Unemployment hits harder among Hispanics, blacks

The ax fell without sound or shadow: Tatiana Gallego was suddenly called into human resources and laid off from her job as an admissions counselor for a fashion college.

"The way people tried to explain it to me was, I was the last one hired so I was the first one out," said Gallego, 25, who had worked there for 17 months.

Last hired, first fired: This generations-old cliche rings true for millions of Hispanics and blacks who are losing jobs at a faster rate than the general population during this recession.

Much of the disparity is due to a concentration of Hispanics and blacks in construction, blue-collar or service-industry jobs that have been decimated by the economic meltdown. And black unemployment has been about double the rate for whites since the government began tracking those categories in the early 1970s.

But this recession is cutting a swath through the professional classes as well, which can be devastating to people who recently arrived there.

Since the recession began in December 2007, Hispanic unemployment has risen 4.7 percentage points, to 10.9 percent, according to the Bureau of Labor Statistics. Black unemployment has risen 4.5 points, to 13.4 percent. White unemployment has risen 2.9 points, to 7.3 percent.

Gallego, whose parents were born in Colombia, graduated from the University of Rhode Island. Her mother is self-employed, and her stepfather works in construction.

She was stunned when she was told to pack up and leave by the end of the day because enrollment was down at her New York City school. She said she had recently received a positive performance review, and her bosses were planning to send her to a conference.

"Maybe I just don't know that much about the business world, because I felt like I did more, I went above and beyond more than other people in my office did," she said.

Vulnerable minorities

William Darity, a professor of economics and African-American studies at Duke University, said that "blacks and Hispanics are relative latecomers to the professional world ... so they are necessarily the most vulnerable."

"We don't have those older roots to anchor us in the professional world," Darity said. "We don't have the same nexus of contacts, the same kind of seniority."

There are no recent government statistics that measure jobs lost by race and income. But Darity and others believe that professional Hispanics and blacks are more likely to lose their jobs in the recession.

"Many times blacks and Hispanics are the last to be hired, so naturally they are first to be fired," said Jerry Medley, who has been in the executive search business for 30 years.

"Not saying that it's racism," Medley said, "but if a manager or a senior executive is looking at a slate of individuals and has to let one of them go, chances are he or she will not let the person go that they spend a lot of time with at the country club or similar places."

The less wealth you have, the harder unemployment hits. Darity cited 2002 data that showed black households with a median net worth of $6,000, Hispanic households with a median of $8,000 and white households with a median of $90,000.

Philip Salter was creative director for a Chicago advertising firm where about 75 percent of the revenue came from a contract with a Fortune 500 company to create ads targeted at minorities. When the firm lost that contract plus two general-market accounts, Salter's job evaporated.

"When companies cut back their ad dollars, minority budgets are where they start," said Salter, 62, who is black. "Unfortunately in this business, most clients just view [minority advertising] as an overlay or meeting an obligation that social organizations might place on them."

His last day was in January 2008. With alimony payments and two kids in college, Salter moved from his four-bedroom house into an apartment and has scraped by on consulting gigs.

Salter's mother worked as a housekeeper, and his father was a custodian. Before his divorce, Salter's stepdaughter and her four children lived with him for many years.

Professional blacks "don't usually start out with an inheritance," he said. "On top of that, quite often things happen in our families to cause us stress. An unexpected child or grandchild, drug problems. When you try to set aside money to put your kids through college, all of a sudden you have to say, 'I can't let this family member fall and become homeless.'

"I would say eight out of 10 people I know have a similar situation."

Then there are those clinging to the bottom of the ladder, laid off from lower-paying jobs.

For them, "once the primary breadwinner loses his or her job, there isn't much backup," said Harry Holzer, former chief economist for the Department of Labor who now is a professor at Georgetown University and the Urban Institute.

The Great Depression ended after the government created a "safety net" of wide-ranging social-assistance programs. Since then, the overall unemployment rate peaked in 1981-1982, at 10.8 percent on a monthly basis, Holzer said.

Economists believe we could reach that level in the current recession, Holzer said -- but he added that unlike in the 1980s, today the safety net has been largely dismantled by restrictions placed on welfare and unemployment eligibility.

"You worry about populations of concentrated poverty and having less access to the safety net," Holzer said. "It could lead to social unrest, higher crime rates -- no one knows."

"It will obviously have an effect on the crime rate," said Maya Wiley, director of the Center for Social Inclusion, which recently issued a report stating that nonwhites are bearing the heaviest burden during the recession.

"There also are all sorts of health-related issues connected with that," Wiley said. "We could see higher rates of everything from homicides to tuberculosis."

As racism wanes and blacks and Hispanics advance up the economic ladder, many cite this progress as proof that it would be unfair to offer race-based remedies to those left behind. Even many minorities have embraced themes of self-help and personal responsibility.

Others, like the Duke professor Darity, say that America "has never come to terms with racial economic inequality."

"The current situation," Darity said, "is reinforcing and widening those inequalities."

------

On the Net:

Bureau of Labor Statistics: www.bls.gov

Jerry Medley: www.medleyrecruits.com