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Labor Secretary Thomas Perez discussed the structural economic difficulties in Baltimore and other cities in an appearance on MSNBC's "Morning Joe." Labor Secretary Thomas Perez discussed the structural economic difficulties in Baltimore and other cities in an appearance on MSNBC's "Morning Joe."

Labor Secretary Thomas Perez discussed the structural economic difficulties in Baltimore and other cities in an appearance on MSNBC's "Morning Joe."

Louis Jacobson
By Louis Jacobson May 15, 2015

Labor Secretary Thomas Perez weighs incarceration's role in inner-city Baltimore's bleak job picture

When Baltimore erupted into riots after the death of 25-year-old Freddie Gray, who had been taken into police custody, many politicians addressed deep-seated economic problems affecting some of the city’s poorest neighborhoods.

On MSNBC’s Morning Joe on May 7, 2015, co-host Mika Brzezinski asked U.S. Labor Secretary Thomas Perez what could be done to increase economic opportunity and stability in low-income urban areas in Baltimore and the rest of the country.

"First of all, the over-incarceration that you've talked about on this show so compellingly, you see it in Baltimore city," Perez said. "In 1950, two out of three young black men were in the workforce. Today, it's one out of three black men are in the workforce. The incarceration challenges -- there are so many people who lack a role model and they lack a bread-earner in their family. And so we spend a lot of time talking about how do we help people who are coming out of prisons to get those skills and jobs to compete."

We were struck by the claim that "in 1950, two out of three young black men were in the workforce. Today, it's one out of three black men are in the workforce," and especially by how much had to do with "over-incarceration."

When we looked through the data and talked to economists, we found that Perez had a reasonable point to make but that the numbers he cited glossed over some important complicating factors.

Looking at Perez’s data

When we checked with Perez’s office, a spokesman said his comment referred to data cited by Jason Furman, the chairman of President Barack Obama’s Council of Economic Advisers in a 2014 speech at the Brookings Institution.

In that speech, Furman cited the employment-to-population ratio for black men ages 16-24 for both 1950 and the second quarter of 2014. The employment-to-population ratio, which economists call EPOP for short, is a rough measure of how common it is for a population to be working. In most cases, a higher EPOP is preferable to a lower one, because it indicates that more of the population is engaged in productive economic activity.

According to Furman, in 1950, the EPOP for black men from that age group was 65 percent, which is close to the "two out of three" that Perez cited. In the second quarter of 2014, according to Furman, the rate had fallen to 37 percent, a little higher than the "one out of three" that Perez cited. So on the numbers, Perez was close.

But we found some caveats that weaken the usefulness of those numbers for making his case.

This calculation ignores a great increase in educational opportunity for young black men. Remember how we said "in most cases" a higher EPOP is better than a lower one? Well, there are certain situations in which that’s not necessarily the case.

Back in 1950, a large share of young black men faced Jim Crow policies and poor educational options, leaving them with little alternative but finding a job. This would tend to raise the EPOP for young black men, but for a reason we would consider negative. While educational opportunities for young black men today are far from perfect, they are nonetheless much improved. The data shows that in 1972, the oldest year available, 21 percent of black men were in college; by 2012, that had risen to 34 percent. And black high school dropout rates have fallen over the same period. If you were to start the statistical clock at 1950, the improvement might be even more dramatic.

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In other words, increased educational opportunity and attainment among young black men -- which is usually a positive development -- almost certainly accounts for part of the decline in EPOP. This "should mitigate our concern about the declining rates of young black men," said Gary Burtless, a Brookings economist.

Burtless did emphasize, though, that it’s hard to know how much concern should be mitigated by the expansion in educational opportunity, since other, more negative trends -- such as incarceration -- have also likely contributed to the decline in employment among young black men. Indeed, Perez’s office noted that the decline in EPOP was twice as big among young black men as it was for another group that saw increasing enrollment -- young white men.

All of the data Perez cites actually excludes incarcerated individuals. For various technical reasons, federal labor-force statistics tend to look only at the "civilian, non-institutionalized population." For starters, this means that those employed in the military are excluded from the calculation -- not a trivial factor in this case, since blacks were underrepresented in the military between 1940 and 1973 but overrepresented in more recent years.

The more important consequence of this methodology is that individuals who are incarcerated aren’t counted in the statistics Perez cited, even though his comment seemed to link "over-incarceration" with the statistical comparison. Perez’s office did note that the statistics do capture people who were previously incarcerated and are, as a result, put at a disadvantage once they re-enter society and the labor market.

That’s correct, but once again, the picture is more nuanced on this point than Perez let on in his interview.

Where Perez has a point

At the same time, several economists told us that even if Perez used a questionable statistic in making his point, the point he was trying to make had merit.

"In general, my impression is that Perez is pointing to a serious social problem, even if his statistics are a bit off or poorly defined," Burtless said. Since the 1950s, "young black men have been less likely to find and hold jobs, and one reason is that they are more likely to have become entangled with the criminal-justice system, making it harder for them to get job offers." In addition, he said, "the neighborhoods of a lot of black youth are often some distance from where there are plentiful job openings. Whatever the reasons, black male youths nowadays have fewer connections to the job market and more to the criminal justice system than was the case in the 1950s and early 1970s."

Tara Sinclair, a George Washington University economist, agreed that Perez had a point. "What he was saying was reasonable, even if he did not use the right statistic to back it up"

Our ruling

Perez said due to "over-incarceration … in 1950, two out of three young black men were in the workforce. Today, it's one out of three black men are in the workforce."

Perez has a point that incarceration has made it harder for many young black men to find jobs. Perez’s problem was choosing a statistic that doesn’t precisely support his point. The decline in employment rates for young black men stems at least partially from improved educational opportunities -- which is generally a positive development -- and the data he offers specifically excludes currently incarcerated individuals.

The claim is partially accurate but leaves out important details, so we rate it Half True.

Our Sources

Thomas Perez, interview on MSNBC’s  Morning Joe, May 7, 2015

Jason Furman, "Opportunities and Challenges in the U.S. Labor Market" (speech at the Brookings Institution), July 17, 2014

National Center for Education Statistics, "Table 302.60 -- Percentage of 18- to 24-year-olds enrolled in degree-granting institutions, by level of institution and sex and race/ethnicity of student: 1967 through 2012," accessed May 14, 2015

U.S. Census Bureau, "Table A-5b. The Population 18 and 19 Years Old by School Enrollment Status, Sex, Race, and Hispanic Origin: October 1967 to 2013," accessed May 14, 2015

Amy Lutz, "Who Joins the Military?: A Look at Race, Class, and Immigration Status," Winter 2008

Interview with Tara Sinclair, economist at George Washington University, May 11, 2015

Email interview with Justin Wolfers, senior fellow at the Peterson Institute for International Economics and economist at the University of Michigan, May 11, 2015

Email interview with Gary Burtless, senior fellow at the Brookings Institution, May 11, 2015

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Labor Secretary Thomas Perez weighs incarceration's role in inner-city Baltimore's bleak job picture

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