The unemployment rate among Native Americans has fallen near its lowest level in more than two decades, according to a report by the Wells Fargo economics group.
The unemployment rate for Native Americans has averaged 6.2% so far this year, close to the 2019 average of 6.1%, which was the lowest since the Bureau of Labor Statistics began measuring unemployment in this community 22 years ago, according to the report.
The downward trend likely reflects in part the disproportionate number of Native Americans working in manufacturing and construction — industries that have done well through much of the pandemic, says Jay Bryson, chief economist for the bank. company and investment company Wells Fargo and co-author of the report.
“Over the past two years…Americans have spent far more on goods than on services,” he says. And while the housing market recently weakened as the Fed raised interest rates to curb inflation, during the “first two years of the pandemic…housing was very, very strong.”
Rise in Native American employment could reverse in recession
When the U.S. economy largely shut down at the onset of the global health crisis, resulting in the loss of millions of jobs, Native American unemployment jumped, reaching nearly 29% in April 2020. That was more than double the national rate of 14.4%.
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“We haven’t seen a 30% unemployment rate since the 1930s,” Bryson says. “So those first few months were, in many ways, a depression for the Native American community.”
Yet, from 2019 to 2021, the employment rate among Native Americans increased by 15%, according to the report. This rise could, however, reverse if the United States enters a recession, says Bryson.
As the housing market cools, which could lead to fewer homes being built, “you can expect to see layoffs…and that will fall disproportionately on Hispanics and Native Americans just because of their concentration” in jobs, says Bryson.
Also, unlike the pandemic-related slowdown, a more typical recession will likely lead consumers to spend less on goods. So not only will the unemployment rate among Native Americans likely rise, Bryson says, “it will rise more than the overall unemployment rate.”
Native American population is younger and growing faster
Although a recession may temporarily slow the economy, the recent labor shortage that has made it difficult for some businesses to find workers will likely still be a challenge once it is over, Bryson says.
Native Americans, whose numbers are growing at a faster rate than the overall population and who also tend to be younger, could help boost the labor force, especially in states where they make up a larger share of residents, says -he.
“Once we get through the recession and things start to grow again, I think you’ll generally be dealing with a relatively tight labor market,” Bryson says, “because we don’t have the population growth or the immigration to back it up. And given that Native Americans are younger than the overall population and the population is growing faster… we think that bodes well for their longer-term employment.
In the decade between 2010 and 2020, those who said they were only Native American or Alaska Native increased by 27%, more than three times the growth rate of the general population, according to Wells Fargo.
And the median age of Native Americans is 32 compared to the general population, which has a median age of 39. Early estimates from the 2020 decennial census also found that 32% of Native Americans were under the age of twenty compared to a quarter of all Americans.
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Native Americans have obstacles but can increase manpower
But there are broader issues that fuel an unemployment rate among Native Americans that remains roughly double the rate for the overall population.
According to the Wells Fargo report, about 3 in 4 American Indians or Alaska Natives complete high school within four years of starting ninth grade, compared to 86% nationally. And among Native Americans aged 3 to 18, 83% are able to connect to the Internet, compared to 95% for all Americans.
“To fully participate in future expansions, we need to be able to address some of these issues,” he says. If “6% of the Native American population is looking for a job and they don’t have the skills required for the job, then it’s not just a concern for the people involved…we don’t produce as many goods and services as we otherwise would.”