US workforce system restricts opportunities through racial discrimination: report

A new report from the Joint Center for Political and Economic Studies has found that the US public workforce system may be perpetuating racial inequities in employment for Black Americans.

The workforce system "exacerbates these disparities by steering Black workers into low-wage opportunities with minimal career advancement and economic mobility," the report found.

Its analysis highlighted a possible solution in "sector partnerships" - collaborations between employers in the same industry, with educational institutions, community-based organisations, and unions - to develop workers' skills and connect them with potential employers.

"[The] model has shown it can increase pay and job retention for Black workers," said Justin Nalley, senior policy analyst at the Joint Center.

The Workforce Innovation and Opportunity Act, signed into law July 2014, requires local and state workforce boards to collect and analyse regional labour market data to develop "sector initiatives for in-demand industry sectors or occupations."

However, the Joint Center said there is no federal data that details the outcomes for Black Americans in work programs because collecting and reporting racial demographics is not a requirement at the state level. Black Americans comprise 13% of the workforce, according to the Bureau of Labor Statistics.

The Department of Labor did not immediately respond to a request for comment.

Sector partnerships are not funded within the WIOA. While workforce boards must have partnerships in the strategic development plan, "there's no funding attached to it," Nalley said, adding that discriminatory hiring practices also hinder progress.

Federal and state agencies that oversee anti-discrimination policies, like the US Equal Employment Opportunity Commission, are underfunded, according to Algernon Austin, director of the Center for Economic and Policy Research.

"Our ability to identify and counteract discrimination in the labour market has been systematically weakened over time," Austin said, adding underfunded enforcement leaves accountability gaps for inequitable outcomes.

The EEOC said in a statement that while it has "implemented efficiencies," it has recovered "significantly more in monetary benefits for victims of discrimination each year than our budget—$665 million in FY 2023 alone."

The US House of Representatives passed legislation to reform the WIOA in April. The bipartisan bill, A Stronger Workforce for America Act, aims to expand workers' skills development.

The Joint Center said WIOA-eligible training programs prepare Black workers for low-level jobs where participants would make an average of less than $40,000 annually.

A US Department of Labor 2021 study on the wage-growth trajectory of American workers in training programs, including sector partnerships, showed Black workers earning $2.46 to $15.50 less per hour than white colleagues after entering the transportation, production, healthcare and agriculture fields. By 10 years in the workforce, white workers' wages grow approximately 28% more than Black counterparts.