By: Stacy M. Brown, NNPA Newswire Senior National Correspondent
Black unemployment surged to 7.5 percent by December 2025, a level that would signal a recession if it were reflected across the national workforce. But the latest “State of the Dream 2026” report makes clear the damage extends far beyond jobs. From broadband access and housing to artificial intelligence and federal workforce policy, the Joint Center for Political and Economic Studies finds that 2025 marked a sharp economic breakdown for Black America driven by policy reversals and the removal of long-standing safeguards.
Released this week, “State of the Dream 2026: From Regression to Signs of a Black Recession” draws on research from the Joint Center and partners including United for a Fair Economy, the Center for Economic Policy Research, the National Community Reinvestment Coalition, and the Onyx Impact Group. The report situates rising unemployment within a wider retreat from equity-focused policy across nearly every sector shaping economic opportunity.
Employment remains the most visible signal. Black unemployment rose from 6.2 percent in January 2025 to 7.5 percent by December. Black youth experienced severe instability, with unemployment spiking from 18.6 percent in September to 29.8 percent in November before falling back to 18.3 percent in December. The report finds that if Black workers had maintained their 2024 prime-age employment rate, roughly 260,000 more Black adults would have been working in 2025, including about 200,000 prime-age Black women.
The collapse of federal employment accelerated the trend. Roughly 271,000 federal jobs were eliminated in less than a year, hitting Black workers particularly hard because they have historically been overrepresented in government roles offering stable wages, benefits, and protections. Before the cuts, Black Americans made up nearly 19 percent of the federal workforce, compared with about 13 percent of the overall labor force.
“Federal employment has historically functioned as an important sector for Black workers,” the report notes, warning that buyouts, hiring freezes, and the dismantling of diversity-focused recruitment pipelines removed one of the most reliable pathways to middle-income stability.
Tax policy deepened the strain. The One Big Beautiful Bill Act of 2025 made permanent tax cuts for high-income households and corporations while reducing investment in poverty-alleviating programs. Business preferences such as Section 199A, bonus depreciation, and estate tax benefits overwhelmingly favored wealthy households, while refundable credits that matter most to Black workers were left unchanged.
Black-owned businesses faced a parallel contraction. Executive orders issued early in 2025 redirected federal support away from disadvantaged firms, lowered small, disadvantaged business contracting goals, and moved to dismantle the Minority Business Development Agency. The Joint Center estimates these actions threaten $10 billion to $15 billion annually in lost federal support for Black-owned firms. At the same time, the U.S. Treasury Department’s Community Development Financial Institution Fund, a key source of capital for minority businesses, was defunded.
Beyond jobs and business, the report documents setbacks in broadband policy that risk widening the digital divide. The cancellation of the Digital Equity Act, the removal of mobile hotspots and school bus Wi-Fi from E-Rate eligibility, and weaker broadband pricing transparency requirements undercut efforts to expand internet access and adoption in Black households.
The information environment also shifted. While federal social media policy remained largely unchanged, platforms themselves pulled back on fact-checking and content moderation. The report notes that these platform-driven decisions reshaped the online information ecosystem, raising concerns about misinformation and its impact on communities that already face barriers to accurate and timely information.
Artificial intelligence policy marked another turning point. A new executive order titled “Removing Barriers to American Leadership in Artificial Intelligence” moved federal policy away from precautionary regulation toward a deregulatory, innovation-first approach. The report warns that unchecked AI deployment risks embedding bias into hiring, lending, housing, and public services without accountability.
Workforce policy changes further reinforced inequality. While apprenticeship programs expanded, initiatives designed to advance African American workforce participation stalled or were cut, setting the stage for reinforcing racial disparities rather than closing them.
Housing remains one of the most entrenched fault lines. U.S. Census Bureau data show Black homeownership at 45 percent compared with 74 percent for white households, a nearly 30-point gap that has persisted for generations.
“At a moment when hard-won rights and safeguards are being eroded, rigorous analysis is essential to building a fair economy,” Joint Center President Dedrick Asante-Muhammad said in the report.
