[FoRK] Jobs picture from Economic Policy Institute
jbone at place.org
jbone at place.org
Mon Mar 15 15:17:19 PST 2004
NB, full disclosure: yes, EPI is a hotbed of seething progressivism.
But the data's the data, and the decline relative to other "recoveries"
stands on its own and rests on the very BLS stats James mentioned...
Putting this in to perspective with a nice, sexy infographic...
March 5, 2004
Persistently weak job growth leads to labor force contraction
The nation's job market was far weaker than expected last month,
according to today's report from the Bureau of Labor Statistics (BLS).
Payrolls expanded by a mere 21,000, but even this amount was fully
accounted for by government hiring. Private-sector employment was
unchanged in February, the first such month since private-sector hiring
picked up last September. The persistently weak labor market continues
to take a toll on wage growth, with hourly wages up only 1.6% over the
past year—the weakest growth rate since 1986.
In a sign that employers continue to be extremely reticent about
committing to permanent hires, February's payroll gains were more than
explained by the addition of 32,000 temporary jobs. Most other sectors
showed small gains or losses, including manufacturing, which shed 3,000
jobs. While this is the 43rd consecutive month of employment
contraction in the nation's factories, the loss of 3,000 jobs is the
smallest reduction in any of those months.
A particularly notable aspect of the weak labor market is the declining
trend in the share of the population in the labor force, i.e., the
share of persons either working or seeking work. While February's
unemployment rate was unchanged at 5.6%, this reflects the fact that
the number of labor force participants fell steeply last month, by
392,000, presumably due to the lack of available jobs. Employment in
the survey that measures joblessness was also down last month, by
265,000. See JobWatch.org for an analysis of the impact of this trend
on unemployment rates of various groups of workers.
Though monthly labor force counts are volatile, the trend in the share
of the population either working or seeking work has been consistently
trending downward. Since last July, the labor force has contracted in
six out of eight months, and last month's participation rate of 65.9%
was the lowest since September 1988. This rate is down 1.2 percentage
points since the recession began in March 2001, with one-third of that
decline occurring over the recovery.
The figure contrasts this pattern with past recoveries by showing the
percentage-point change in labor force participation rates over the
first 27 months of the last four recoveries. Only the current recovery
shows a decline in the rate of labor force participation.
Percentage-point change in labor force participation rate, first 27
months of recovery
For minorities, the declines in participation rates are much larger:
down 2.7 points for Hispanics and 2.6 points for African-Americans,
with African-American men exhibiting a decline of -3.2 points.
Interestingly, participation rate declines are larger for the more
highly educated, underscoring the difficult job market for college
graduates. Their labor force participation rate last month was 77.7%,
down 1.6 points since the recession and the lowest level on record
since BLS began publishing this series in 1994.
Another indication that the labor force is far weaker than suggested by
the 5.6% unemployment rate is the high level of long-term unemployment.
The average unemployment spell is now lasting more than
four-and-a-half months (20.3 weeks), just slightly below the highest
level in two decades—20.4 weeks—posted in January 1984, when the
unemployment rate was 8%.
As noted, outside of temporary help, no sectors in the private
workforce had substantial gains last month. In fact, over the course
of the recovery, temporary work has posted the fastest pace of job
growth, increasing by 10.2% since November 2001. (Health care, another
growth sector, grew a bit more than half that fast, at 5.4% over the
same period.) The lack of growth in permanent employment provides a
clear indication that employers remain reluctant to add permanent hires
and are able to meet current levels of demand for their goods and
services without adding many new employees.
The impact of the weak job market on wage growth was also evident in
today's BLS report. The 1.6% annual growth rate of the hourly wages of
blue-collar workers in manufacturing and non-managers in services is
tied with the lowest rate on record (posted in December 1986), going
back to 1964. Even with low inflation rates running at about 2%, such
slow wage growth means many workers are falling behind in real terms.
This is an especially distressing fact given that productivity growth
has been exceptionally strong in recent months.
These divergent trends of productivity and wage growth are among the
more alarming symptoms of the persistently weak job recovery amidst
strong overall economic growth. Clearly, the weakness in the labor
market is preventing the gains of growth from being broadly shared with
with research assistance by Yulia Fungard
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