Feb 2, 2019

The two-sided jobs picture

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Data: Bureau of Labor Statistics; Chart: Axios Visuals

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."

Go deeper: Now hiring — ex-cons, drug users, and indebted grads

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Updated 1 hour ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 3 p.m. ET: 6,703,686 — Total deaths: 393,393 — Total recoveries — 2,906,748Map.
  2. U.S.: Total confirmed cases as of 3 p.m. ET: 1,885,197 — Total deaths: 108,708 — Total recoveries: 485,002 — Total tested: 18,680,529Map.
  3. Public health: WHCA president says White House violated social-distancing guidelines to make reporters "a prop" — Jailing practices contribute to spread.
  4. States: Cities are retooling public transit to lure riders back.
  5. Jobs: Better-than-expected jobs report boosts stock market.
  6. Media: The Athletic lays off 8% of staff, implements company-wide pay cut.

Scoop: German foreign minister to travel to Israel with warning on annexation

Heiko Maas. Photo: Michael Kappeler/picture alliance via Getty Images

German Foreign Minister Heiko Maas is expected to travel to Israel next week to warn that there will be consequences if Israeli leaders move forward with plans to annex parts of the West Bank, Israeli officials and European diplomats tell me.

Why it matters: Israeli and European officials agree that if Israel goes ahead with unilateral annexation, the EU will respond with sanctions.

Minneapolis will ban police chokeholds following George Floyd's death

A memorial for George Floyd at the site of his death in Minneapolis. Photo: Steel Brooks/Anadolu Agency via Getty Images

Minneapolis has agreed to ban the use of police chokeholds and will require nearby officers to act to stop them in the wake of George Floyd's death, AP reports.

Why it matters: The agreement between the city and the Minnesota Department of Human Rights, which has launched an investigation into Floyd's death while in police custody, will be enforceable in court.