By FRANK STRICKER
The federal survey of business and governmental organizations for April 2021, showed that job additions were much lower than expected–266,000 instead of more than expected 900,000.
The household survey, from which we get numbers on the labor force and unemployment, showed that more people had jobs. But more were also looking for work, so the unemployment rate rose by a tenth of a percent to 6.1 percent.
Things are improving, but at a slower pace than hoped. We’ve had slow months before. In November we gained only 264,000 jobs; in December, job totals fell by 306,000. But we’ve gained hundreds of thousands of jobs since then. There are frictions of all kinds in today’s economy: bottlenecks and shortages, hesitant employers and employees, unspent government money, and ultra-low wages.
About job totals, there are two really big questions. When might labor markets get back to pre-pandemic numbers? And when will we get real full employment?
We in the Jobs for All Network believe that official figures severely underestimate unemployment. When government said we were at 4 percent before the pandemic, unemployment was really 8 or 9 or 10 percent.
As you can see on the Full Count Table accompanying this article, we include as unemployed 5.2 million part-timers who want full-time work, 6.6 million who want a job but haven’t looked lately, and 9.8 million, the official total. For April, we believe that the 12.9 percent unemployment rate is a truer estimate of labor market slack than the official 6.1 percent. (Our number also helps explain why wage growth has been lousy for decades.)
Currently, we need 20 million jobs over the next decade to get to full employment. We won’t get there without new federal job programs. Mark Zandi of Moody’s Analytics projects that even with President Biden’s American Rescue Plan and the hoped-for $2 trillion dollar infrastructure program, job totals in 2030 will be just 10 million above pre-pandemic levels. Not great for ten years.
Meanwhile, despite the fact that there are huge numbers of unemployed people, conservatives and employers tell us they cannot find workers. A labor shortage while millions are unemployed.
What’s going on? Actually, a lot of things. Owners, managers, trade groups, and the pro-business press normally assume that if employers can’t get all the employees they want at the price they want, there is a labor shortage. Also, employers and Republicans don’t like generous unemployment benefits–they want job-seekers to be desperate. So, they blame unemployment benefits for the alleged worker shortage. Scholarly research shows that even last year’s $600 bonus benefit was not the major disincentive to the job search. But decent benefits must have some effect on people’s willingness to take lousy jobs.
Government statistics show that very few workers are quitting their jobs. Many people are going back to work–several hundred thousand last month to bars, restaurants, and hotels. There are good reasons why everyone is not rushing back to work. For one thing, there really is a job shortage out there. No kidding: there aren’t enough jobs. Also, some people are still worried about catching COVID from customers and co-workers. More than 8 million potential employees–mostly women–say they are not working because they are taking care of parents or children, or both. Some people must be worried about giving give up unemployment benefits for a job that could disappear next month. Do they want to struggle again with the benefits bureaucracy?
In some “They-Won’t-Work” articles, owners claim to be offering large signing bonuses. Could be. But there is no legal backup for signing bonuses or decent pay in many parts of the country. The minimum wage is $7.25 in many states. Employees could spend a lot of that money paying for transportation to work, child care, and other essentials. Think about a part-time job that pays $10 an hour for 100 hours a month. Half your take-home pay could go to rent.
In some states, employers are allowed to pay as little as $2.13 per hour to tipped workers. The employee is supposed to get to the minimum wage with tips. But it must often be a struggle for workers to get what they are owed. Wage theft is common. And customers harass tipped workers, demanding they take off their masks and smile pretty before their tip amount is determined.
In some poor-paying states, cooks and dishwashers may earn more than tipped workers. But if they are paid, say, $11 an hour and work 40 hours a week every week of the year, they gross just $22,880. That seems like poverty. In a nation in which the top billionaires have increased their wealth by many billions during this depression, people should not have to work for $7.25 an hour or even $11 an hour.
More employers need to think about morality, or at least about basic economics. If you want to attract workers, pay people more. If you want to attract the drop-out prime-age males and females whom the critics like to lambast, pay more and support better child-care options. If you think too many people are retiring, offer better pay to older Americans.
MSNB’s Stephanie Ruhle reported that at the Kentucky Derby, guests were paying $15 for a cocktail, but the company there was trying to hire workers for $7.25 an hour. Some owners do the right thing. The people running Klavon’s Ice Cream Parlor in Pittsburgh did not have enough employees to open the desired seven days a week. On March 30, they more than doubled the starting wage from $7.25 to $15. Overnight, they got thousands of applications, and filled 16 positions in a couple of days.
Whoduthunk? Dan Price, CEO of Gravity Payments, pays a living wage with benefits. He gets 300 applications for each opening. He thinks there is “a shortage of people willing to work for $7.25 an hour with no benefits for greedy bosses.”
The National Jobs for All Network’s monthly Real Count analysis of government employment statistics is posted on the network’s website at www.njac.org. Since its founding in 1994, the National Jobs for All Network (previously Coalition) has been “telling the whole story” about unemployment.*
Our founders recognized that the official unemployment rate reported monthly by the Labor Department leaves out more jobless and job short workers than it includes. To be counted as unemployed, one must work less than one hour a week in paid employment and be actively seeking employment.. As the above figures show, more than half the unemployed or underemployed are left out of the official count. Consider the political consequences of this undercount—of a problem perceived by the public as less than half as widespread as it really is.
*See “Unemployment Statistics: Let’s Tell the Whole Story” by NJFAC founders Helen Lachs Ginsburg, Bill Ayres, and June Zaccone, Employment Statistics: Let’s Tell the Whole Story – NJFAC
Frank Stricker is a board member of the National Jobs for All Network, emeritus professor of history at California State University, Dominguez Hills, and author of “American Unemployment, Past, Present, and Future.”
The Full Count: April 2021
Officially unemployed: 9.8 million (6.1%)
Hidden unemployment: 11.8 million
(Includes 5.2 million people working part-time
because they can’t find a full-time job;
and 6.6 million people who want jobs,
but are not actively looking)
Total: 21.6 million (12.9% of the labor force)
There are 2.7 job-wanters for each available job!
For more information and analysis, visit: www.njfac.org
Source: U.S. Bureau of Labor Statistics