STATEMENT: Job Growth Strong, But Wages Need to Catch Up, Says CAP Economist Michael Madowitz
Washington, D.C. — Center for American Progress Economist Michael Madowitz released the following statement after the Bureau of Labor Statistics, or BLS, released the March 2016 employment situation figures:
Last month, the U.S. economy added 215,000 jobs, and the unemployment rate ticked up slightly to 5.0 percent, which is great news. More Americans moved into the labor force, meaning this is not just catch-up growth from the recession but instead an increase in long-term growth for the whole economy. There is no cause for worry that the economy is overheating—it is just creating more jobs. New data from the BLS show that while employment growth is strong, the tightening labor market has yet to make a meaningful dent in lagging wage growth. While wage growth was healthy last month at 0.3 percent, earnings are still not where they should be.
On the positive side of things, American workers received two pieces of good news this week. First, California—the seventh-largest economy in the world—announced plans to gradually raise its minimum wage to $15 per hour by 2022, ensuring that millions of hourly and low-wage Californians will finally earn a living wage. Second, the Supreme Court affirmed a lower court ruling in the case of Friedrichs vs. California Teachers Association, which supports workers who have joined together to work for good, middle-class wages and benefits. This ruling—for the time being—beat back yet another right-wing attempt to undermine American workers and unions, whose very existence is critical to the strength and health of the American middle class and to intergenerational economic mobility.
With the Federal Reserve signaling that it is doing its job and fulfilling its dual mandate, all eyes are now turned to Congress to do its part. Despite progress late last year to partially relieve budget austerity, some parts of Congress want to roll back the clock and restore austerity budgets. Such steps would hamper job and wage growth and undermine investments in the future. Congress should stand by its bipartisan budget and appropriations agreement from 2015 and support wage-enhancing fiscal policy.
Related resource: The State of the U.S. Labor Market: Pre-April 2016 Jobs Release by Michael Madowitz, Shiv Rawal, and Juliana Vigorito
For more information or to speak with an expert, contact Allison Preiss at firstname.lastname@example.org or 202.478.6331.