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Different Race, Different Recession
American Indian Unemployment in 2010
By ALGERNON AUSTIN


Economic Policy Institute 
Issue Brief #289
November 18, 2010


http://epi.3cdn.net/94a339472e6481485e_hgm6bxpz4.pdf

[moderator: please use the link above to view the tables
which accompany this brief]

There are two very different experiences of the
recession in some regions of the country. While Alaska
and the Northern Plains states have had some of the
lowest unemployment rates for whites since the start of
the recession, these regions have had among the highest
rates of joblessness for American Indians.1

This Issue Brief documents these extreme regional
employment disparities as well as the smaller but still
significant ones between American Indians and whites
from the first half of 2007 to the first half of 2010.
It presents American Indian and white unemployment rates
and employment-to-population ratios nationally and
broken down by region. The key findings are:


 From the first half of 2007 to the first half of 2010,
the American Indian unemployment rate nationally
increased 7.7 percentage points to 15.2%. This increase
was 1.6 times the size of the white increase.


 By the first half of 2010, the unemployment rate for
Alaska Natives jumped 6.3 percentage points to 21.3%-the
highest regional unemployment rate for American Indians.


 Since the start of the recession, American Indians in
the Midwest (see Table 1 for the states within each
region) experienced the greatest increase in
unemployment, growing by 10.3 percentage points to
19.3%. 


 By the first half of this year, slightly more
than half-51.5%-of American Indians nationally were
working, down from 58.3% in the first half of 2007.


 In the first half of this year, only 44% of American
Indians in the Northern Plains were working, the worst
employment rate for Native Americans regionally.


 The employment situation is the worst for American
Indians in some of the same regions where it is best for
whites: Alaska and the Northern Plains.

Unemployment rates

From the first half of 2007 to the first half of 2010,
the American Indian unemployment rate increased 7.7
percentage points to 15.2% (Figure A). This increase was
1.6 times the white increase of 4.9 percentage points.
The white unemployment rate rose to 9.1%. Thus, in the
first half of 2010, the American Indian unemployment
rate was 6.1 percentage points higher than the white
rate.

While Alaska Natives did not show a significant increase
in unemployment from 2007 to 2009, by the first half of
2010 their unemployment rate jumped 6.3 percentage
points to 21.3%-the highest unemployment rate by region
for American Indians (Table 2). The small sample size
for this region, however, means that this estimate has a
relatively large margin of error.

From the first half of 2007 to the first half of 2010,
the American Indians in the Midwest region experienced
the greatest increase in unemployment. The American
Indian unemployment rate in this region grew by 10.3
percentage points to 19.3%. Whites in the Midwest
region, however, only saw an unemployment rate increase
of 4.6 percentage points, raising their unemployment
rate to 9.4%.

The third highest unemployment rate regionally for
American Indians in the first half of 2010 was in the
West region. In that region, the Native American
unemployment rate was 16.8%. This rate is a decline from
18.7% in the first half of 2009. Compared to the Native
American unemployment rate in the first half of 2007,
the 2010 level is up 9.7 percentage points, the second
largest American Indian increase over the period. Whites
saw their largest increase in unemployment in the West
region, jumping 6.7 percentage points to 11.6%.

Employment-to-population ratios

To be counted as unemployed, one has to be actively
looking for work at the time of being surveyed. Groups,
like American Indians, who experience long spells of
unemployment or who have an especially difficult time
finding work, are more likely to drop out of the labor
force by not actively looking for work. As a result, it
is useful to examine the employment-to-population ratio
or the employment rate for these groups. The employment
rate simply identifies what portion of the working-age
population is employed. All individuals without jobs are
counted as not working whether or not they are actively
looking for work at the time of the survey.

From the 2007 to 2010, the American Indian employment-
to-population ratio has been lower than the white ratio
(Table 3). In the first half of 2007, it was 5.2
percentage points lower. By the first half of 2010, the
gap had grown to 7.8 percentage points. Both groups have
experienced declines in employment, but American Indians
experienced larger declines. By the first half of this
year, slightly more than half-51.5%-of American Indians
were working, down from 58.3% in the first half of 2007.

The drop in employment was also largest in the Northern
Plains region. The employment rate declined 13.6
percentage points in this region from the first half of
2007. The second largest decline was seen in the
Southwest region, where the American Indian employment
rate declined 10.3 percentage points to 46.7%. Alaska
had the third worst employment rate, 46.6%, but it only
experienced a 2.5 percentage point decline. Even during
the relative "good times" of early 2007, less than half
(49.2%) of Alaska Natives were working. The highest
American Indian employment rates were found in the
Northeast (57.1%) and Southern Plains (54.9%) regions.

Regional disparities between American Indians and whites

The employment situation is the worst for American
Indians in some of the same regions where it is best for
whites. For whites in the first half of this year,
Alaska and the Northern Plains regions had lower than
average unemployment rates. While the rate for whites
nationally was 9.1%, it was 6.9% in Alaska and 6.3% in
the Northern Plains. American Indians in these regions
were among the worst off. While the unemployment rate
for American Indians nationally in the first half of
this year was 15.2%, it was 21.3% in Alaska and 16.4% in
the Northern Plains.

In the first half of this year, these two regions also
had disparities of approximately 20 percentage points in
the employment-to-population ratio between American
Indians and whites (Table 5). In Alaska, the very large
employment rate disparity has been present from the
start of the recession. In the Northern Plains region,
there was a sizeable 11.9 percentage-point disparity in
the first half of 2007, and that grew into a 21.1
percentage-point gap by the first half of this year.

Unlike Alaska and the Northern Plains, whites in the
Southwest have been hit hard by the recession.
Nonetheless, the disparity in the employment-to-
population ratio between whites and American Indians has
grown substantially since the start of the recession. In
the first half of 2007, the gap was 8.6 percentage
points, but by the first half of this year it had grown
to a 13.2 percentage-point gap.

Conclusion

Although the Great Recession is technically over, when
looking at the American Indian employment situation,
there is little sign of recovery. Nationally, Native
American unemployment continues to rise, and employment
continues to decline.

We find some of the largest disparities in employment
between American Indians and whites in Alaska, the
Northern Plains, and the Southwest. These are also the
regions of the country where the ratio of the Native-to-
non-Native population is among the highest (U.S. Census
Bureau 2007). These facts raise the possibility that the
problem of low employment rates among American Indians
may be at least partially due to larger social and
economic conflicts between the two groups.

Appendix: How These Unemployment Estimates Differ from
the Bureau of Indian Affairs Labor Force Report

The unemployment rate and employment-to-population ratio
estimates in this Issue Brief are based on a different
sample and methodology from those that appear in the
Bureau of Indian Affairs (BIA) American Indian
Population and Labor Force Report. The statistics from
these different reports, therefore, should not be
compared. The BIA Labor Force Report is based on the
American Indian and Alaska Native population that lives
on or near a reservation and is eligible for BIA-funded
services. This population is only about one-third of the
total American Indian and Alaska Native population. This
report uses the total American Indian and Alaska Native
population, including bi-racial individuals, to generate
the statistics for this analysis. Additionally, the
Current Population Survey (the data source for the
analysis in this report) only counts as unemployed those
individuals who are actively looking for work. The BIA
Labor Force Report does not state that it has this
restriction.

Endnotes

In this Issue Brief, "American Indian" 1. and "Native
American" are defined to include bi-racial individuals
who indicate that one of their racial identities is
"American Indian or Alaskan Native."

References

U.S. Census Bureau. 2007. The American Community-
American Indians and Alaskan Natives: 2004. Washington
D.C.: U.S. Department of Commerce.

___________________________________________

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Rodney D. Coates
Professor