The Demographics of the Jobs Recovery

I. Overview

Two years after the U.S. labor market hit bottom, the economic recovery has yielded slow but steady gains in employment for all groups of workers. The gains, however, have varied across demographic groups, with Hispanics and Asians, in particular, experiencing a faster rate of growth in jobs than other groups. Their employment levels are higher now than just before the start of the Great Recession in December 2007, a milestone not yet reached by white and black workers.

The disparate trends in the jobs recovery from 2009 to 2011 reflect the rapidly changing demographics of the American workforce. Although jobs growth for Hispanics and Asians was more rapid than for other groups, it merely kept pace with the growth in their working-age (ages 16 and older) populations. The slower rate of jobs growth for whites and blacks reflects the relatively slow growth in their populations. Thus, the share of each group’s population that is employed, the employment rate, has barely risen since the end of the recession, according to new Pew Research Center analysis of government data.

The story is the same when one looks at the jobs recovery for immigrants and native-born workers. Immigrants, the vast majority of whom are Hispanic or Asian, are experiencing a faster rate of growth in employment than are native-born workers. This difference is also roughly in line with the difference in the growth in their working-age populations during the recovery.

Demographic change, however, does not explain why men have gained more jobs than women since 2009. Among the groups examined in this report, women represent the only group for whom employment growth has lagged behind population growth in the recovery. Job cutbacks by federal, state and local governments is one reason women have lagged behind men in recent years, but a previous analysis by the Center found that much about this phenomenon remains unclear.¹

The Great Recession triggered a steep, two-year decline in employment. From a peak of 145.8 million in the fourth quarter of 2007, overall employment fell to a low of 138.1 million by the fourth quarter of 2009.² The labor market has since been on the mend, and in the two-year period ending in the fourth quarter of 2011, employment rose to 141.2 million, a gain of 2.3%.

For Hispanics, the recovery has raised employment from 19.5 million in the fourth quarter of 2009 to 20.7 million in the fourth quarter of 2011, an increase of 6.5%. For Asians, employment increased from 6.7 million to 7.2 million, or by 6.8%. Gains are smaller for whites, from 95.4 million to 96.4 million (1.1%), and blacks, from 14.3 million to 14.6 million (2.2%).³

Over the full cycle of the recession and the recovery, that is, from 2007 to 2011, employment increased from 19.9 million to 20.7 million for Hispanics and from 6.9 million to 7.2 million for Asians, an increase of about 4% for each group. For blacks and whites, employment levels remain about 5% below the levels at the start of the recession, with lingering losses of 4.9 million jobs for white workers and 0.8 million jobs for black workers.

The differences in jobs growth across groups largely reflect the differences in population growth. From 2007 to 2011, the Hispanic working-age (16 and older) population increased by 12.8% and the Asian working-age population increased by 10.9%. However, the white working-age population grew only 1.3%, and the black working-age population increased by 5% in this four-year period. Since much of the addition to the workforce is Hispanic and Asian,⁴ their share in employment growth is high.

Foreign-born workers are also experiencing a faster rate of growth in employment than native-born workers. In the recovery, from the fourth quarter of 2009 to the fourth quarter of 2011, employment among the native born increased 1.8% (2 million) and employment among the foreign born increased 5.2% (1.1 million). This difference also reflects the difference in the growth in their working-age populations from 2009 to 2011.

Jobs growth for immigrant workers in the recovery has been sufficient to restore their employment to what it was just before the recession began—22.6 million in the fourth quarter of 2011, compared with 22.5 million in the fourth quarter of 2007. The number of employed native-born workers in the fourth quarter of 2011—118.6 million—was 4.8 million short of the number before the start of the recession.

Women, who fared better than men in the recession, have not done as well in the recovery. Men realized a gain of 2.6 million jobs from the fourth quarter of 2009 to the fourth quarter of 2011, compared with only 0.6 million for women. Nonetheless, compared with before the start of the recession in 2007, employment levels for men are down by more, a loss of 3.4% for men versus 2.9% for women. Thus, men still face a steeper climb back.

This report focuses on two metrics to measure the strength of the economic recovery: changes in employment levels and changes in employment rates. The latter is the share of the working-age population that is employed. A rising share indicates that employment growth is outpacing population growth and that the economic recovery is robust enough to clear the backlog in employment created by the Great Recession. A flat share signals a weak recovery that is struggling to clear the backlog and to restore employment to its potential as defined by the employment rate that prevailed prior to the recession.

Although employment is on the rise in the economic recovery, it is growing at a rate that just keeps up with ongoing additions to the stock of workers. The Great Recession put about 8 million people out of work, and the employment rate fell from 63.0% in the fourth quarter of 2007 to 58.5% in the fourth quarter of 2009. By the end of 2011, the employment rate had risen only slightly, to 58.7%. This suggests that the slack created by the recession is still largely present in the labor market and that the share of people with jobs is much less than it could be, based on pre-recession outcomes.

The shortfall in employment relative to its potential is greatest for black workers. Their employment in the fourth quarter of 2011 is estimated to be 12% (about 2 million) below its potential. The current employment gap is estimated to be more than 7% (7 million) for whites, nearly 6% for Hispanics (upwards of 1 million) and 5% for Asians (less than 0.5 million). The percentage gaps for all racial and ethnic groups are only slightly smaller than they were two years ago.⁵

The unemployment rate, another key labor market indicator analyzed in the report, decreased from 2009 to 2011 for all groups examined in this report. But at least part of the drop in unemployment rates during the recovery is due to a smaller share of people actively seeking work. That is because people who do not actively seek work are not counted among the unemployed. Among racial and ethnic groups, this phenomenon was most notable for Hispanics and whites. Not coincidentally, the unemployment rate for Hispanics and whites decreased more during the recovery than it did for blacks and Asians.

A handful of industries were responsible for most of the job gains in the economic recovery. Both Hispanics and non-Hispanics gained significant numbers of jobs in professional business services, wholesale and retail trade, and manufacturing. The leading source of jobs growth for Hispanics was the hospitality sector—eating, drinking and lodging services—where they gained 326,000 jobs from 2009 to 2011. They also gained 101,000 jobs in construction.

This report analyzes labor market outcomes in the economic recovery for racial and ethnic groups, the native born and the foreign born, and men and women. The recovery is defined as the two-year period from the fourth quarter of 2009 to the fourth quarter of 2011. Officially, the Great Recession lasted from December 2007 to June 2009. However, the employment level reached its trough six months later, in December 2009.⁶ Thus, the recession, for purposes of this report, is defined as the two-year period from the fourth quarter of 2007 to the fourth quarter of 2009.

The data for this report are derived from the Current Population Survey (CPS), a monthly survey of about 55,000 households conducted jointly by the Bureau of Labor Statistics (BLS) and the Census Bureau. Data from three monthly surveys were combined to create larger sample sizes for individual groups of workers. Thus, most of the analysis is conducted on a quarterly basis. Unless otherwise noted, estimates in this report are not seasonally adjusted.⁷

Estimates in this report are adjusted for annual, technical revisions to the CPS and will not match estimates published by the BLS (see Appendix A for details). Employment estimates in this report, from the survey of households, will also not match the payroll estimates of employment published by the BLS from its surveys of employers. Payroll data cannot be used in this report because, except for gender, they do not record the demographic characteristics of workers.