The Labor Market Still Stinks… Despite a Good Jobs Report
According to an article that appeared on Yahoo last week, Rick Newman says we need to look below and behind the numbers to see what’s really going on in the jobs market. (Read article here.) The chart below, put out by the Bureau of Labor Statistics, does a good job of presenting his case.
While the unemployment rate hit 5.9% for the first time since 2007, there are many underemployed and folks who have just dropped out of the workforce.
| Dec. 2007 | Now | Change | |
| Total number of jobs | 146.3 million | 146.6 million | 300,000 |
| Total number of unemployed | 7.6 million | 9.3 million | 1.7 million |
| Unemployment Rate | 5.0% | 5.9% | 0.9 percentage points |
| U-6 unemployment rate (unemployed + underemployed) | 8.8% | 11.8% | 3 percentage points |
| Average hourly earnings, adjusted for inflation, 2014 dollars | $24.33 | $24.53 | $0.20 |
| Employed part-time for economic reasons | 4.6 million | 7.1 million | 2.5 million |
| Employed part-time for economic reasons, pctg. of the labor force | 3.0% | 4.6% | 1.6 percentage points |
| Labor force participation rate | 66.0% | 62.7% | -3.3 percentage points |
Source: Bureau of Labor Statistics
While there are no easy answers to unemployment and underemployment, we should know that this isn’t just a problem in the U.S. but in many, many countries around the world. In fact, compared to many other countries, our employment rate is really good.Two major problems for those working or those that want to work or want to work more hours:
- unemployment and underemployment among those in their teens and twenties is still very high
- wage increases have been very low, not giving workers enough money to spend and prop up the economy
In fact, wages have been stagnant when adjusted for inflation for over 25 years, and nothing appears on the horizon that will alter this long term trend. At least there’s plenty of political rhetoric for the next three and a half weeks to amuse us.
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