Arkansas jobless rate dips to 5.7%, rate much higher for minorities

Arkansas’ labor market is showing signs of stability, but the jobless rate for black teenagers in Arkansas hovers at or below 40%, and has in recent years been as high as 53.9%.

The jobless rate for Arkansas during December fell to 5.7% compared to 7.4% in December 2013, and down from 5.9% in November, according to figures released Tuesday (Jan. 27) by the U.S. Bureau of Labor Statistics. The December numbers are subject to revision.

Arkansas’ annual average jobless rate fell from 7.9% during 2011 to a revised 7.5% during 2012. The annual average jobless rate for Arkansas during 2013 is 7.5%, with the annual average jobless rate likely to fall to around 6.4% in 2014.

The size of the Arkansas workforce – 1.324 million – fell by 0.2% compared to December 2013, but was better than the 1.315 million in November. The peak for Arkansas’ labor force was 1.367 million in May 2008.

The number of employed in Arkansas during December was 1.248 million, above November employment of 1.238 million, and up an estimated 19,586 jobs compared to December 2013. The number of unemployed was an estimated 75,757 during December, below the 77,001 in November, and more than 23% below the 98,484 in December 2013.

The closely watched nonfarm payroll number was 1.207 million in December, the second consecutive time the category topped 1.2 million since September 2008. The nonfarm category does not include farm workers, private household employees, non-profit employees and “general government” employees. Investopedia estimates that the nonfarm category represents about 80% of the total workforce that contributes to national GDP.

Nonfarm payroll during December was better than the 1.203 million in November and up over the 1.185 million in December 2013. Nonfarm jobs reached a high in Arkansas of 1,209,800 in February 2008.

MINORITY EMPLOYMENT
The labor market trends are better unless you are a black teenager. The jobless rate for blacks age 16-19 was 37.4% in November – the most recent month data is available. That is down from 39.7% in October, and just below the 37.9% in November 2013.

The November jobless rates were much lower for white (9.1%) and hispanic (8.3% teenagers. The jobless rates for white and hispanic teenagers have seen big drops in recent years, but that has not been the case for black teenagers. Following is a five-year track of the jobless rates for the three demographics.

November 2014
Black: 37.4%
White: 9.1%
Hispanic: 8.3%

November 2013
Black: 37.9%
White: 32%
Hispanic: 47.9%

November 2012
Black: 40.2%
White: 23%
Hispanic: 7.8%

November 2011
Black: 42.9%
White: 17.7%
Hispanic: 12.4%

November 2010
Black: 38.3%
White: 27.5%
Hispanic: 30.9%

Greg Kaza, executive director of the Arkansas Policy Foundation, said the persistent high unemployment among black youth is “scandalous.” He said part of the blame is on an education system failing minorities with respect to providing workforce skills.

“It’s a sign that the education system isn’t working,” Kaza said.

Jeff Collins, an economist with The City Wire, said education is one of “numerous and complicated” reasons the jobless rate remains high in the black community. Collins said the “structural element” has changed in recent years in which an erosion of the manufacturing base has shifted job opportunities to the service sector.

“So what you have is more competition for jobs that require less experience and education. So the people who are going to be left out are those who are least prepared for employment and those who are least able to get to a job,” Collins said.

He also said “discrimination is clearly still an issue” among employers when it comes to hiring teenagers and black teenagers. In addition to racial discrimination, Collins said employers are more likely to hire older workers – non-teenagers – who have a job experience than a teenager looking for that first job.

As for a solution, Collins said there are no easy answers. He said governments and the private sector could do more to provide career opportunity lessons – resume building, interview skills, etc. – and skills training. He also said entrepreneurial lessons learned through “micro-loan” efforts in third-world countries should be considered.

“Could we create that (micro-loan entrepreneurism) in our communities? … We might look at that, and fund small enterprises that would provide employment experiences,” Collins said. “That’s a more positive way, I would think, of intervening in those communities with high jobless rates.”

ARKANSAS SECTOR NUMBERS
In the Trade, Transportation and Utilities sector — Arkansas’ largest job sector — employment during December was an estimated 244,200, down from 244,600 in November and unchanged compared December 2013. Employment in the sector hit a high of 251,800 in March 2007.

Manufacturing jobs in Arkansas during December totaled 157,200, unchanged compared to November and above the 151,800 in December 2013. Employment in the manufacturing sector fell in 2013 to levels not seen since early 1968, and is down 22.5% compared to December 2004. Peak employment in the sector was 247,300 in February 1995.

Government job employment during December was 215,800, up from 215,400 in November and unchanged compared to December 2013.

The state’s Education and Health Services sector during December had 177,100 jobs, down from 177,300 during November and up from 173,500 during December 2013. Employment in the sector is up 22.1% compared to December 2004.

The construction sector employed an estimated 51,700 in December, up from 50,300 in November and above the 45,900 in December 2013. November was the first time the sector was above 50,000 since June 2010. The sector is off the employment high of 57,600 reached in March 2007.

Arkansas’ tourism sector (leisure & hospitality) employed 113,900 during December, up from 110,400 during November, and above the 106,900 during December 2013. The December number, if it stands, marks a new record for employment in the sector.