A cooling economy combined with an aggressive retreat from diversity and inclusion is pushing Black women out of the workforce at rates not seen in decades.
The U.S. economy has been cooling for months. Inflation on essential goods remains stubborn, interest rates are still high, wages have flattened, and working families across America feel the pressure. But while the slowdown affects nearly every demographic, no group is being hit harder—or with more lasting consequence—than Black women.
In 2024, Black women reached a historic high in labor-force participation, buoyed by strong demand in education, public service, health care, and service-sector employment. They were earning degrees at record rates, starting small businesses faster than any other demographic, and maintaining some of the highest work-participation levels among all women. For a moment, it seemed like progress was not only possible, but durable.
That is not the case today.
A Sharp Labor-Force Exit
Since January, Black women have been leaving the workforce at levels that economists describe as “alarming” and “unprecedented in recent years.” Hundreds of thousands have exited the labor market or lost employment, a trend outpacing every other demographic group. Unemployment for Black women has risen steadily—higher and faster than for men, white women, or Latina workers. And the sectors where Black women have historically been overrepresented—public education, federal and state employment, health care support, childcare, retail, and hospitality—are either cutting back, reorganizing, or freezing hiring.
In other words: the floor has dropped out from under the very workers who have long held up the American workforce.
There is a straightforward economic story here about slowing job growth and declining consumer demand. But there is also a deeper story—one with structural and political roots—that is making the burden on Black women uniquely heavy.
The DEI Rollback Is a Workforce Issue
As the economy contracts, the federal government and many state institutions are simultaneously retreating from decades of diversity, equity, and inclusion efforts. From universities being threatened with funding cuts if they openly engage in DEI efforts to Fortune 500 corporations, everyone is running scared. This is not the 2020 post-George Floyd push for more diversity and equality, which was at the top of every corporate and university agenda. Fast forward to 2025, multiple agencies have removed DEI guidance from their websites, paused hiring initiatives meant to recruit underrepresented groups, or dismantled internal structures that once ensured equitable review of personnel decisions.
A recent independent analysis found that the current federal administration is the least diverse in the 21st century, with roughly nine out of ten confirmed appointees being white and only a fraction being women. For Black women—who have long relied on public-sector jobs as pathways to stable, middle-class livelihoods—this shift is not abstract. It is foundational.
When federal leadership becomes less diverse, the ripple effects extend far beyond symbolism. Public-sector hiring trends change. Enforcement of workplace discrimination rules shifts. Contracting priorities get redirected. The networks that help women of color enter and advance inside government agencies thin out or disappear. And in a period of economic fragility, those institutional changes amplify the instability already facing Black women in the broader labor market.
A Perfect Storm of Economic Pressures
Part of why Black women are being disproportionately affected is simple: they remain overrepresented in industries that experience early contractions during economic downturns. Public-service institutions tighten budgets. School districts cut staff. Hospitals reduce support roles. Retail and hospitality slow their hiring. When these pressures hit simultaneously, Black women—who make up significant portions of these workforces—absorb the brunt of the losses.
Worse, the US Department of Education announced last week that Nursing will no longer be considered a profession that qualifies for federal loans above a certain amount. This move is likely to hurt opportunities to recruit nurses of color, from working-class backgrounds, who still make up less than 10% of Nurses in the United States.
Layered on top are longstanding structural inequities. Black women still earn significantly less, on average, than white men for the same work. They hold far less household wealth, meaning they have smaller financial buffers to weather periods of unemployment. They are more likely to head households alone and more likely to carry caregiving responsibilities for children, aging parents, or extended family.
This combination—high work participation, lower wages, limited savings, and heavy household responsibility—creates what many economists now call the “triple economic tax” on Black women:
- The Pay Tax – earning less for the same work.
- The Care Tax – shouldering disproportionate family responsibilities.
- The Safety Tax – facing higher risks of housing instability, healthcare gaps, and economic insecurity during downturns.
When the economy softens, those overlapping burdens become crushing.
Backlash Meets Reality
The backlash against DEI does not exist in a vacuum. It exists in an economy where the gains of 2020–2022 have evaporated, and where Black women—despite being among the most educated and entrepreneurial groups in the country—are experiencing declining opportunity.
What’s often lost in the debate is that DEI is fundamentally a workforce strategy. It ensures that hiring, advancement, and retention are not shaped by bias. It helps place talented workers of color into leadership pipelines. It supports equitable contracting and procurement practices. It encourages inclusive work environments that reduce turnover. It strengthens the middle class.
When DEI is stripped away during a downturn, the impact is multiplied. Economic contraction worsens. Mobility stalls. Entire sectors become less representative of the public they serve.
And for Black women—already navigating an economic landscape filled with headwinds—its absence is felt immediately.
Why This Matters for America’s Economic Future
Black women are not a marginal demographic. They are a cornerstone of America’s workforce, a stabilizing presence in volatile labor markets, and a driving force in entrepreneurship and higher education. Their economic well-being is not just a matter of equity; it is a matter of national economic health.
When Black women leave the workforce, families lose income. Communities lose stability. Small businesses lose customers. Employers lose talent. States lose tax revenue. And the national economy loses one of its most reliable pillars of labor, productivity, and consumer spending.
Ignoring this trend is not just shortsighted—it is economically costly. If the United States hopes to navigate an era of technological disruption, demographic change, and geopolitical uncertainty, it cannot afford to sideline the very workers who have consistently shored up its economic resilience.
The Path Forward
Strengthening childcare access, protecting public-sector jobs, restoring DEI infrastructure, expanding small-business capital pipelines, and raising wages in caregiving and education are not “nice-to-have” policies. They are economic imperatives.
If the economy is going to recover in a way that is broad, durable, and fair, Black women must be at the center of that recovery, not its casualties.
America has weathered downturns before. But we have never recovered by leaving our most essential workers behind.