[NJFAC] How Good and How Bad Are American Job Markets? Here’s a Checklist

How Good and How Bad are American Job Markets?

Here's a Checklist                                                          

            In short, job markets have improved in recent years, but we are nowhere near full employment and decent wages for all. Here are the basic numbers. There's not much about subgroups. More on them in another piece.         

Recent Good News: Median household income was up 5.2% in 2015. Percentage gains higher at the bottom than at the top. More people with jobs helped. Largest single-year increase since record-keeping began. But in real terms, the median was still below 2007 and still below the peak of the late 1990s. And, of course, pay, household incomes, and wealth shares are massively unequal, especially for minorities.

Poverty rates fell from 15% in 2010-2013 to 13.5% in 2015. The lowest ever was 11.1% in 1973. We've come close to that a couple of times, but we won't get there soon. It's worse for some people. Of African Americans 22.7% are below the line and of Hispanics 21.4%.  That's not all. American poverty lines are antiquated, almost an insult to our intelligence. A family of four with two kids needed just a dollar more than $24,036 to be non-poor in 2015. Really? Common sense and serious budget studies say that the lines should be doubled.  

Real Hourly Wages:  Of late, we have seen a rising trend for wages. That's positive, but will the trend last? We have a long way to go. Real wages often fell in the 1970s and 80s, stagnated for much of the 90s, and increased at times in the 2000s. But we have just gotten back  to the wage levels of 1972-1973. In terms of real pay, average workers are no better off than their counterparts of forty years ago.

Unemployment and Job Creation. Getting Better but a Long Way to Go: Unemployment is around 5%. That's better than 10% in the Great Recession. But not close to full employment as some experts, including some at the Federal Reserve, want you to believe. Here's why.  

a. In September of 2016, we still had 5.9 million people who worked part-time but wanted full-time work. These people cannot find full-time jobs but they are not counted as unemployed.

 b. In September of 2016, we had 6.1 million people who said they wanted a job but had not searched for one recently. More of these people would have jobs in a stronger economy, and many more people would be looking for work if they felt they could find a half-way decent position. None of these people are counted as unemployed. A relative handful--553,000-- are called "discouraged workers", but I think many more of the 6.1 million and others who aren't in any survey are truly discouraged about their prospects of landing a decent job.

 c.  Job totals in monthly reports from several hundred thousand businesses and governments show that we are about 5 million jobs short of where we would be if we had not had a big recession and a weak recovery. In 2013, 2014, and 2015, there was pretty strong demand for labor and we added between 2 and 3 million jobs a year. But we need much higher totals for many years if we are to clear up both official and hidden unemployment and get to Real Full Employment, something around a 2% unemployment rate.

 d. Here's a striking fact about job totals which indicates how they lag. In the last ten years job totals grew by 6%. That is the worst record of the last seventy years. Here are the increases in job totals between starting and ending years for ten-year periods.

                                                2006 to 2016      6%

                                                1996 to 2006:   15%

                                                1986 to 1996:   20%

                                                1976 to 1986:   26%

                                                1966 to 1976:   26%

                                                1956 to 1966:   20%

                                                1946 to 1956:   30%                        

Participating in the Labor Force (working or looking for a job): The participation rate of women tapered off in 1999-2000, fell in the recession and has not come back. Men's rate has been on a long decline that grew steeper in the Great Recession. Part of the decline comes because we have more people of retirement age. But much of it has to do with lousy job markets, low wages, and, perhaps, the expansion of disability benefits. For prime-age males (ages 25 to 54), the labor force participation rate has fallen from 97% in 1948 to 89% in 2016. 

Some non-participants have lost jobs due to plant closures and mine shutdowns. Some of them did not move to regions
with more jobs because they felt too old and too rooted to move; because they could not sell their homes except at a big loss; or because they weren't convinced there were decent jobs elsewhere. Some have become hooked on opioids and they are
killing themselves.

Too Many Numbers? Here's the Big Take-away: In most areas discussed above we are doing better, but reversing the impact of forty years of lousy wages, rampant inequality, dire poverty, and not enough jobs will require major federal action on job creation, big increases in the minimum wage, fair taxes, and more assistance to low income families and college students. 

Frank Stricker is Emeritus Professor of History, California State University, Dominguez Hills. He has written about poverty and has written American Unemployment: A New History, Explanations, Remedies. He is a member of the National Jobs for All Coalition.

 

 

 

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