With Friday’s report that 227,000 net new jobs were added in February we have what was once considered a trend: Three months where job growth topped 200,000. It’s way better than the winter of 2008, when 700,000 jobs a month were being lost. But is the labor market really healing?
The jobs market continues to be hurt by cutbacks in government; by contrast during and after the 1980-82 recession(s), government jobs increased. Minorities, young workers and many older workers still face great difficulty in finding work. People with only a high-school education are especially hard hit. The unemployment rate of 8.3 percent is still double where it stood before the Great Recession. At this rate, it will take years to recover the millions of jobs lost.
To be sure, the jobs situation is better. The U-6 measure, the widest tracking of joblessness which includes part-timers seeking full-time work and discouraged workers, shows this best. It fell to 14.9 percent in February from 16.7 percent a year earlier.
As for the quality of jobs being created, this is another sore point. Temp employment is more widespread. Benefits are more paltry than in years past. Younger workers are especially facing poor wages and wage growth, underscored by a report from the Economic Policy Institute. General wage stagnation has been the rule since 2000, but entry level workers have fared the worst. This will make it more difficult to pay off student loans, which have been ballooning.
Something larger is happening. According to a report from the Center for Labor Market Studies at Northeastern University, more than 15 million workers were permanently displaced from their jobs from 2007 to 2009. This makes for a decade that saw two recessions and two jobless recoveries. In addition, the labor force essentially didn’t grow from 2008 to 2011. Last year, it stood slightly below its 2008 level (remember, it takes at least 125,000 net new jobs a month just to keep up with new entrants into the labor force).
A couple of key points:
The missing members of the labor force and the rising ranks of the open unemployed and hidden unemployed over the past four years have had a number of adverse consequences for these individuals themselves and for society as a whole. Both teen and young adult employment are highly path dependent, i.e., the more work experience a person acquires by Year t, the more likely they are to work in Year t + 1.24 Less work today leads to less work tomorrow.
At the other end of the age spectrum (55 and older), labor force withdrawals and other labor underutilization problems in recent years have been most intense among the less educated and lower income groups. Their reduced employment and earnings have pushed more of them into the ranks of the poor and near poor…
We’ve got a long way to go.
And Don’t Miss: A minimum industrial policy || Prestowitz/Foreign Policy
Today’s Econ Haiku:
Moving Nordstrom Rack
The big dog gets what it wants
What about Talbots?