Asian Americans are the most likely to face structural long-term unemployment — the TVA of a federal job guarantee would solve

From an economic standpoint, Asian Americans are presumed to fare better than average, even during downturns—a perception that contributes to their reputation as “model minorities.” Indeed, from 2007 to 2010, Asian Americans had annual unemployment rates that were slightly lower than those of whites. But these numbers mask persistent disadvantages for Asian Americans. UPDATE: May 2012 supplement shows that Asian Americans continued to suffer the most from long-term unemployment in 2011 This issue brief begins by examining and explaining patterns in Asian American unemployment rates from 2007 to 2010. It then examines in detail a particular subset of unemployed Asian Americans: those who have been out of work for more than half a year, also known as the long-term unemployed. Principal findings include: Overall, Asian Americans have lower unemployment rates than whites, but this is due to Asian Americans’ higher education levels. Highly educated Asian Americans suffer from higher unemployment rates than similarly educated whites. Specifically, Asian American workers with at least a bachelor’s degree are more likely to be unemployed than white workers with the same level of education—a fact that is particularly salient because 57.2 percent of the Asian American labor force falls into this category. Highly educated Asian Americans’ higher unemployment rates when compared with highly educated whites are partly due to nativity—i.e., the fact that Asian Americans are more likely to be foreign born. In 2010, Asian Americans had the highest share of unemployed workers who were unemployed long term (for more than half a year) when compared with white, black, and Hispanic workers. That year, nearly half of all unemployed Asian Americans fell into this category. Being foreign born and residing in states with high long-term unemployment partly explains Asian Americans’ high long-term unemployment rates. Racial bias appears to be a factor in patterns of unemployment and long-term unemployment among Asian Americans. Compared with similar white workers, many Asian American workers are having a harder time finding employment. Patterns in unemployment rates among Asian Americans Asian Americans typically have lower unemployment rates than whites, contributing to the common belief that Asian Americans are more economically successful than average. Figure A shows unemployment rates by quarter from 2007 through 2010. Generally, Asian American unemployment tracks slightly lower than that of white Americans. During the last quarter of 2010, however, the Asian American unemployment rate was 7.5 percent, compared with 7.4 percent for whites.1 FIGURE A White and Asian American unemployment rates, by quarter, 2007–10 Year White Asian American 2007Q1 4.1% 3.1% 2007Q2 3.7% 3.1% 2007Q3 4.0% 3.2% 2007Q4 3.7% 3.6% 2008Q1 4.4% 3.3% 2008Q2 4.3% 3.9% 2008Q3 4.9% 4.2% 2008Q4 5.4% 4.5% 2009Q1 7.5% 6.4% 2009Q2 7.7% 7.4% 2009Q3 8.0% 8.0% 2009Q4 8.0% 7.7% 2010Q1 8.8% 8.2% 2010Q2 8.0% 7.4% 2010Q3 7.8% 7.5% 2010Q4 7.4% 7.5% 3.1% 8.2% 7.5% 4.1% 8.8% 7.4% Asian American White 2007 2008 2009 2010 ChartData Notes: These data are not seasonally adjusted and exclude biracial or multiracial individuals and Hispanics. Data refer to workers age 16 and over. Source: Author’s analysis of Current Population Survey basic monthly microdata Share Tweet Embed Download image TABLE 1 Educational distribution of Asian American and white labor forces, 2010 (age 25+) Asian American White Less than high school 7.2% 4.4% High school 18.6% 28.3% Some college 16.9% 28.7% Bachelor’s degree 33.7% 24.7% Advanced degree 23.5% 13.9% Notes: These data exclude biracial or multiracial individuals and Hispanics. Shares may not total 100 percent due to rounding. Source: Author’s analysis of Current Population Survey basic monthly microdata Share Tweet Embed Download image Asian American unemployment rates are generally lower because Asian American workers have higher education levels on average than white workers. As Table 1 shows, Asian American workers are more likely than white workers to have bachelor’s or advanced degrees. More than half (57.2 percent) of Asian American workers fall into this category, compared with slightly less than two-fifths (38.6 percent) of white workers. Workers with higher education levels generally have lower unemployment rates. As Figure B shows, unemployment rates are lowest for those with at least a bachelor’s degree, among both Asian American and white workers. FIGURE B Unemployment rates, by race and education, 2010 (age 25+) Asian American White Less than high school 10.9% 15.0% High school diploma or GED 7.7% 9.0% Some college 8.1% 7.4% Bachelor’s degree 6.8% 4.7% Advanced degree 3.7% 3.2% Asian American White Less than highschool High schooldiploma orGED Some college Bachelor’sdegree Advanceddegree ChartData Note: These data exclude biracial or multiracial individuals and Hispanics. Source: Author’s analysis of Current Population Survey basic monthly microdata Share Tweet Embed Download image Yet as Figure B also indicates, Asian Americans with higher education levels are disadvantaged when compared with similarly educated white workers. In 2010, 6.8 percent of Asian Americans age 25 and older with a bachelor’s degree were unemployed, compared with 4.7 percent for similarly educated whites. Asian Americans with an advanced degree and with some college education also had higher unemployment levels: 3.7 percent compared with 3.2 percent for those with an advanced degree, and 8.1 percent compared with 7.4 percent for those with some college. In contrast, Asian American workers with a high school education or less fared better than similarly educated white workers. For example, the unemployment rate for Asian Americans with less than a high school education was 10.9 percent, compared with 15.0 percent for whites. Asian American high school graduates had an unemployment rate of 7.7 percent, compared with 9.0 percent for white high school graduates. But as Table 1 shows, only about one-fourth of Asian American workers have these education levels; the remaining three-fourths are disadvantaged relative to similarly educated whites. These patterns are consistent with those found by Austin (2010). Table 2 illustrates how these overall disparities generally started out very small in 2007 and 2008 but widened in 2009 and 2010 in the immediate aftermath of the Great Recession. It is important to note that during every year examined, Asian Americans with a bachelor’s or an advanced degree were more likely to be unemployed than similarly educated whites. In contrast, over all four years, Asian Americans with a high school education or less were less likely to be unemployed than were comparable whites. TABLE 2 Unemployment rates of Asian Americans and whites, by nativity and education, 2007–10 (age 25+) * Calculations represent the percentage-point difference between the Asian American and white populations. Percentage-point-change figures may not sum properly due to rounding. Note: These data exclude biracial or multiracial individuals and Hispanics. Source: Author’s analysis of Current Population Survey basic monthly microdata Share Tweet Embed Download image Explaining patterns in Asian American unemployment rates What can explain these counterintuitive patterns—in particular, that of highly educated Asian Americans having higher unemployment rates than similarly educated whites? Could nativity play a role? In other words, could these patterns be driven by the fact that most Asian Americans in the labor force—more than three-fourths—are immigrants, compared with only 5 percent of white workers?2 Since the majority of Asian American workers are foreign born and the vast majority of white workers are U.S. born, it is useful to compare the rates for foreign-born Asian Americans with the rates for U.S.-born whites. This demonstrates that nativity does indeed help explain these patterns. For example, in 2010, 7.2 percent of foreign-born Asian Americans with a bachelor’s degree were unemployed, compared with 4.6 percent of similarly educated U.S.-born whites (as shown in Table 2). Among those with an advanced degree, foreign-born Asian Americans had an unemployment rate of 3.8 percent, while U.S.-born whites had a rate of 3.1 percent.3 As noted previously, more than three-fourths of Asian American workers are foreign born, while 95 percent of white workers are U.S. born. Thus, the overall unemployment disparities between Asian Americans and whites with bachelor’s and advanced degrees are affected by highly educated, foreign-born Asian Americans having higher unemployment rates than similarly educated U.S.-born whites.4 Aside from nativity, another factor in these disparities in unemployment rates could be racial bias. Research finds discrimination at the top; in other words, Asian Americans with higher education levels face more discrimination in employment than those with lower levels (Sakamoto and Furuichi 2002). This would help explain the overall pattern of highly educated Asian Americans having higher unemployment rates than similarly educated whites. In particular, it would explain why highly educated native-born Asian Americans tend to have higher unemployment rates than similarly educated native-born whites (as shown in Table 2). In addition, experiments on implicit bias find that Asian Americans are usually perceived as foreign born.5 Thus, it is likely that less-educated Asian Americans are more able to obtain lower-paid jobs—jobs deemed appropriate for immigrants. This helps explain why, overall, Asian Americans with lower education levels have lower unemployment rates than less-educated whites. Explaining high long-term unemployment rates among Asian Americans After exploring overall unemployment trends among the Asian American population, this issue brief will now focus on a particular subset of unemployed Asian Americans: the long-term unemployed, or the share of the jobless who have been unemployed for at least 27 weeks (more than half a year).6 Among the more troubling aspects of the Great Recession and its aftermath are the record-breaking levels of long-term unemployment. Despite their lower overall rates of unemployment, Asian Americans had higher rates of long-term unemployment in 2010 than whites, blacks, and Hispanics. Figure C shows that the share of unemployed workers who have been unemployed long term has steadily increased for all racial groups as a result of the recession. In 2007, 20.9 percent of unemployed Asian Americans had been jobless for more than half a year. This share increased to 35.5 percent in 2009 and to 48.7 percent in 2010. Asian Americans had the second-highest rate of long-term unemployment from 2007 to 2009, after African American workers. But in 2010, Asian Americans surpassed African Americans in this measure: 48.7 percent of Asian Americans who were unemployed were without work for more than half a year, compared with 48.5 percent for African Americans. Meanwhile, the rate stood at 42.7 percent for whites and 39.3 percent for Latinos. FIGURE C Long-term unemployment shares, by race and ethnicity, 2007–10 White Black Hispanic Asian 2007 16.20% 23.80% 14.30% 20.90% 2008 18.30% 26.00% 17.30% 22.10% 2009 30.20% 39.00% 28.20% 35.50% 2010 42.70% 48.50% 39.30% 48.70% 20.90% 22.10% 35.50% 48.70% 14.30% 17.30% 28.20% 39.30% 23.80% 26.00% 39.00% 48.50% 16.20% 18.30% 30.20% 42.70% White Black Hispanic Asian 2007 2008 2009 2010 0 5 10 15 20 25 30 35 40 45 50 55% ChartData Notes: The data for whites, blacks, and Asians exclude biracial or multiracial individuals and Hispanics. The data indicate the share of unemployed workers who have been unemployed for 27 weeks or more. Data refer to workers age 16 and over. Source: Author’s analysis of Current Population Survey basic monthly microdata