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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. 

Go deeper

Erica Pandey, author of @Work
Jan 20, 2021 - Economy & Business

By the numbers: The impact of the $15 minimum wage

Reproduced from Pew Research Center; Map: Axios Visuals

President-elect Joe Biden is calling to raise the federal minimum wage to $15 an hour, which is nearly double the current $7.25. The move would be the first change to the federal minimum wage since 2009.

Why it matters: The pandemic exposed the ugly ways in which America treats low-wage employees — even when they're doing essential jobs. Raising the federal minimum wage would put more money into the pockets of many of these same essential workers who have been on the front lines throughout the pandemic.

Bryan Walsh, author of Future
Jan 20, 2021 - Politics & Policy

President Biden faces a deeply broken America

Illustration: Aïda Amer/Axios

As President Biden begins his term in office today, he'll be tasked with leading a country beset with deep, long-term problems.

Why it matters: Though the pandemic has made them worse, existential challenges around inequality, social alienation and political division in the U.S. were in place well before SARS-CoV-2 arrived on American shores. The country's future will depend in large part on whether the choices made over the next four years can flatten the curve of American decline.

Fed chair says low interest rates aren't driving stock market prices

Jerome Powell. Photo: ANDREW CABALLERO-REYNOLDS / Getty Images

Federal Reserve chairman Jerome Powell told reporters on Wednesday that rock-bottom interest rates aren't playing a role in driving stock prices higher, while noting that vulnerabilities to the financial system are "moderate."

Why it matters: The statement comes amid unshakeable stock prices and a Reddit-fueled market frenzy — prompting widespread fears of a bubble and the role monetary policy has played in that.

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