today as in Marx's time – is to build class consciousness. Politics isn't just a marketing exercise aimed at getting our person into office. It's about building a constituency for intelligent class politics. This is a long game.

But let's remember the underlying fact here. The interests of the working class are, to a fair extent, the interests of most people. In this sense, the working class is not a problem in politics. It's the solution.

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How Many People Just Voted Themselves Out of Health Care? (Updated) (Updated again) (And again) [feedly]

How Many People Just Voted Themselves Out of Health Care? (Updated) (Updated again) (And again)
http://krugman.blogs.nytimes.com/2016/11/29/how-many-people-just-voted-themselves-out-of-health-care/

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If the Trump administration wants to do something useful, should progressives still oppose them? [feedly]

If the Trump administration wants to do something useful, should progressives still oppose them?
http://jaredbernsteinblog.com/if-the-trump-admin-wants-to-do-something-useful-should-progressives/

The question I pose above came out of this piece I posted in today's WaPo on confusion in the Trump camp about trade deals and trade deficits:

To hear President-elect Trump tell it, ripping up, repealing or renegotiating international trade deals will bring back lost factory jobs and restore the glory days of the American working class. Wilbur Ross, Trump's nominee to run the Commerce Department, plans to work with his new boss to release America from "the bondage" of "bad trade agreements."

Conversely, to President Obama, the for-now defunct Trans-Pacific Partnership trade agreement would have boosted America's growth, raised living, environmental and labor standards in the 11 other signatory countries, and blocked China from dominating the global stage.

They can't both be right, and the record shows that neither are. Those hoping that American industry will rise again if and when the president-elect whacks deals like the North American or Korea trade deals will be profoundly disappointed. Neither does the failure of the TPP pave the way for the rise of our new Chinese overlords.

The problem with this hyper-elevation of trade deals is that it conflates the deals with the trade. The real problem, as I'll explain, is the persistent and economically large trade deficits that the United States has run with our trading partners since the mid-1970s, which at this point have little to do with trade deals.

If the Trump administration seriously intends to help the displaced manufacturing workers and communities that were instrumental in the president-elect's upset victory, it will need to shift its line of attack from trade deals to the trade deficit.

I think it would be good economic policy, and probably good politics–though truth be told, I really have no idea anymore about what's good politics–to help workers, families, and communities hurt by the downsides of globalization. For years, elites from all sides of the aisle have basically ignored these people's loss of high value-added work, assuring them that globalization is always and everywhere a force for good, at least as long as the winners win enough such that they can compensate the losers.

Whether or not they do so–i.e., compensate the losers–well, that's "outside the model."

If the new administration wants to try to help those displaced workers who were so instrumental in their upset victory–a very, very big if–I've got ideas that I believe would work better than ripping up trade deals or imposing 45 percent tariffs.

If they want to run a real infrastructure program, unlike the wasteful privatization scheme they've cooked up, progressives with a background in public goods have useful ideas here as well.

Progressives are already shouting loudly, as we should, when the incoming Trump administration puts forth patently lousy ideas, like their big, regressive tax cut or their repeal–and maybe sorta partially replace later–of Obamacare.

But what about if they want to invest in infrastructure or preserve manufacturing jobs or reduce the trade deficit or possibly raise the minimum wage? Should we emulate the Tea Party/McConnell in the Obama years and basically maintain that any wins for a Trump administration, including those that actually help working people, should be opposed on political and ideological grounds?

"Yes" is not a crazy answer. Based on Trump's campaign, his administration poses an existential threat to inclusive democracy in general and minorities, women, immigrants, and Muslims in particular. There are reasonable people who worry that any successes that accrue to a Trump administration spell danger for their vulnerable enemies.

Then there's the Bernie Sanders approach: "To the degree that Mr. Trump is serious about pursuing policies that improve the lives of working families in this country, I and other progressives are prepared to work with him. To the degree that he pursues racist, sexist, xenophobic and anti-environment policies, we will vigorously oppose him."

As I said above and in many other places, I'm a deep skeptic about the extent to which the president elect "…is serious about pursuing policies that improve…" etc. Each day, and these are the early days, cabinet picks and various related antics suggest that, as many of us strongly suspected, all that populist stuff was just for the campaign.

But I will continue to not solely critique but to offer ways to actually accomplish the purported goals of the administration vis-a-vis working people, as I did in the WaPo piece today. If nothing else, people should learn about what an actual pro-worker agenda really looks like.

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Yes, the Rust Belt demands an answer. But does anyone know what it is? [feedly]

Yes, the Rust Belt demands an answer. But does anyone know what it is?
http://jaredbernsteinblog.com/yes-the-rust-belt-demands-an-answer-but-does-anyone-know-what-it-is/

This WaPo piece by James Hohmann makes a strong point that one hears a good deal these days: the Hillary Clinton campaign failed to provide hope that her administration could bring good jobs back to key swing states like Ohio, while the Trump campaign succeeded in hammering that message home.

The piece focuses on a foresightful memo written in May by David Betras, a Democrat operative in Ohio, warning that Ms. Clinton was getting beat on the jobs message:

"More than two decades after its enactment, NAFTA remains a red flag for area voters who rightly or wrongly blame trade for the devastating job losses that took place at Packard Electric, GM, GE, numerous steel companies, as well as the firms that supplied those major employers," Betras…tried to explain to the Clinton high command. "Thousands of workers in Ohio … continue to qualify for Trade Readjustment Act assistance because their jobs are being shipped overseas."

"Look, I'm as progressive as anybody, okay? But people in the heartland thought the Democratic Party cared more about where someone else went to the restroom than whether they had a good-paying job," he complained. "'Stronger together' doesn't get anyone a job."

…

"The messages can't be about 'job retraining.' These folks have heard it a million times and, frankly, they think it's complete and total bulls**t," he continued."Talk about policies that will incentivize companies to repatriate manufacturing jobs. Talk about infrastructure … The workers we're talking about don't want to run computers; they want to run back hoes, dig ditches (and) sling concrete block. … Somewhere along the line we forgot that not everyone wants to be white collar."

Like I said, that's a perfectly smart, defensible rap that in hindsight looks awfully prophetic. But something very big and very important is missing from Betras' warning and Hohmann's analysis: neither Democrats nor Republicans really know what to do to help these workers and their communities.

Trump was either devious or smart enough–choose your adjective–to pretend he had/has a solution and to successfully sell a nostalgic vision to these voters. Frankly, I'm not sure many believed him as much as they didn't see much reason for going with her and figured they'd give him a chance. If he fails to deliver, as I suspect he will, they'll throw him out when they get the chance.

Hillary Clinton was a lot more fundamentally honest about this issue of bringing the factory jobs back to the swing states in the Rust Belt. Instead, she told a more complicated story about reshaping globalization through better trade deals and investing in advanced manufacturing, and yes, retraining workers. Precisely the stuff Betras correctly said would not resonate.

But as long as we're being honest, we must admit that neither side has a strong, convincing plan to restore high-value added jobs to the many communities that have lost much of their manufacturing base.

We're much better, as Democrats, at policies that help the poor. Higher minimum wages and strong work supports like the Earned Income and Child Tax Credits can combine to make what would be a $15,000 job a $30,000 job (e.g., raise the minimum from $7.25 to $12 and add $5K of refundable tax credits; sprinkle liberally [sic] with affordable health care).

But when it comes to pushing back on the impact of globalization–to "repatriating manufacturing jobs" as Betras called for–we're at much more of a loss.

This must change, and not just for political reasons (though that should be a strong motivator for politicos), but for policy reasons.

The deeply flawed premise through which elites have long operated is that trade is a net plus for everyone as long as the winners compensate the losers. But in the real world, the winners both fail to do so and use their winnings to buy tax and deregulatory policies that further screw the losers.

I've studied this problem for years and don't have anything like a complete answer. I do know that we must start by lowering our economically large, persistent, and distortionary trade deficit, especially to the extent that it is pumped up by other countries manipulating savings and exchange rates. Also, Betras is right about a robust infrastructure program, but that's a temporary fix.

But I would strongly urge my colleagues in the progressive policy analytic community (and the foundations that support them) to move this problem–the loss of good, middle-class jobs in significant swaths of the nation–to the top of their agendas. We've gone too long without an answer to this one, and the consequences are not at all pretty.

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Why China could Lead the Next Phase of Globalization [feedly]

Why China could Lead the Next Phase of Globalization
http://www.globalpolicyjournal.com/blog/24/11/2016/why-china-could-lead-next-phase-globalization

f Trump carries out his promises of isolationism and protectionism, China will soon fill the void left by the US on the World stage.

Donald Trump is on his way to becoming the 45th president of the United States. Among his promises are a 45% import tax on Chinese products, the cancellation of the Paris climate agreement and, as was confirmed today, the end of the Trans-Pacific Partnership trade deal.

If he doesn't go back on his plans for global trade and international affairs, Trump will give room to other nations to take the lead in shaping globalization. While the US might be taking a step back from the world – a world it helped to create, to a large extent – China in particular can be expected to take on a more prominent role.

While the US is currently the world's largest economy, in purchasing-power terms China is expected to overtake it in 2016, according to the International Monetary Fund. China has benefited significantly from globalization. Over decades, it has invested in enhancing its capabilities and built economic links with many countries. It has become viewed as an important overseas partner and investor.-after

This chart shows how China is forecast to overtake the US as the world's dominant economic power by 2030, based on share of global GDP, trade and exports.

 

                                                                                                                                         Image: Economist

Something China understands very well is the importance of connectivity – and hence transport infrastructure – for economic growth and development. Its major development framework is the One Belt One Road initiative with its two pillars, the Silk Road Economic Belt and the 21st Century Maritime Silk Road. This development project involves a territory equal to 55% of global GDP, 70% of the global population and 75% of its known energy reserves. "The investments will involve about 300 projects extending from Singapore to Turkmenistan,"reports Reuters.

One building block of One Belt One Road – also known as OBOR – is the Regional Comprehensive Economic Partnership (RCEP). This China-driven alliance will comprise Australia, New Zealand, China, India, Japan and South Korea – as well as the ASEAN region. In 2014, ASEAN was the seventh-largest economic power in the world. It was also the third-largest economy in Asia, with a combined GDP of US$2.6 trillion – higher than all of India.

China on the world stage

On the African continent, China is lending billions towards large-scale infrastructure investments, again part of OBOR, and particularly in transportation. One of its flagship projects is the Standard Gauge Railway in Kenya. There's also the development of deepwater ports in cities such as Dakar, Dar es Salaam and Djibouti. These are likely to become industrial hubs, following the model of China's development of the new Cameroonian deepwater port of Kribi.

The Russian Trans-Siberian Railway (TSR) is at the origin of rail transportation between Europe and Asia. Recently, Anthony Cuthbertson wrote in Newsweek that Vladimir Putin may be envisaging a Hyperloop Silk Road. This could present an alternative to the planned construction of 64,000 kilometres of rail tracks that are intended to strengthen existing pathways between the east and west. CRRC Corp, China's largest maker of railway equipment, was in talks for a potential investment in Hyperloop One, the company behind the idea, Bloomberg reported earlier this year.

Meanwhile, China is launching an $11 billion fund for Central and Eastern Europe, targeting investments in infrastructure and high-tech manufacturing, among other things, both in the region and beyond. Supply-chain operator DB Schenker started running weekly block trains between China and Germany as long ago as 2011. Four years later, the first train carrying containers from China arrived in the Rail Service Centre freight terminal in the Port of Rotterdam.

With the New Development Bank (NDB), the Silk Road Fund and the Asia Infrastructure Investment Bank (AIIB), China has prepared itself for responses to major financing needs – within and beyond the Belt and Road area. This shows some similarity with the Marshall Plan, the US support plan that helped to rebuild western Europe after the end of the Second World War.

With the US pulling out of the TPP, as Trump has indicated it will, China holds an advantage. The binding agreement, which connects Asian countries to North and Latin American nations, has been perceived by many as an obstacle to China's reach and a way to solidify US alliances with other nations in the Pacific region. Other Asian countries with high export potential, such as Malaysia and Vietnam, are expected to benefit significantly from TPP, while countries that did not sign the agreement, such as the Philippines, risk losing out. This could have a disruptive effect on the region due to trade and investment diversion.

So far, China has faced scepticism and criticism for its international activities. Many have questioned its development in Africa, for example. But China could yet regain a level of moral authority; it could lead the global climate adaption effort if the US pulls away, for instance. It has already warned Trump against backing away from the Paris climate deal.

What's in store for relations between the US and China? For a start, there may be tough negotiations over the US import tax on Chinese goods. If both nations find the right balance, they will not only avoid a global trade war, as in the 1930s when the implementation of the Smoot-Hawley tariff act intensified nationalism around the world, but they could also move their bilateral relations to new grounds.

Whatever happens, if the US pulls away from globalization, China stands ready to fill the gap.

Wolfgang Lehmacher, Head of Supply Chain and Transport Industries, World Economic Forum. The article first appeared on The World Economic Foum.

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Employment continues its sluggish recovery along racial lines in the third quarter of 2016 [feedly]

Employment continues its sluggish recovery along racial lines in the third quarter of 2016
http://www.epi.org/publication/employment-continues-its-sluggish-recovery-along-racial-lines-in-the-third-quarter-of-2016/

In September 2016, the national unemployment rate increased to 5.0 percent, a slight uptick from 4.9 percent at the end of the second quarter in June 2016. Over the third quarter, 19 states saw their unemployment rates decline, while 30 states saw unemployment rise. Twenty states and the District of Columbia have unemployment rates below their prerecession levels. State unemployment rates ranged from a low of 2.6 percent in South Dakota to a high of 6.7 percent in Alaska. Consistent with the long-standing trend at the national level, African Americans had the highest unemployment rate at 8.4 percent, followed by Hispanics (5.7 percent), whites (4.9 percent), and Asians (3.9 percent).

Read more:
State unemployment by race and ethnicity, 2016Q2
State unemployment by race and ethnicity, 2016Q1
State unemployment by race and ethnicity, 2015Q4
State unemployment by race and ethnicity, 2015Q3

State unemployment rates, by race and ethnicity

The following is an overview of racial unemployment rates and racial unemployment rate gaps by state for the third quarter of 2016. We provide this analysis on a quarterly basis in order to generate a sample size large enough to create reliable estimates of unemployment rates by race at the state level. We only report estimates for states where the sample size of these subgroups is large enough to create an accurate estimate.

Trends among whites

In the third quarter of 2016, the white unemployment rate was lowest in South Dakota (1.2 percent) and highest in West Virginia (6.2 percent), as shown in the interactive map, which presents state unemployment rates by race and ethnicity. South Dakota also had the lowest white unemployment rate in the preceding four quarters, while West Virginia has had the highest white unemployment rate for six consecutive quarters.

Table 1 displays changes in state unemployment rates by race and ethnicity from the fourth quarter of 2007 to the third quarter of 2016. Consistent with the first half of the year, Wyoming is the state where the white unemployment rate is most elevated above its prerecession level—2.7 percentage points higher than in the fourth quarter of 2007. On the other hand, the white unemployment rate is at or below its prerecession level in 24 states: Arkansas, California, Colorado, District of Columbia, Hawaii, Kansas, Kentucky, Maine, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, New Hampshire, Nevada, North Carolina, Ohio, Oregon, Rhode Island, South Dakota, Tennessee, Virginia, Vermont, and Wisconsin. In the second quarter of 2016, half of the states had reached this milestone, although some of the states on the list have changed. In another 15 states, the white unemployment rate was within 0.5 percentage points of its precession level.

Table 1

Trends among African Americans

During the third quarter of 2016, the African American unemployment rate was lowest in Vermont (6.2 percent) and highest in Illinois (14.2 percent). Illinois has had the highest unemployment rate for four consecutive quarters. Since the fourth quarter of 2015, the black unemployment rate in Illinois has risen 1.1 percentage points as unemployment has increased 0.7 percentage points statewide. Consistent with last quarter, seventeen states had African American unemployment rates below 10 percent in the third quarter of 2016—in 12 of these states, the rate was lower than the third quarter national average for African Americans (8.4 percent).

As shown in Table 2, which displays the black-white and Hispanic-white unemployment rate ratios in the third quarter of 2016, New York's black-white unemployment rate gap was the smallest in the country. In that state, the black unemployment rate was 1.5 times the white rate during the previous quarter. This change was due to a decrease in the state's black unemployment rate at the same time that whites increased their likelihood of unemployment. The largest gaps were in the District of Columbia, where the black unemployment rate was 8.0 times the white rate, and Illinois, where the black unemployment rate was 2.9 times the white rate.

Table 2

With regard to recovery, the African American unemployment rate in the third quarter is at or below its prerecession level in 12 states: Arkansas, California, Indiana, Michigan, Missouri, Mississippi, New Jersey, New York, Ohio, South Carolina, Tennessee, and Texas. But this numerical "recovery" must be put in proper context because with the exceptions of Texas, New York, New Jersey, and Tennessee, each of these states also had black unemployment rates that were among the highest in the nation before the recession. Of the states where the black unemployment rate has recovered, Indiana, Michigan, Missouri, Ohio, and South Carolina, have black unemployment rates lower than the third quarter national average for blacks (8.4 percent). Similar to last quarter, the black unemployment rate remains most elevated above its prerecession level in Pennsylvania and Alabama (4.4 and 3.7 percentage points higher, respectively). Before the recession, the African American unemployment rate was 7.2 percent in Pennsylvania and 6.3 percent in Alabama.

Trends among Hispanics

In the third quarter of 2016, the Hispanic unemployment rate was highest in Pennsylvania (11.8 percent) and lowest in Virginia (2.8 percent). (These states maintained their ranking from the second quarter.) The Hispanic unemployment rate is at or below its prerecession level in 10 states: California, Colorado, Florida, Georgia, North Carolina, Nevada, New York, Texas, Utah, and Virginia. The Hispanic unemployment rate is within 0.5 percentage points of its prerecession level in Connecticut, New Jersey, and Washington. It is a sign of a more meaningful recovery in Colorado, Florida, Texas, Utah, and Virginia that the Hispanic unemployment rates lower than the national average. The Hispanic unemployment rate was most elevated above its prerecession level in Arizona and Illinois (2.3 and 1.8 percentage points higher, respectively).

The Hispanic unemployment rate is lower than the white rate in Virginia (with a Hispanic-white unemployment rate ratio of 0.9), while the Hispanic-white unemployment rate gap is largest in District of Columbia, where the Hispanic unemployment rate is 3.0 times the white rate. This ratio is up from the previous quarter (2.0) as a result of a 1.2 percentage point increase in Hispanic unemployment while white unemployment dipped down 0.1 percentage point.

Trends among Asians

The Asian unemployment rate was lowest in Hawaii (2.8 percent) and highest in Nevada (8.0 percent). Hawaii has had the lowest Asian unemployment rate for four consecutive quarters. The Asian unemployment rate remains most elevated above prerecession levels in Nevada (5.1 percentage points). The Asian unemployment rate was below the prerecession levels in California, Illinois, and Washington, and within 0.5 percentage points of the precession levels in Hawaii and New York.

Methodology

The unemployment rate estimates in this issue brief are based on the Local Area Unemployment Statistics (LAUS) and the Current Population Survey (CPS) from the Bureau of Labor Statistics. The overall state unemployment rate is taken directly from the LAUS. CPS six-month ratios are applied to LAUS data to calculate the rates by race and ethnicity. For each state subgroup, we calculate the unemployment rate using the past six months of CPS data. We then find the ratio of this subgroup rate to the state unemployment rate using the same period of CPS data. This gives us an estimate of how the subgroup compares to the state overall.

While this methodology allows us to calculate unemployment-rate estimates at the state level by race by quarter, it is less precise at the national level than simply using the CPS. Thus, the national-level estimates may differ from direct CPS estimates.

In many states, the sample size of these subgroups is not large enough to create an accurate estimate of their unemployment rate. We only report data for groups which had, on average, a sample size of at least 700 in the labor force for each six-month period.

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