Feb 2, 2019

The two-sided jobs picture

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

Go deeper

U.S. economy adds 145,000 jobs in final report of 2019

Data: Bureau of Labor Statistics; Chart: Axios Visuals

The U.S. economy added 145,000 jobs in December, the government said on Friday, below economists’ expectations of 160,000. The unemployment rate held at 3.5% — a 50-year low — while wages grew 2.9% from a year earlier, the smallest gain since July 2018.

Why it matters: The U.S. job market held up in the final month of 2019, but heads into the election year with a slowing pace of job creation and wage growth.

Go deeperArrowJan 10, 2020

Unemployment fell to 50-year low in 2019 but wages stagnated

Data: U.S. Bureau of Labor Statistics; Chart: Axios Visuals

Friday's jobs report missed expectations, but still delivered solid numbers, showing the U.S. economy added well over 100,000 jobs and the unemployment rate remained near a 50-year low.

The big picture: BLS reported that the number of people who were employed part time but would rather be full-time employees declined by 507,000 over the year.

An unsettling future for millions of American jobs

Illustration: Aïda Amer/Axios

The U.S. economy is besting expectations for job growth, and the unemployment rate is at its lowest in several decades — but the other side of the story is that millions of jobs out there just aren't good enough.

Why it matters: Almost half of all American workers are stuck in low-wage jobs that often don't pay enough to support their lives, lack benefits and sit squarely inside the automation bullseye.