BLS numbers obscure the growth of low wage jobs in the economy

Month-to-Month Comparison Doesn’t Show Labor Market Trends

Statement by LeeAnn Hall, Executive Director, Alliance for a Just Society, comparing data in, “America’s Changing Economy: Searching for Work that Pays in the New Low-Wage Job Market, ” a living wage report released earlier this week.

This month’s BLS jobs report finds an overall increase in employment and decrease in the unemployment rate. When put into context of post-recession trends, however, we see a different story. There are some points that put the BLS report into context.

LeeAnn Hall, Alliance Executive Director: “While reports of increasing employment paint an optimistic picture, when looking at what’s really happening on the ground, the picture isn’t so simple. Post-recession trends demonstrate a serious erosion in the quality of jobs created. This is an erosion of a fundamental American value that full-time work should pay enough to provide for a family, which, as the 51.4 million Americans we found to be in low-wage jobs will tell you, just is not a reality anymore.”

“We must be cautious and not get overly excited about numbers that show a slight uptick from month to month, because it doesn’t tell us the full story. That only serves to offer us short-term memory of what workers are going through nationally. If you look at what’s happening over the longer term, we see a different story.”

The following can be attributed to Ben Henry, Alliance Senior Policy Associate:

Employment: While the November BLS report shows gains over the previous month, post-recession trends speak to a sharp, steady increase in the percentage of low-wage jobs in the economy. It is important to note that, according to post-recession trends identified in the Alliance’s just-released report, “America’s Changing Economy,” employment gains have primarily come from low-wage jobs. The study finds that the share of low-wage jobs to total employment increased 8% between 2009 and 2012, with low-wage, non-sustaining jobs increasing by 3.6 million as good-wage jobs decreased by 4 million.

Purchasing power: Some analyses of BLS numbers discuss that workers have increased purchasing power since the previous month. However, our study finds a trend toward low-wage employment that does not pay enough to sustain. There were 7.6% more Americans in low-wage jobs in 2012 than in 2009, when the recession was declared over. Further, the increase in hourly wages does little to offset the four straight years of pay cuts, in real dollars, that minimum-wage workers have endured since the federal minimum wage was last increased in 2009.

Unemployment rate: While we have seen a slight increase in month-to-month employment for marginally attached workers, the larger trends demonstrate that there are significantly more Americans in need of good-wage jobs than there are jobs to be had. The total number of job-seekers — which is calculated to capture the full universe of Americans in need of these jobs — more than doubled, to 20.8 million Americans, in 2012 when compared to pre-recession levels. And, with nearly 40% of employment coming in the form of low-wage jobs, we find that there are seven job-seekers for every job that pays a good wage (defined as $15 an hour or higher, in 2012 dollars).

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