Sure and Steady Jobs Gains
Latest Employment Numbers Point to Continued Economic Recovery
SOURCE: AP/Damian Dovarganes
See also: The ‘Man-covery’ by Heather Boushey
This article was originally published on Marketwatch.
The good news evident in the latest jobs numbers released today is that our economy is adding jobs at a steady pace. The share of Americans with a job in February edged up to 58.6 percent, higher than it’s been since June 2010. The economy added 227,000 jobs in February, on top of upward adjustments of a total of 61,000 by the Department of Labor over the past two months. Unemployment held steady at 8.3 percent because more out-of-work Americans are now more confidently returning to the job hunt.
Make no mistake—this is a sure and steady progress that Congress needs to support in order to maintain the momentum of the ongoing economic recovery and to ensure that a still-unacceptable 8.3 percent unemployment rate falls in the coming months. Today’s data from the Bureau of Labor Statistics show that the private sector has added jobs every month since March 2010, with 245,000 jobs added on average over the past three months. There has been steady progress to bring unemployment down from its peak of 10 percent in October 2009—a testament to the success of the American Recovery and Reinvestment Act—but those gains would have been much stronger had conservatives not blocked efforts to invest in much-needed infrastructure repair. This should be their focus for the rest of the year.
Another contributor to the less-than-robust jobs gains is budget-driven cutbacks by state and local governments, which have been hemorrhaging workers, shedding more than 647,000 since August 2008. Much of the public sector lay-offs have hurt female workers, especially as women have lost 416,000 state and local government jobs. This shows up in the employment data: For adult men the share employed is 67.7 percent, higher than at any time since June 2009 when the Great Recession ended, while for adult women the share employed is still hovering near recession lows of 55 percent.
Government lay-offs are a key reason for the relatively weak jobs recovery. Economist Paul Krugman estimated that if all government spending during the current economic recovery (since June 2009) had followed the same rate of growth as spending during the same time period for the economy recovery in the early 1980s—following the 1981–1982 recession during the presidency of Ronald Reagan—then spending would be almost 15 percent higher than it currently is.
Government spending is important because it helps shore up demand. The National Federation of Independent Businesses, an organization for employers with 40 or fewer workers, continues to report that sales are the most important concern for their members, as has been the case since July 2008. Poor sales closely track the unemployment rate. This is exactly the problem addressed by the Recovery Act in 2009 and in the proposed American Jobs Act, which President Barack Obama put on the table in September 2011 but which Congress has mostly ignored due to stubborn resistance by House Republican leaders.
Men are doing better in this economic recovery because of a key bright spot in today’s report—the continued job gains in manufacturing. Manufacturing added an average of 37,000 jobs over the past three months. Durable goods have added 444,000 workers since the trough in January 2010, and overall manufacturing has grown by 3.7 percent since then—the fastest pace since the economy pulled out of the early-1980s recession. This has helped men recover from the tough job losses in this sector during the Great Recession. Increased employment in durable goods is driving the strong gains.
The temporary-help sector continued to show strong job gains in February, adding 45,000 jobs with an average of 32,000 over the past three months. While overall average hours-worked did not increase, manufacturing hours rose by 0.1. These two facts combined do indicate some tightening of the labor market, which may be a harbinger of improved employment in the months to come.
While the headline number shows steady, although tepid, job gains, the data reveal a number of areas of continuing concern. The unemployed are still having a historically hard time finding a job after a spell of unemployment. There are nearly four workers for every job opening, and the share of the unemployed who have been out of work and searching for a new job for more than 26 weeks was 42.6 percent in February. Prior to the Great Recession, that share had never risen above 26 percent.
Less-educated workers and workers of color continue to see higher unemployment than higher-educated and white workers. In February the unemployment rate for workers with a college degree was 4.2 percent, while it was 8.3 percent for those with a high-school diploma. White unemployment has fallen by 0.1 percentage points to 7.3 percent, while for African American workers it rose by 0.5 percentage points to 14.1 percent.
Wages grew by an annualized quarterly rate of 1.4 percent, about half the rate of inflation as measured by the Consumer Price Index for Urban Consumers of 2.9 percent over the past year. But these gains are not spread evenly across workers. There are concerns that even this weak wage growth is not being shared. New data from economist Emmanual Saez shows that “the top 1 percent captured 93 percent of the income gains in the first year of recovery” from 2009 to 2010. According to calculations by Mike Konczal at the Roosevelt Institute, over that time period the bottom 90 percent of families lost $127 while the bottom 99 percent of American families gained $80—meaning that all the gains were concentrated among those between 1 and 9 percent. In contrast, the top 1 percent gained $105,637.
For the current economic recovery to become a sustained, broad-based recovery, we need to see stronger job growth and broader wage gains. There are a variety of policies that have been put forward to address this, including increased investments in infrastructure and more help for state and local governments. Yet conservatives in Congress are focused on other issues, among them women’s reproductive rights and draconian budget cuts that would only harm the recovery.
Hopefully today’s report will provide incentives for them to refocus the nation’s attention on jobs growth and rising job quality. After all, if conservatives got behind today’s economic momentum, they could take some credit for future jobs gains—not a bad idea in an election year when the American public’s opinion of Congress hovers at an all-time low.
Heather Boushey is Senior Economist at the Center for American Progress.
This article was originally published on Marketwatch.
- The ‘Man-covery’ by Heather Boushey
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