The Employment Situation for February included pretty good numbers. The Bureau of Labor Statistics (BLS) reported that job totals were up significantly–678,000 for non-farm businesses and government organizations. The official unemployment rate dropped two-tenths of a percent to 3.8%. These numbers suggest that January’s fairly good job totals were not a freak of seasonal adjustments. Also, it is clear that the unemployment rate did not fall because more people dropped out of the labor force. The labor force grew by 304,000, employment grew faster, and the ranks of the unemployed dropped by 243,000.
By Sector–Some Recoveries, Some Far From It
The employment situation was a mixed bag. Restaurants and other leisure and hospitality businesses gained 179,000 positions. Open Table reported that reservations had surpassed pre-pandemic levels. Yet there were 824,000 fewer restaurant jobs than in February 2020. It is a plus that pay in leisure and hospitality jobs rose 14% in one pandemic year. But that brings it to just $17.12 an hour, the lowest average wage of any sector.
The endangered retail sector regained enough jobs to surpass pre-pandemic levels. That is hard to believe. Health care employment is 306,000 jobs below its February 2020 level, and local government jobs, including education workers, are 598,000 jobs below the February 2020 level.
Negatives also apply to other sections of the jobs report. As the National Jobs for All Network’s (NJFAN) Full Count shows, black unemployment was, as usual, two times the white rate. Fuller employment with good jobs would help here but won’t solve the problem. Racism–institutional, structural, and personal–is deeply rooted, so black unemployment is always much higher than white. And the official black rate underestimates the problem. Hundreds of thousands of African Americans are in prison or have prison records that are a red flag to employers. Many don’t bother to look for work. Only an all-out package of solutions will bring black unemployment levels down to white rates.
The government undercounts unemployed African Americans and it undercounts total unemployment. Millions of job-wanters aren’t considered unemployed. While the official number unemployed was 6.3 million, 4.1 million part-timers could not find full-time work, and 5.4 million people wanted a job but had not recently searched for one–at least not in ways the BLS accepts. Adding these groups, NJFAN found that the number of unemployed in February was 15.8 million, not 6.3 million. The real unemployment rate was 9.3%. Perhaps labor demand was not as high as employers claim. Effective demand would include more good jobs.
Nothing New: Too Many Lousy Jobs
Wage levels are one index of job quality. We have heard a lot about worker shortages and employers lifting pay to attract people. It’s true that the dollar amounts an average employee sees in her pay packet have increased. But so has inflation. For most workers, after-inflation pay hasn’t grown steadily during the pandemic. From January 2020 through January 2021, real hourly pay advanced 4%. From January 2021 through January 2022, real hourly pay fell 1.3%. There was a net gain in real pay, but not so much, especially if we widen our lens for a minute. The history of real pay is a dreadful tale. How much did the purchasing power of hourly pay increase from 1972 through February 2020? The answer: 2.5%. That’s the total increase in the purchasing power of an hour of work for an average employee over half a century.
Even prior to the pandemic, employers normally had an adequate supply of labor. And that is despite the fact that the U.S. has relatively low labor force participation rates (people working or looking for work). The aging of the population plays a role here. But more oldsters would work if compensation and conditions were better. And even if we focus on prime working ages (25-54), we find that the participating share of the population fell from 85% to 81% between 2000 and 2015. (It rose again and is currently at 82.2%.)
Some prime-age people are not participating due to sickness, disability, and child care issues. Many are staying out because there aren’t enough jobs with livable wages, good benefits, and supportive bosses. Conservatives like to think the reason is that government benefits are too rich for the working class (but never rich enough for the super-rich). But benefits can be very low. For example, if you have a long-term illness or disability and you receive a monthly disability benefit of $1200, you won’t be getting more than you’d earn working 30 hours a week in a low-wage state for $10 an hour. Why not raise pay instead of cutting benefits?
We do not know what labor markets will look like if COVID becomes less consequential. More people who are rejecting lousy jobs will have to go back to work. Fewer people will quit their jobs, and the number of job vacancies will fall from historic highs at 10 million a month. Without a union surge, without higher minimum wages, without federal good-job programs, and without truly affirmative action, the lousy job situation will continue. More people will be back at miserable jobs. We hope more will be organizing for collective action at the workplace. Some already are.
Frank Stricker is on the Board and Executive Committee of the National Jobs for All Network, and is a DSA member. He taught history and labor studies for 35 years at California State University, Dominguez Hills. His book, American Unemployment: Past, Present, and Future (2020), shows that excessive unemployment, not full employment, has been the rule for most of the last century and a half–often because of willed ignorance.
In case you missed it: Frank Stricker’s analysis of the January 2022 jobs report
Also see the December 2021 NJFAN Newsletter Democratizing Work, and Why the Definition of Full Employment Matters!! and Uniting for Voting Rights (Letter to the NY Times), 1/27/22