The American economy gained 266,000 jobs last month. The unemployment rate increased slightly to 6.1 percent.
There's no way around it: this sucks. Service jobs increased by an anemic 234,000 while goods-producing jobs actually fell by 16,000. Aside from that, there was nothing special going on. The participation rate was up a little bit. The number of unemployed was up a little bit. About 330,000 people dropped out of the labor force, which is nothing special. Long-term unemployment was down. Unemployment for economic reasons was down substantially. The April report has the basic shape of something good, aside from the fact that it was so small.
It's hard to know what to make of this. Maybe it's just the calm before the storm, and May will be the first month when businesses really start to open up now that vaccination rates are high.
Alternatively, it's possible that continued unemployment benefits are keeping workers on the sidelines, figuring they might as well take another couple of months off while they can. Maybe someone ought to do a survey about that?
Childcare stuff is still very spotty. There are still concerns about safety in many industries.
Improve vaccination and ventilation to get schools open and get people back to work in workplaces that aren't reckless.
Oh and maybe pay them more because $4 and hour+tips is obscene.
I don't know. Everything has been open in Florida for many months. Schools have been open all year. There hasn't been widespread concerns for safety in a long time among most people. But I hear the same thing all the time. Business can't get workers in because the unemployment benefits offer too much incentive to stay on the sidelines. Almost every restaurant I go to they say that same thing. We got to Busch Gardens pretty frequently and its the same thing. They are very short staffed and in talking to employees they say they're trying to hire more people.
Yes, there are various factors. But it seems by far the biggest cause is the expanded unemployment benefits.
AND the fact that very many restaurants offer insultingly low wages for difficult work. As several well-publicized anecdotes have shown recently, they have no problem getting employees if they pay a decent (i.e., above poverty-level) wage.
It just turns my stomach to hear the tsk-tsking from business owners, Republican politicians, and other comfortable and entitled people about providing bare subsistence-level assistance to people who need it to avoid, say, hunger or eviction, or to afford, say medication, or heat in the winter.
It's depraved. There's no other word for it.
The benefits are not that generous, they just made people realize how badly they were being exploited before. Which is what I hoped would happen.
🙂
But I hear the same thing all the time. Business can't get workers in because the unemployment benefits offer too much incentive to stay on the sidelines. Almost every restaurant I go to they say that same thing.
I definitely agree the anecdotes of your right wing business owner friends in Trump's home state tell the whole story.
In my neck of the woods (Seattle), the restaurant, convention, hospitality and entertainment industries are still way below normal. This is due to ongoing restrictions and general hesitancy among people to get out among crowds, even with relatively good vaccination rates. I don't know what the economic multiplier effect is for these industries, but I suspect as these industries become freed up (it may come gradually), lots of jobs will return.
The last paragraph is a popular talking points for people who never worked for a living (those people are not lazy these days; they work for power and prestige and status symbols but they never faced serious budget constraints in their lives). It is not good to repeat it on a liberal forum.
The present minimum wage is an insult to workers. Minimum wage jobs generally involve hard work--work that makes you really tired at the end of the shift. It must be better rewarded.
It's not just a talking point. My own brother told me last night that he sees no reason to go back to work since he makes almost as much on unemployment. Right now he's getting paid over $30,000/year to sit at home.
Your own brother said he's getting $15 an hour on unemployment? I see that Washington and Massachusetts offer benefits in that range, but no place else does.
This. And in some places the state part of UI is appallingly low.
His state is paying him $275/week in unemployment. Then there is the federal supplement that is paying him $300/week extra. $575/week x 52 is $29,900 per year.
The key is the federal covid supplement.
In your case it's not just "only a talking point" it's a talking point with fake numbers!
Do we have any evidence on what wages are doing? If employers really were having difficulty getting people to come in and apply, you'd expect to see rising wages, right? Mind you, I'm well aware not all employers can increase wages right now (especially by significant margins), but, for employers, the "idle workers are sitting home playing video games" dynamic is, for them (the employers), the same as a shortage of workers. And when workers become scare, wages increase.
So, long story short, if "excessive" UI benefits were the culprit, my guess is we should see evidence of this in the form of wage increases (and perhaps we are seeing this for all I know).
I know a few business owners that can't hire anyone right now. People don't even apply. Either they are afraid of covid or the extended UI is not worth giving up. Perhaps both. But these are small businesses that can't really increases wages to match the UI benefits. Not Target or Home Depot.
Personally I am enjoying the lack of traffic in my city. Once the extended UI runs out our streets will again be flooded with Ubers and Lyfts.
Jasper
From the linked article (DoL website)
"In April, average hourly earnings for all employees on private nonfarm payrolls
increased by 21 cents to $30.17, following a decline of 4 cents in the prior month. In April, average hourly earnings for private-sector production and nonsupervisory employees rose by 20 cents to $25.45. The data for April suggest that the rising demand for labor associated with the recovery from the pandemic may have put upward pressure on wages.
Since average hourly earnings vary widely across industries, the large employment fluctuations since February 2020 complicate the analysis of recent trends in average hourly earnings."
"Average hourly wages" is a potentially misleading statistic, particularly with covid gumming up the works. The service jobs in the hospitality industries that were most likely to be lost are generally fairly low paying. The result is that closing a bunch of restaurants and bars and removing their employees from the work force will increase the wages for the remaining work force. By the same token, when those low paid people get hired back, average wages will drop.
To find out if wages are rising, you really need to look at the work force by occupation. If, for example, the wages paid to burger flippers are rising, there is a labor shortage. If average overall wages are rising because all the burger flippers have been laid off, there is not a labor shortage.
law
I agree that COVID has really muddied the waters
There are pockets where economies are getting "hot" - Montana is one of those areas.
Others like SC remain slightly below average for overall employment
But the system is what we have and rather than confuse the issues I would rather stay with the consistent averages the DoL has used historically
Cancel White Boy Summer.
Enter scene right the Nelly of the Beast.
We did have a fourth wave, after all. That triggered uncertainty amid renewed lockdowns and the threat of new lockdowns. People surely reflexively adjusted their habits to reflect an attempt to mitigate increased risks.
It'll be interesting if we have a fifth, smaller wave in mid-June.
To state the obvious, work isn't fun except if you're very, very lucky. Being low-wage myself I'll say categorically that if I got the same money for staying in bed as for getting up, I'd stay in bed. And if I got even more that way, no contest. Pundits including Kevin last year pointed out people were still working in such jobs. Well, duh. It was a time of very high anxiety. In such a case, yeah. you'll hold on to the job you have. But now everyone is expecting the US economy to take off like a rocket from this summer on. So if unemployment benefits are better, why not wait until September before finding a job? There'll be lots of them, won't there? What would you do? Me, I know.
I know it's painful but this is one thing liberals got ridiculously wrong: that people would forever flip hamburgers and clean streets and serve obnoxious bar clients for less money than they'd get for watching movies all day long, out of "work ethic" or whatever. It's just not how it works. No extra money, no labor.
I agreed up until the "liberals" part. Last I heard, it wasn't liberals who opposed extended UI benefits or opposed increasing the federal minimum wage or or or ...
True, if the minimum wage had been raised by a lot, presumably that would have solved the problem. But the UI benefits, if they are higher than wages, are the problem. They should NEVER be higher than wages, except if you want less people to work. That's the point I'm making. And I didn't even speak of the resentment people feel when they work and get less than their neighbor who doesn't. This is basic working-class psychology. People don't like their jobs but still are proud of taking care of themselves. When they get less because of it, they feel like suckers.
Conservatives think that. I doubt any liberals do.
All qualified economists I've read say the reason for slow rehiring is that wages for all of these open jobs are too low. E. G. here in Milwaukee, every summer the County hires lifeguards for the beaches. There always used to be competition for these jobs among upper class high schoolers and college age swimmers but the going rate for the jobs range from ~$11-$14 per hour. They're fairly high-skilled, life-saving jobs on the one hand, and I assume, sort of fun outdoor temporary summer work on the other. Still, it's clear to anyone that the pay sucks and that's why there's a shortage of applicants for the jobs. Same as everywhere else.
When employers start paying what the jobs are worth, there'll be lines around the block for them. Immediately.
Yes. Only anecdata, but there have been enough stories like this in the news recently that I see no reason to think basic principles of both macro- and microeconomics have become invalid.
Not enough supply? Raise price. Not difficult.
People seem to have forgotten that the reason the UI benefits are so large is THAT WE DON'T WANT PEOPLE WORKING. We want them to be able to stay home, to reduce the spread of, oh I don't know, a DEADLY CONTAGEOUS DISEASE. Once we really do get the vaccination rates up where they need to be, which was expected to be by the end of the summer, the extra benefits run out, and people will go to work.
This.
Also, another way to look at it is: in essence labor has (in many cases) become more expensive because jobs in question are perceived as more dangerous. A burger flipper might be willing to work for $13/hour when he/she didn't perceive the job as being especially dangerous. But because said job is now perceived as dangerous, perhaps he/she not unreasonably wants, say, $20/hour. Sure, we have vaccines now, but you can hardly blame low-paid workers for needing a transitional period to adjust to the new reality (especially since we're still on pace to suffer 20,000 covid deaths per month).
I will be interested to see whether the boom in jobs ever happens. Sure there is pent up demand for a lot of things people have missed but there are probably at least a few people who like me who are happy not going to restaurants and shows as much. And the business travel stuff I used to do I don't expect will be back to the way it was any time soon -- if ever. Certainly all conventions and tradeshows are done with at least until 2022 because they require so much pre-planning. It is easy to over-predict how monumental things will be in the longer term of history because they always seem so huge when they are happening but there is certainly a good argument to make that the pandemic really will have profound long term changes on the mix of economic activity. I have been doing web meetings for 15+ years but now everybody I know is doing them enough to be sick of them. That change is not going away. Same thing for online shopping. Will all those people who subscribed to disney+ and got big screen TVs go back to the movie theaters? Maybe some, but probably a sizable portion won't. More importantly for all these things unlike the shutdown which was a clear point in time which affected everyone together over the course of a week or two, the return to normalcy is very much something that will happen individually or at the social group level and over a period of months.
It's not as if being on unemployment is a vacation. Depending on the state, the requirements to receive it can be onerous.
How desperate are employers for workers? They raised hourly rates by 21 cents in April.
8 dollars a week...wooeee.....
They aren't that desperate. The BLS is a turd. There are millions of furloughed workers they aren't putting back into the data. That has been a problem since the original lockdown ended.
I agree that a some business owners bellyaching over the lack of job applicants could just raise wages to compete better -- they just don't want to. But I do have some sympathy with small restauranteurs this puts in a bind. If you're on the real high end, say a Michelin-starred restaurant in NYC, you could pay your staff more (they're probably already making significantly over minimum, esp. with tips) and pass along the costs. Customers who can afford $250 per person for a fancy tasting menu are probably not going to balk at paying $265. At the lower end, however, most mom-and-pop eateries, small diners, etc. are competing with the fast-food market where the only viable business model relies on paying staff minimum wage and there's very high demand elasticity. If prices move beyond a certain point, you don't just put yourself at a disadvantage vis-a-vis other competitors, people will simply opt to forego dining out altogether.
I was way off in how rosy the situation would be.
But in looking at the report:
Although leisure and hospitality has added 5.4 million jobs over the year, employment in the industry is down by 2.8 million, or 16.8 percent, since February 2020.
Employment in other services is 352,000 below its February 2020 level.
Employment in local government education increased by 31,000 in April but is 611,000 lower than in February 2020
Employment in social assistance is 286,000 lower than in February 2020.
Employment in financial activities is down by 63,000 since February 2020.
employment in temporary help services declined by 111,000 in April and is 296,000 lower than in February 2020
Employment in manufacturing is 515,000 lower than in February 2020.
Employment in retail trade overall is 400,000 lower than in February
2020.
Health care employment is down by 542,000 since February 2020.
Construction - but is 196,000 below its February 2020 level.
You add up all those jobs BELOW Feb 2020 and you come to 6,000,000 jobs LESS now than back then
Will it inspire the GOP to vote FOR Joe's infrastructure plan? Absolutely not
The Gov of Montana is no longer accepting enhanced unemployment benefits. Why? Montana is now at 3.9% unemployment BELOW the classic level of full employment. He is using those federal funds in another way. He is offering for ANY Montana resident who finds work a $1400 bonus once you are on the job for 4 weeks. The problem with this is that Gov McMaster of SC also is refusing enhanced FED UI benefits - but his state is still at 6.1% unemployment.. His reasoning is that his average state wages are BELOW the enhanced PLUS SC UI benefits numbers so yes in SC the additional $300/week puts people at home making MORE MONEY than they would working.
Now don't get me wrong - Cost of Living is different for Montana and SC versus New York. South Carolina is now approaching tourist season, if enough people stay out of the work force wages will have to go up or businesses will close. In spite of their infrastructure needs both states will go against the infrastructure plan - why? because infrastructure is temporary whereas tourists you can count on.
Sorry, but the BLS is mumbling a storm. Long term job loss is barely below 2001. The BLS refusal to add back furlough workers should be intervened with. Wages are irrelevant. Unemployment would have to fall to 4% just to demographically reach the 2003 peak. Shame on the BLS.
Just to add on, 1.1 million jobs not seasonally adjusted. Amazing how much they cut that down.
Cancel White Boy Summer.
Enter scene right the Nelly of the Beast.