The jobs report silver linings that are a mirage
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Illustration: Lazaro Gamio/Axios
The labor market recovery came to a screeching halt in December, and the few data points that look promising for some of the most vulnerable working Americans are actually deeply troubling upon further inspection.
Driving the news: The recovery was interrupted as the coronavirus raged and the government was slow to move on fiscal support.
Reality check: Average hourly pay has been consistently rising since May, and it rose by another 23 cents in December. That's actually a bad thing.
- The measure has been distorted by the outsized number of lower-paid workers out of jobs. When lower-paid people drop off payrolls, it inflates the overall wage figure for people who are still employed.
- Case in point: At the onset of the pandemic — as the economy lost a record number of jobs — hourly pay soared by $1.34. That's a massive move, considering the hourly figure typically fluctuates by mere cents.
Another false hope narrative exists in the gap between white and Black unemployment. It narrowed last month, as the Black unemployment rate fell to 9.9% from 10.3%.
- But that’s in part because the number of Black workers considered in the labor force shrunk — i.e., gave up looking for work altogether. More white workers re-entered the workforce last month.
- White workers were the only group to see a net rise in employment in December. Latinos fared the worst by far, with 252,000 fewer considered employed in December. There were 40,000 fewer employed Asians and 26,000 fewer Black workers.
The professional and business services sector — think lawyers, accountants or consultants — saw the biggest job gains last month (161,000), helping offset the nearly 500,000 jobs shed in the leisure and hospitality sector.
- But over 40% of the gains were in temporary help services, limited gigs that may or may not turn into longer-term work.
Of note: Economists say if there’s a silver lining in the report, it’s that the labor market pain was largely limited to the leisure and hospitality industry while most other sectors continued to add jobs.
Yes, but: The fate of restaurant, hotel, casino and other hospitality jobs rests on the virus path and mass vaccinations. The dynamic contributes to the economy’s K-shaped recovery: Workers in some of the lowest paid industries are out of work, while less virus-sensitive industries aren't feeling the same economic pain.
