Washington, D.C. — Center for American Progress Economist Michael Madowitz released the following statement today on the February 2016 employment situation figures from the U.S. Bureau of Labor Statistics, or BLS.
February 2016 was yet another strong month for the U.S. economy: We added 242,000 jobs, and the unemployment rate remained steady at 4.9 percent. Perhaps most importantly, this is the second consecutive month we’ve seen the labor force grow with the strong economy. With overall real wage growth nudging above 1 percent in 2015 for the first time in five years, there is little reason for the Federal Reserve to slow this progress through excessively hawkish interest rate hikes—particularly when problems in other economies continue to make net exports a drag on U.S. performance, and market-based and household survey measures of inflation expectations are moving downward.
Wage growth overall is slightly better than it has been in recent years, but a new CAP analysis released this week showed that today’s 30-year-olds—part of the Millennial generation—make around the same amount of money as 30-year-olds in 1984 when adjusted for inflation, despite the facts that they are 50 percent more likely to have finished college and that they work in an economy that is 70 percent more productive. Median hourly compensation for today’s 30-year-olds is also approximately $1 less than it was for Generation X workers in 2004.
Since education and a more productive economy have apparently not improved the compensation of young workers, it is becoming increasingly clear that policymakers must look elsewhere—including a monetary policy focused on creating tighter labor markets—for solutions to bring wages up. Better worker bargaining power and better work-family policies—such as paid family leave and others that would counter the effects of the motherhood penalty—would go a long way toward creating a more inclusive economy.
Related resource: The State of the U.S. Labor Market: Pre-March 2016 Jobs Release by Michael Madowitz, Shiv Rawal, and Juliana Vigorito.
For more information or to speak with an expert, contact Allison Preiss at [email protected] or 202.478.6331.