Welcome back from your Labor Day Holiday!
While we were releasing the State of Working Pennsylvania 2011 last week, the good people at the U.S. Department of Labor released their latest nationwide data on the August employment picture. Here is a run down of the main points from Washington’s leading labor economists.
Heidi Shierholz notes troubling trends in hours of work:
“The length of the average workweek declined in August to 34.2 hours. Average hours have dropped in the last three months, have seen no net growth over the last year, and have thus far made up just over half of what they lost in the first 18 months of the downturn (the low point was 33.7 in June 2009). One thing this underscores is that the lack of hiring right now primarily indicates a lack of demand, and not an inability by businesses to find the right workers or because of uncertainty or concern about regulatory burdens. If the lack of hiring was occurring for some reason other than a lack of demand, we would see businesses strongly ramping up the hours of the workers they have. As it is, there remains substantial room to meet unmet demand by increasing hours of existing workers; if private-sector employers were to simply restore the hours of their workers back to pre-recession levels, that would be equivalent to adding over 1.2 million jobs at current average hours.”
Welcome back from your Labor Day Holiday!
While we were releasing the State of Working Pennsylvania 2011 last week, the good people at the U.S. Department of Labor released their latest nationwide data on the August employment picture. Here is a run down of the main points from Washington’s leading labor economists.
Heidi Shierholz notes troubling trends in hours of work:
“The length of the average workweek declined in August to 34.2 hours. Average hours have dropped in the last three months, have seen no net growth over the last year, and have thus far made up just over half of what they lost in the first 18 months of the downturn (the low point was 33.7 in June 2009). One thing this underscores is that the lack of hiring right now primarily indicates a lack of demand, and not an inability by businesses to find the right workers or because of uncertainty or concern about regulatory burdens. If the lack of hiring was occurring for some reason other than a lack of demand, we would see businesses strongly ramping up the hours of the workers they have. As it is, there remains substantial room to meet unmet demand by increasing hours of existing workers; if private-sector employers were to simply restore the hours of their workers back to pre-recession levels, that would be equivalent to adding over 1.2 million jobs at current average hours.”
Dean Baker identifies some troubling stats on black employment and unemployment:
“A disproportionate share of the increase in employment in the household survey was among blacks, who saw a rise in employment of 155,000. However, this went along with a jump in the African American unemployment rate of 0.8 percentage points to 16.7 percent. The unemployment rate for black men rose by 1.0 percentage point to 18.0 percent and for black teens by 7.3 percentage points to 46.5 percent. The EPOP [employment to population ratio] for black teens was just 13.0 percent, a new low for the downturn.”
Heather Boushey reviews the grim numbers on long-term unemployment:
“A particularly ugly labor market trend is that workers who’ve lost their jobs continue to have an exceptionally difficult time returning to a job. The share of the unemployed who are long-term unemployed remains at near-record highs, with 42.9 percent of the unemployed having been out of work and searching for a job for at least six months. This share has been above 40 percent since December 2009.
Data from the Bureau of Labor statistics on job turnover shows that while layoffs have abated, hiring has yet to ramp up, indicating that there is greater calcification in the job market. If you have a job, you’re in the in-crowd, but if you’re out of work, it’s hard to get back in.”
Although the risk of a recession is greater today than it was a few months ago, the economy does not appear to be in a recession. Private-sector payrolls are continuing to grow, but they are growing at a pace too slow to reduce the unemployment rate.
Although a slow-growing economy is better than a shrinking economy, that’s a distinction without much of a difference since high unemployment means that if you lose your job, it will take you much longer than normal to find another job. Those fortunate to have a job will see their wages and incomes grow more slowly as employers use the weak economy to sweat more work out of each worker while simultaneously demanding concessions on pay and benefits.
This is why in a slow-growing economy following a deep recession, we see corporate profits approaching historic highs and booming CEO pay.