The time-honored pattern of American economic cycles is that recessions are worse for black workers, and recoveries are worse for black workers, too.  As this recovery gains momentum, and the labor market starts to look more normal, a new report offers a reminder that black workers once again are lagging behind.  The unemployment rate for black workers rose faster during the Great Recession and, over the last five years, it has receded more slowly.  The rate for black workers remains 1.3 percentage points higher than on the eve of the recession in December 2007, while for white workers it is 0.5 points higher.  Black workers have also suffered twice as large a reduction in median hourly wages: down 3.6 percent for black workers; 1.7 percent for white workers.  The report, by the Center for Popular Democracy, a liberal advocacy group, and the Economic Policy Institute, a liberal think tank, is part of a broader campaign to persuade the Federal Reserve to persist in its economic stimulus campaign.  “The Federal Reserve needs to craft monetary policy that tightens the labor market sufficiently so that all Americans, and African-Americans in particular, have an opportunity to benefit from the shared prosperity that a full-employment economy provides,” the two groups argue in the report, which presents unemployment and wage data for each of the Fed’s 12 regions to put a local face on the problem.  It’s not obvious, however, that holding down borrowing costs for a little longer would be an effective way to address the underlying problem. Indeed, the problem is a good illustration of the limits of monetary policy.  Unemployment among black workers is perpetually higher than unemployment among white workers. The magnitude of the differences varies widely among the states, but the lowest level of black unemployment in any state last year, the 8 percent rate in Virginia, was still higher than the highest rate of white unemployment in any state, the 7 percent rate in Nevada. (The Bureau of Labor Statistics reports black unemployment rates for only 28 of the states.)  The résumés of black workers, on average, are less competitive. For example, they are less likely to have a college education. And as I wrote in Sunday’s paper, black men in particular are more likely to have been convicted of a crime.  They are more likely to live in lower-income communities where jobs are harder to find. Living in these places may also make it harder for workers to obtain a good education, and easier to run afoul of law enforcement.  And simply being black makes it harder to find a job. In the careful language of economics, the other factors don’t explain the entire pattern.  The same factors help to explain why black workers are quicker to lose jobs and slower to return to work.  Any given level of economic stimulus, as a result, helps black workers less than it helps white workers. And it follows that the level of stimulus necessary to reduce excessive black unemployment may well be excessive for the economy as a whole.  Fed officials have said repeatedly in recent years that the economy has many problems they cannot solve. Other parts of the government, through fiscal and regulatory policies, have many more levers to address the problems of particular communities.  The Fed has a hammer, and, as the saying goes, not all problems are nails.
The particular challenges facing black workers cannot be solved by monetary policy and in fact are an illustration of its limits.