Black Americans are working again, finally. This demographic, which struggled with double-digit unemployment even after the recession, has hit its lowest level of unemployment in 45 years.
The historic passage of tax-cutting reforms promises to expand wages and better-paying opportunities even further and, perhaps, President Trump may count another achievement: the highest level of black employment in recent memory.
The January jobs report carried good news for workers in the form of solid employment growth for the past few months. For black workers, the report was even better. Unemployment for blacks in the U.S. declined from 7.9 percent in December 2016 to 6.8 percent at the end of last year. Nearly half a million (480,000) more black workers are employed compared to one year ago.
This is a significant achievement. It’s been 17 years since the unemployment rate for blacks hit its previous lowest record rate of 7 percent. Under President Barack Obama, that rate spiked to a high of 16.5 percent.
Black women, who enjoy the highest labor participation rates among women in the labor force, made great strides as well. Some 246,000 black women gained jobs over the past year. The unemployment rate among black women fell from 7 percent to 5.8 percent. That’s better than declines for white women (from 3.8 percent to 3.4 percent) and Hispanic women (5.9 to 5.3 percent).
The economy is improving for black America and should continue to get better as pro-growth and pro-family policies expand our resources and deliver better opportunities.
Black households will feel the first impacts of new tax legislation in our paychecks hopefully as early as next month. The tax reform bill will deliver tax cuts to 80 percent of American households, reducing taxes by about $1,600 on average according to the Tax Policy Center. The nonpartisan congressional Joint Committee on Taxation finds that Americans in low- to middle-income tax brackets will disproportionately benefit from the tax cuts.
Many black households fall into these brackets. The median income for households in our community was just $33,321 in 2012 — well below the national median of $51,017 and below every other demographic.
But tax rate cuts are just part of what black families can look forward to. The standard deduction is nearly doubled for individuals and couples. Importantly, the standard deduction for Heads of Household (the filing status used by single parents) is nearly doubled to $18,000. Most black families are headed by a single parent today, so doubling this standard deduction takes more income off the table for taxes.
Expanding the Child Tax Credit to $2,000 and making more of it refundable will also help defray the costs of raising children, such as braces, tuition, and extracurricular activities like coding camps.
Beyond the individual income tax savings, the promise of increased wages — a coming result of a slashed corporate income tax rate — is important for the black community to build wealth in the long-term. Wages for black men and black women lag behind their white counterparts. Weekly median earnings for black men in full-time jobs was 77.1 percent of the median for white men, while black women’s earnings were 83.2 percent of those for white women. However, earning higher wages will move black families beyond living paycheck to paycheck.
Corporate tax cuts accelerate growth and encourage employers to reinvest in their workers through wage increases and better-paying jobs. One projection estimates that the nation’s economy will grow by 2.2 percent in the long run which translates into an increase of just under $3,000 per household.
We saw this begin on the very night that the tax reform bill passed as Americans witnessed a slew of headlines about corporate employers increasing wages, offering bonuses, or otherwise investing in developing their workforce. That was just the start.
Black Americans bemoaned the results of the 2016 election cycle. The Congressional Black Caucus even put out a 130-page report of what blacks have to lose under a Trump Administration. But growing economic data suggests that over the past year blacks have been elevated in the workforce.
A national agenda anchored by pro-growth policies like tax reform will keep us moving forward. As black families enjoy bigger paychecks and greater control over their resources, we will have the freedom to spend, save, and invest in our future.
The question is no longer what do black Americans have to lose under the Trump presidency, but how much more can we expect to gain?
Patrice Lee Onwuka is a Senior Policy Analyst at the Independent Women’s Forum and a contributor to Bold Global Media. Onwuka has worked in the advocacy and communications fields for more than a decade. Prior to joining IWF, she served as national spokeswoman and communications director at Generation Opportunity, and worked at The Philanthropy Roundtable and the Fund for American Studies in policy and media roles. She was also a speech writer for a United Nations spokesman. Onwuka is a regular guest on Fox News, Fox Business News, MSNBC, and PBS programs. Her writing has appeared in The Washington Post, The Hill, Bloomberg, The Washington Times, the New York Post, the Christian Science Monitor, and other outlets. She holds a bachelor’s degree in economics and political science from Tufts University and a master’s degree in economics and international relations from Boston College. Follow her @PatricePinkFil. To read more of her reports — Click Here Now.
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