The two-sided jobs picture
Work in the United States is a mixed bag: in many cases, you can get a job if you want one, even if you're a convicted felon, a former opioid addict, or have no resume to speak of. But if you are outside higher-skilled occupations, don't expect much in the way of outsize wages — or pay increases as time passes.
What's happening: In reports yesterday, the government said the U.S. economy is roaring into 2019 — but not wages.
- Month-to-month employment growth, at 304,000 in January, was some four times the 60,000-80,000 required to absorb new entrants to the work force, the Bureau of Labor Statistics reported.
- That was the 100th straight month of job growth — by far the longest streak since the number has been tracked in the 1930s.
And the economic expansion is now just five months shy of a record. As one example, factory production picked up steam last month, rising to 56.6 on the Institute for Supply Management Index (above 50 means expansion), up from 54.2 in December.
- "Usually, as expansions go on, they slow down a little bit. But it's really unclear when that is going to happen," said Martha Gimbel, research director at Indeed's Hiring Lab.
- "Job seekers are still in the driver seat," said Andrew Chamberlain, chief economist at Glassdoor, the jobs site.
But, but, but: Though wages grew by 3.2%, or 1.3% after accounting for inflation, that is about half what it should be, said Joe Brusuelas, chief economist at RSM.
- "At this point in the business cycle, we traditionally have 4% to 5% nominal wage gains," he said, and about 2.5% after inflation.
- "It was another month of anemic gains in hourly wages," Brusuelas said.
Like a growing number of economists, Brusuelas blames monopsony wage-setting power enjoyed by large companies that dominate metropolitan population areas. "They are so large, they are able to set a prevailing wage" that other companies then follow, he said
The bottom line: "Large behemoths essentially set wages," Brusuelas said. "This creates a ceiling that wages are simply not going to move above."