Job Losses Hit Black, Asian, and Hispanic Workers Hard, Raising Concerns for All Americans

While headlines this year have focused on the overall jobs picture, hidden in plain sight is a troubling fact: while white workers have seen a slight downtick in unemployment since April, job losses among Hispanic, Black, and Asian American workers are all up significantly since April.

The socioeconomic forces behind these disparities—industry concentration, a legacy of discrimination, and education gaps—are long-standing, structural, and mostly unchanged. However, that doesn’t mean there aren’t new hurdles.

“What’s unique about the current moment is that so much of the damage is self-inflicted,” Valerie Rawlston Wilson, director of the program on race, ethnicity, and the economy at the Economic Policy Institute, told Investopedia. “Massive cuts to the federal workforce, historically high and broad tariffs, and mass deportations are all policy changes that happened quickly and in a highly chaotic way, creating an environment of uncertainty that dampens economic growth.”

A Tale of Two Job Markets

U.S. employment data reveals growing divergences in U.S. unemployment. While the national unemployment rate stood at 4.3% overall in August, among Black workers, the unemployment rate jumped to 7.5%—an increase of 25% since May.

“No other racial/ethnic group has seen a decline in employment of that size this year,” Rawlston Wilson said. “The share of employed Black Americans, age 25-54, is down significantly compared to the historically high rates in 2024. The average so far in 2025 is 76.6% compared to 77.9% by this time last year.”

For Hispanic and Asian workers, the unemployment rate rose to 5.3% and 3.7%, respectively, up 10% for both groups since April. Meanwhile, unemployment among white workers ticked down, from 3.8% to 3.7% over the same time span.

These gaps persist despite strong workforce engagement. Black people have a labor force participation rate of 62.6%, higher than that of their white counterparts at 61.8%, while the rate for Hispanic people is 67%. This means these communities aren’t sitting on the sidelines—they’re actively seeking work but finding fewer opportunities, making the unemployment disparities even more troubling.

For women, the picture is starker. Black women’s unemployment was at 6.7% in August, double the 3.2% rate for white women. In fact, as a recent analysis by Wilson noted, “the decline in Black workers’ employment appears to be concentrated among Black women while Black men’s employment rates appear more stable.”

Historical Patterns

This is not the first time racial unemployment gaps have existed or grown. Indeed, unemployment rates for Black and Hispanic workers are often higher than for other groups, and that gap typically widens during downturns.

The Great Recession of 2008–2009 is a good example. Unemployment spiked across the board, but was much higher among workers of color. Black and Hispanic unemployment hit 16% and 12.5% in 2010, respectively, while the rate for white workers had only increased to 8.7%. Indeed, over the 47 years from 1972 to 2019, Black unemployment was almost double that of white workers.

Structural Concerns

“The current racial employment gap can be primarily attributed to long-standing structural factors,” Rawlston Wilson said. Here are some of them:

• Last hired, first fired: Minorities often face measurable discrimination that limits their access to older adult positions and higher-wage roles. This leaves many concentrated in entry-level or mid-tier positions that offer less protection during layoffs. Combined with lower average seniority, minority workers frequently become the first casualties when companies retrench.
• Industry concentration: Historical patterns and ongoing barriers have created an uneven distribution of workers across industries. Black workers are overrepresented in government, manufacturing, and service sectors, while Hispanic workers are overrepresented in hospitality, agriculture, and construction. Each is more vulnerable in downturns, and cuts to the federal workforce have been significant this year, even before any recession has occurred.
• Geography: State and regional disparities can be larger than national averages. For instance, in Washington, D.C., even during economic expansions, Black unemployment has been seven times higher than white unemployment.

“Without appropriate actions to address those factors, any new economic developments are likely to have a disparate impact,” Rawlston Wilson said. “Dismantling the policies, programs, and institutions designed to reduce inequities will widen those gaps moving forward.”

Effects of Federal Cuts, AI, Tariffs, and Inflation on Jobs

Additional forces are at play in 2025, each magnifying existing job market inequities:

• The Trump administration’s federal jobs cuts have had an effect, with an estimated 275,000 employees already having left government service through September 2025. These job losses disproportionately impact Black workers, who make up 18.5% of the federal civilian workforce compared with 14.8% of the general population, with some agencies like the departments of Education, Treasury, and Housing and Urban Development employing Black workers at rates of one-third or higher.
• Tariffs on imports are rippling through manufacturing, construction, and retail. At the same time, higher input costs are reducing the purchasing power of households and businesses, and production has been slow to rebound. In this way, tariffs are acting like a tax on jobs as well as household budgets. And, many of the industries hit hardest disproportionately employ higher shares of Hispanic and Black workers.
• Automation and AI are thought to be displacing jobs that involve routine clerical tasks, logistics, and customer service work. While AI can augment white-collar jobs like software programming and professional services, front-line service jobs are being automated more quickly. As a result, the workers now being replaced by AI are more likely to be minorities.
• Inflation has been stubborn. While prices have come down somewhat from post-pandemic highs, they remain elevated. Black and Hispanic families tend to spend a higher share of their income on necessities, so they are more likely to be harder hit by inflation and higher interest rates. Higher rates also dampen hiring in construction and real estate, sectors where Latino workers are disproportionately employed.

The Bottom Line 

In 2025, new headwinds from tariffs, AI-driven automation, and inflation are impacting front-line and lower-wage jobs where workers of color are overrepresented. Black, Hispanic, and Asian workers make up about one-third of the U.S. workforce, so when they are not working, not only do they face problems, but the entire U.S. economy does. Consumer spending, productivity, and tax revenues all take a hit, slowing growth and recovery for everyone.