Better but Not Great (June 2021 Jobs Report Analysis)

By FRANK STRICKER

The employment and unemployment numbers come from two different surveys, and at times they seem to describe different economies.

The Bureau of Labor Statistics’ (BLS) survey of 60,000 households shows that in June, unemployment rose by a tenth of a point to 5.9%, and the number of employed people actually fell a bit. In the payroll survey, jobs increased by 850,000.

From the household survey, we learn that African Americans’ unemployment rate, as usual, was almost double at 9.2%, the white rate of 5.2%. The Latino rate fell to 7.3% and the Asian rate to 5.8%. Other highlights include the fact that the number of involuntary part-timers – people who want full-time work but can’t find it – fell to 4.6 million. Whether a plus or a minus, the fraction of teens who were working fell a bit in June but was still higher than, for example, in September 2019, well before the pandemic. In June, the share of the white teen population with jobs was 34.1%, and of black teens 27.1%.

The payroll/establishment survey of 144,000 business and government organizations cannot measure unemployment, but it does supply job totals for the non-farm sector. For June, the survey found a healthy increase of 850,000 non-farm jobs. That was the best showing in months.

Job Totals Remain Down 

But it is troubling that the household survey showed job totals down a bit, while the payroll survey found a large gain. Few people seem particularly worried about the discordance. It’s happened before, but experts, including BLS staff, have not offered credible explanations. In general, it is best to watch trends rather than single months. Some trends are still pretty dismal. It’s a long way back to pre-pandemic labor markets, not to mention real full employment.

In June,  job totals in the household survey were 7.2 million below their level in February 2020. Also, since then, and despite Covid deaths and restricted immigration, the civilian non-institutionalized adult population increased by 1.7 million. Right now, we need 8.9 million jobs to get back to pre-pandemic normal.

But pre-pandemic normal was not real full employment.

The official unemployment rate in February 2020 looked very good at 3.5%, but, according to the National Jobs for All Network’s (NJFAN) Full Count, real unemployment was 8.9%. NJFAN included 5 million people who wanted jobs but weren’t currently searching, and 4.3 million part-timers who wanted full-time work. For June 2021, with the official unemployment rate at 5.9%, NJFAN’s real unemployment rate was 12.2%.

To wipe out unemployment, we’d need 20 million new jobs. Perhaps 3 million fewer to allow for frictional unemployment – the fact that people searching for jobs don’t find them right away. In any case, adding enough jobs to get close to real full employment cannot be done without large New-Deal style work projects. A medium-sized road-and-rail infrastructure program like the one being negotiated in Washington isn’t enough.

What About “Labor Shortages”

“Labor shortages” stayed in the news and there were more articles about higher rates of employee quits. More quits usually signal that people are confident about finding new jobs. The rate reached 2.7% of the labor force in April. That’s not much higher than in 2019, but workers are not supposed to quit their jobs in hard times. They should be grateful for any kind of job, right? For much of the 2010s, employers did not have to work very hard to find employees, and today many of them aren’t in any rush to substantially improve job quality. Some have replaced workers with machines in order to avoid paying $14 an hour. In Republican-controlled states, politicians strive to make unemployed people more desperate. They are rejecting the federal unemployment bonus of $300 and cutting other programs.

I have not seen scholarly support for the idea that the $300 benefit is a major reason why people are reluctant to go back to work. But it must be one factor, in combination with other things: continuing worries about getting Covid, child-care responsibilities, and the great “reallocation,” as it is called. Quite a few people are taking time to reflect on their career options. Some people wonder if they even want to go back to work (retirements are up), and those who need jobs are reluctant to sign up at workplaces where pay is lousy, benefits sparse, and managers and customers hostile. Some people are adding to their skill sets. Laid off from his position in food services, Luis Herrera earned a high school diploma and got a new job that paid much more and included health benefits and vacation days. But that can’t be everybody’s solution.

Real unemployment will stay high, and that will weaken employee bargaining leverage.

As government income supports are pared back, and savings shrink, workers’ reflections on new careers will be cut short. A general rethink won’t, of itself, bring structural change in labor markets. That requires political work, organization, and compassion for low-wage workers.

Frank Stricker is a board member of the National Jobs for All and emeritus professor of history and labors studies at California State University, Dominguez Hills. He is the author of “American Unemployment: Past, Present, and Future (University of Illinois Press, 2020).

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