Listening to President Obama’s speech at Knox College in Galesburg, Ill., one might get the impression the US labor market has rebounded with a vengeance: “Today, five years after the start of that Great Recession, America has fought its way back. … Add it all up, and over the past 40 months, our businesses have created 7.2 million new jobs. This year, we are off to our strongest private-sector job growth since 1999.” And Obama only mentioned “unemployment” a single time.
Sounds like things must be pretty good for US workers, right? But a new report from the Century Foundation highlights a few job stats that didn’t make it into Obama’s final draft:
1. Over 69 percent of the jobs created in Q2 2013 and over 57 percent of all the jobs created in the first half of 2013 were created in the three lowest wage sub-sectors of the economy, Retail Trade, Administrative and Waste Services, and Leisure and Hospitality, that otherwise account for an aggregate of only 33 percent of all private sector jobs.
2. These jobs, in the aggregate, pay an average of only $15.80 per hour, compared with the other two-thirds of private sector jobs, which pay $27.16 per hour. Relative to unemployment benefits and other assistance, jobs at $15.80 per hour put less than $3.00/hour more in the pockets of a newly working consumer.
3. About half of the jobs created during the first half of 2013, and a large majority of the jobs created in Q2 2013, appear to have been part-time jobs that offer employees as little as one hour of work per week, and up to 35 hours of work.
4. After falling from a recession high of 9.2 million to a post-recession low of 7.6 million at the end of Q1 2013, the number of people saying they are working part time because they can’t find full time work (part time for economic reasons) crept back up to 8.2 million, double pre-recession levels.
5. Nearly 100 percent of the decline in the U-3 unemployment rate has been the result of there being fewer workers in the labor force as a percentage of the employable population. If the Labor Force Participation Rate had not fallen from October 2009, when unemployment hit its Great Recession peak of 10 percent, unemployment would today still be around 10 percent. Moreover, if the LFPR were held constant from its highest pre-recession level of 66.40 percent in January 2007 (when unemployment was 4.6 percent), the U-3 unemployment rate would be nearly 12 percent today.