On Substance, Martin O’Malley Was Right About American Wages: Don’t Let Nitpicks Convince You That There Is Not A Crisis in American Pay

Three separate sources have recently “fact-checked” claims that Martin O’Malley made about American wages in his recent speech announcing his candidacy for the Democratic nomination. The precise O’Malley quote was:

Today in America, 70 percent of us are earning the same or less than we were 12 years ago, and this is the first time that that has happened this side of World War II.

O’Malley has said that our research on wages provided a basis for his claim (examples can be found here and here).

First, let’s be clear on what our claim is and then I’ll talk about the fact checkers’ assessments of O’Malley’s use of the data.

We have data on hourly wages by decile since 1973. Between 2002 and 2014, inflation-adjusted hourly wages for the bottom 7 deciles (i.e., 70 percent of the American workforce) fell. This is a remarkable economic fact and one that O’Malley is clearly right to highlight.

Further, between 1947 and 1973 there is almost certainly no 12-year period when the bottom 70 percent of wage earners saw hourly wage declines. Precise wage data by decile is sketchy over this period, but the circumstantial evidence on this is overwhelming. Just look at this graph, which shows hourly pay for a grouping reflecting the bottom 80 percent of the workforce rising sharply until the early 1970s.

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What Can the TPP Offer Canada? Not Much.

When Canada joined the Trans-Pacific Partnership talks in 2012 it did so somewhat reluctantly and, like Mexico, with strings attached. One of them was that Canadian negotiators could not reopen any closed text. So, in this sense, it’s been a bit of a raw deal for the Obama administration’s NAFTA partners from the beginning. Canada’s bigger business lobbies called it a defensive move, to “secure” NAFTA supply chains rather than offering any meaningful market access elsewhere. The Canadian public have almost no idea what’s going on. But as TPP countries appear to be close to the end game, people here are starting to ask the obvious questions: what’s in it for us, and what will we have to give up to get it. The answers are equally obvious if you look past the hype: not much, and quite a lot.

To begin with, Canada already has free trade deals in place with four of the larger TPP countries (Peru, Chile, the United States, and Mexico), and tariffs on trade with the others—representing 3 percent of imports and 5 percent of exports—are very low. Canada has a trade deficit with these non-FTA countries of $5 to $8 billion annually, and 80 percent of Canada’s top exports to these countries are raw or semi-processed goods (e.g., beef, coal, lumber), while 85 percent of imports are of higher value-added goods (e.g., autos, machinery, computer and electrical components). This Canadian trade deficit will likely widen if the TPP is ratified, as the United States found two years into its FTA with South Korea.

Tariff removal through the TPP is therefore likely to worsen the erosion of the Canadian manufacturing sector and jobs that has been taking place since NAFTA—a result, in part, of the limits free trade deals place on performance requirements and production-sharing arrangements. NAFTA-driven restructuring did not even have the promised effect of raising Canadian productivity levels, which languish at 70 percent of U.S. levels twenty years into the agreement. Instead, Canada has experienced greater corporate concentration, a significant decline in investment in new production, and rising inequality.

In short, there is little trade expansion up­side for Canada in this negotiation. And yet the Canadian public will eventually be asked to make considerable public policy concessions to see the TPP through. As many U.S. commentators have argued, the trade impacts of TPP are far less important than the serious concerns it raises about excessive intellectual property rights, regulatory harmonization, and the perpetuation of a controversial investor-state dispute settlement (ISDS) regime that has been extremely damaging to democratic governance globally, not to mention quite humiliating for Canada.

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Et Tu, Mickey Mouse? Disney Pads Record Profits by Replacing U.S. Workers with Cheaper H-1B Guestworkers

There was a lot to celebrate in the Magic Kingdom this year. The Disney Corporation had its most profitable year ever, with profits of $7.5 billion—up 22 percent from the previous year. Disney’s stock price is up approximately 150 percent over the past three years. These kinds of results have paid off handsomely for its CEO Bob Iger, who took home $46 million in compensation last year.

Disney prides itself on its recipe for “delighting customers,” a recipe it says includes putting employees first. They tout this as a key to their success in creating “a culture where going the extra mile for customers comes naturally” for employees. One method of creating this culture is referring to its employees as “cast members.” In fact, Disney is so proud of its organizational culture that it’s even created an institute to share its magic with other businesses (for a consulting fee, of course).

So, you would expect a firm that puts its employees first to share the vast prosperity that’s been created with the very employees who went above and beyond to help generate those record profits.

Well, how did Mr. Iger repay his workers—sorry, I mean cast members—for creating all this profit? Not with bonuses and a big raises. Instead, as the New York Times just detailed in a major report, he forced hundreds of them to train their own replacements—temporary foreign workers here on H-1B guestworker visas—before he laid them off.

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Don’t Pop the Champagne Corks Yet: Putting Year-over-Year Hourly Earnings Growth in Perspective

Average hourly earnings hit $24.96 in May, an increase of 2.3 percent over May 2014. We’ve been tracking nominal wage growth over the recovery and at best we can find reason for only a very modest celebration. 2.3 percent growth is a move in the right direction, but it’s nowhere near the 3.5 to 4.0 percent growth we expect in a healthy labor market.

As shown in the figure below, average hourly wage growth has been teetering around 2.0 percent for the last five years. There has been a slight increase in the annual twelve-month growth trend this past month to 2.3 percent from the trends observed in earlier months this year, which hovered between 2.0 and 2.2 percent. This may be a temporary increase, as we’ve seen 2.3 percent before. Even more important is that a 2.3 percent annual growth in wages is far below target, as the graph shows.

Nominal Wage Tracker

Nominal wage growth has been far below target in the recovery: Year-over-year change in private-sector nominal average hourly earnings, 2007–2015

All nonfarm employees Production/nonsupervisory workers
Mar-2007 3.5910224% 4.1112455%
Apr-2007 3.2738095% 3.8461538%
May-2007 3.7257824% 4.1441441%
Jun-2007 3.8062284% 4.1267943%
Jul-2007 3.4482759% 4.0524434%
Aug-2007 3.4940945% 4.0404040%
Sep-2007 3.2827046% 4.1493776%
Oct-2007 3.2778865% 3.7780401%
Nov-2007 3.2714844% 3.8869258%
Dec-2007 3.1599417% 3.8123167%
Jan-2008 3.1067961% 3.8619075%
Feb-2008 3.0947776% 3.7296037%
Mar-2008 3.0813674% 3.7746806%
Apr-2008 2.8818444% 3.7037037%
May-2008 3.0172414% 3.6908881%
Jun-2008 2.6666667% 3.6186100%
Jul-2008 3.0000000% 3.7227950%
Aug-2008 3.3285782% 3.8263849%
Sep-2008 3.2258065% 3.6425726%
Oct-2008 3.3159640% 3.9249147%
Nov-2008 3.6406619% 3.8548753%
Dec-2008 3.5815269% 3.8418079%
Jan-2009 3.5781544% 3.7183099%
Feb-2009 3.2363977% 3.6516854%
Mar-2009 3.1293788% 3.5254617%
Apr-2009 3.2212885% 3.2924107%
May-2009 2.8358903% 3.0589544%
Jun-2009 2.7829314% 2.9379157%
Jul-2009 2.5889968% 2.7056875%
Aug-2009 2.3930051% 2.6402640%
Sep-2009 2.3437500% 2.7457441%
Oct-2009 2.3383769% 2.6272578%
Nov-2009 2.0529197% 2.6746725%
Dec-2009 1.8198362% 2.5027203%
Jan-2010 1.9545455% 2.6072787%
Feb-2010 1.9990913% 2.4932249%
Mar-2010 1.7663043% 2.2702703%
Apr-2010 1.8091361% 2.4311183%
May-2010 1.9439421% 2.5903940%
Jun-2010 1.7148014% 2.5309639%
Jul-2010 1.8476791% 2.4731183%
Aug-2010 1.7528090% 2.4115756%
Sep-2010 1.8410418% 2.2982362%
Oct-2010 1.8817204% 2.5066667%
Nov-2010 1.6540009% 2.2328549%
Dec-2010 1.7426273% 2.0700637%
Jan-2011 1.9170753% 2.1704606%
Feb-2011 1.8708241% 2.1152829%
Mar-2011 1.8691589% 2.0613108%
Apr-2011 1.9102621% 2.1097046%
May-2011 1.9955654% 2.1567596%
Jun-2011 2.1295475% 1.9957983%
Jul-2011 2.2566372% 2.3084995%
Aug-2011 1.8992933% 1.9884877%
Sep-2011 1.9400353% 1.9331243%
Oct-2011 2.1108179% 1.7689906%
Nov-2011 2.0228672% 1.7680707%
Dec-2011 1.9762846% 1.7680707%
Jan-2012 1.7497813% 1.3989637%
Feb-2012 1.8801924% 1.4500259%
Mar-2012 2.0969856% 1.7607457%
Apr-2012 2.0052310% 1.7561983%
May-2012 1.8260870% 1.3903193%
Jun-2012 1.9548219% 1.5447992%
Jul-2012 1.7741238% 1.3333333%
Aug-2012 1.8205462% 1.3340174%
Sep-2012 1.9896194% 1.4351615%
Oct-2012 1.5073213% 1.2781186%
Nov-2012 1.8965517% 1.4307614%
Dec-2012 2.1963824% 1.7373531%
Jan-2013 2.1496131% 1.8906490%
Feb-2013 2.1030043% 2.0418581%
Mar-2013 1.9255456% 1.8829517%
Apr-2013 2.0085470% 1.7258883%
May-2013 2.0068318% 1.8791265%
Jun-2013 2.1303792% 2.0283976%
Jul-2013 1.9132653% 1.9230769%
Aug-2013 2.2562793% 2.1772152%
Sep-2013 2.0356234% 2.1728146%
Oct-2013 2.2486211% 2.2715800%
Nov-2013 2.2419628% 2.3173804%
Dec-2013 1.8963338% 2.1597187%
Jan-2014 1.9360269% 2.3069208%
Feb-2014 2.1437579% 2.4512256%
Mar-2014 2.1830395% 2.3976024%
Apr-2014 1.9689987% 2.3952096%
May-2014 2.1347844% 2.4426720%
Jun-2014 2.0442219% 2.3359841%
Jul-2014 2.0859408% 2.4329692%
Aug-2014 2.2064946% 2.4777007%
Sep-2014 2.0365752% 2.2749753%
Oct-2014 2.0331950% 2.2704837%
Nov-2014 2.1100538% 2.2648941%
Dec-2014 1.8196857% 1.8682399%
Jan-2015 2.2295623% 2.0098039%
Feb-2015 1.975309% 1.6601563%
Mar-2015 2.095316% 1.853659%
Apr-2015 2.21857% 1.900585%
May-2015 2.295082% 2.043796%
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Nominal wage growth consistent with the Federal Reserve Board's 2 percent inflation target, 1.5 percent productivity growth, and a stable labor share of income.

Source: EPI analysis of Bureau of Labor Statistics Current Employment Statistics public data series

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More Hope about the Labor Market Can Lead to a Higher Unemployment Rate

That’s what happened in May. We saw solid job growth in payroll employment (+280,000 jobs). At the same time, we saw a solid increase in the civilian labor force—nearly 400,000 more people in the labor force in May. It’s not surprising then that the unemployment rate (by definition, the number of unemployed people divided by the labor force) increased slightly (though not significantly, statistically speaking). Regardless, this “rise” is actually a positive sign.

The weak labor market has sidelined millions of “missing workers,” or potential workers who, because of weak job opportunities, are neither employed nor actively seeking a job. In other words, these are people who would be either working or looking for work if job opportunities were significantly stronger. An increase in optimism about the labor market leads to more people actively seeking employment. As expected, a rise in the labor force in May corresponded with a decline in the estimated number of missing workers.

Missing Workers

Millions of potential workers sidelined: Missing workers,* January 2006–May 2015

Date Missing workers
2006-01-01 610,000
2006-02-01 160,000
2006-03-01 190,000
2006-04-01 300,000
2006-05-01 170,000
2006-06-01 110,000
2006-07-01 60,000
2006-08-01 -140,000
2006-09-01 90,000
2006-10-01 -130,000
2006-11-01 -380,000
2006-12-01 -650,000
2007-01-01 -670,000
2007-02-01 -480,000
2007-03-01 -420,000
2007-04-01 340,000
2007-05-01 200,000
2007-06-01 80,000
2007-07-01 90,000
2007-08-01 560,000
2007-09-01 150,000
2007-10-01 480,000
2007-11-01 -140,000
2007-12-01 -250,000
2008-01-01 -790,000
2008-02-01 -330,000
2008-03-01 -480,000
2008-04-01 -260,000
2008-05-01 -730,000
2008-06-01 -610,000
2008-07-01 -640,000
2008-08-01 -650,000
2008-09-01 -350,000
2008-10-01 -550,000
2008-11-01 -300,000
2008-12-01 -300,000
2009-01-01 -100,000
2009-02-01 -230,000
2009-03-01 210,000
2009-04-01 -130,000
2009-05-01 -200,000
2009-06-01 -260,000
2009-07-01 120,000
2009-08-01 410,000
2009-09-01 1,220,000
2009-10-01 1,350,000
2009-11-01 1,400,000
2009-12-01 2,100,000
2010-01-01 1,660,000
2010-02-01 1,540,000
2010-03-01 1,320,000
2010-04-01 770,000
2010-05-01 1,330,000
2010-06-01 1,710,000
2010-07-01 1,880,000
2010-08-01 1,490,000
2010-09-01 1,850,000
2010-10-01 2,320,000
2010-11-01 1,960,000
2010-12-01 2,390,000
2011-01-01 2,460,000
2011-02-01 2,630,000
2011-03-01 2,430,000
2011-04-01 2,500,000
2011-05-01 2,590,000
2011-06-01 2,670,000
2011-07-01 3,110,000
2011-08-01 2,520,000
2011-09-01 2,510,000
2011-10-01 2,540,000
2011-11-01 2,510,000
2011-12-01 2,470,000
2012-01-01 2,780,000
2012-02-01 2,540,000
2012-03-01 2,530,000
2012-04-01 2,890,000
2012-05-01 2,480,000
2012-06-01 2,240,000
2012-07-01 2,770,000
2012-08-01 2,830,000
2012-09-01 2,690,000
2012-10-01 2,130,000
2012-11-01 2,480,000
2012-12-01 2,060,000
2013-01-01 2,340,000
2013-02-01 2,690,000
2013-03-01 3,130,000
2013-04-01 2,880,000
2013-05-01 2,740,000
2013-06-01 2,580,000
2013-07-01 2,860,000
2013-08-01 3,010,000
2013-09-01 3,130,000
2013-10-01 3,810,000
2013-11-01 3,360,000
2013-12-01 3,550,000
2014-01-01 3,420,000
2014-02-01 3,200,000
2014-03-01 2,840,000
2014-04-01 3,670,000
2014-05-01 3,410,000
2014-06-01 3,320,000
2014-07-01 3,170,000
2014-08-01 3,260,000
2014-09-01 3,580,000
2014-10-01 3,060,000
2014-11-01 3,030,000
2014-12-01 3,230,000
2015-01-01 2,860,000
2015-02-01 3,110,000
2015-03-01 3,330,000
2015-04-01 3,140,000
2015-05-01 2,830,000

 

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* Potential workers who, due to weak job opportunities, are neither employed nor actively seeking work

Note: Volatility in the number of missing workers in 2006–2008, including cases of negative numbers of missing workers, is simply the result of month-to-month variability in the sample. The Great Recession–induced pool of missing workers began to form and grow starting in late 2008.

Source: EPI analysis of Current Population Survey public data series

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Yes, the Employment Report Was Decent. But No, The Labor Market Isn’t Strong.

Yes, this morning’s jobs report had some welcome news. Payroll employment was up 280,000 jobs, slightly above the trend of the previous six months. But the recovery is far from complete: there is still a three million job shortfall in the economy today.

The recent trends in job growth predict a slow march back to full recovery. If we continued to add 280,000 jobs a month into the future, we wouldn’t fill the jobs gap until August 2016—more than a year away. Over the last six months, average job growth was 236,000. If we continued to add jobs at that pace, the gap wouldn’t close until the end of 2016. The three month average of 207,000 jobs (much slower because of the poor March report) moves full recovery even farther into the future—at that pace, we wouldn’t return to pre-recession labor market health until April 2017.

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Furthermore, it’s important to remember that the 2007 labor market is still a low bar and that recovery is not just about jobs. Nominal wage growth continues to be far below target. Yes, 2.3 percent wage growth is an improvement, but it’s nowhere near strong enough to call for rate hikes. The Fed should not feel comfortable raising rates in September—in fact, they shouldn’t even begin to think about having a conversation about raising rates until 2016.

Don’t Forget about High School Grads

Last week, we released  The Class of 2015, our annual report examining the job and wage prospects for newly-minted high school and college graduates. When we release this study, the media tend to focus on the chances college graduates have for snagging a job. But I want to submit a humble plea: don’t forget about the high school grads. After all, they make up the majority of young people.

Only 9.7 percent of young people between the ages of 17 and 24 have a college degree or more. 52.7 percent, meanwhile, have a high school degree or less (as shown in Table 1), and another 37.6 percent have only some college experience. And this trend isn’t unique to young people—even when you look at workers who are a little bit older, college graduates are still a minority. A significant share of workers age 24–29 have only a high school degree (26.4 percent) or some college experience (30.7 percent) and only 34.1 percent have a bachelor’s or advanced degree.

Table 1

Highest degree earned, by age and demographic, 2015*

Age 17–24 Age 24–29
All Men Women White Black Hispanic All Men Women White Black Hispanic
Less than high school 24.8% 26.1% 23.5% 22.5% 26.6% 30.9% 8.9% 9.7% 8.0% 4.6% 9.2% 21.6%
High school 27.9% 30.1% 25.7% 26.1% 32.2% 32.1% 26.4% 29.9% 22.9% 23.8% 33.0% 32.5%
Some college 37.6% 35.8% 39.5% 39.2% 35.9% 32.9% 30.7% 29.4% 32.0% 30.4% 36.7% 29.9%
Bachelor’s degree 9.0% 7.5% 10.5% 11.5% 4.9% 3.8% 26.6% 24.6% 28.5% 32.5% 17.2% 13.3%
Advanced degree 0.7% 0.6% 0.9% 0.8% 0.5% 0.3% 7.5% 6.4% 8.5% 8.6% 4.0% 2.8%

* Data reflect 12-month moving average as of March 2015.

Note: Race/ethnicity categories are mutually exclusive (i.e., white non-Hispanic, black non-Hispanic, and Hispanic any race).

Source: EPI analysis of basic monthly Current Population Survey microdata

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When you look at the wages that young people with a high school degree are making, they are far less than what college grads can expect. The average young high school graduate who does not enroll in further schooling makes $10.40 an hour, which has declined 5.5 percent from the $11.01 they were making in 2000. $10.40 an hour translates to an average full-time, full-year worker salary of just $21,632 for high school graduates. To put that in perspective, that is less than is needed to lift a four-person family above the poverty line and less than the amount needed for a one adult, one child family to get by in every area in the United States.

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What to Watch on Jobs Day: What’s at Stake at the Upcoming FOMC Meeting and the Outlook for Young Workers

In tomorrow’s release of the Employment Report, I’m primarily looking for evidence confirming that the Federal Reserve should continue to stay the course through its June (and most likely September) meetings. I’ll also be looking more closely at the labor market for young people: specifically, youth entering the labor market in the summer and prospects for recent high school grads.

When the Federal Open Market Committee meets in two weeks, they will almost surely continue their current agenda and resist pressure to raise interest rates. Raising interest rates prematurely would slow the recovery, which is still in much need of oxygen. Job growth sputtered in March, but picked up again in April. If the economy continues to grow at an average of 191,000 jobs a month (as it has for the past three months), it will return to pre-Great Recession labor market health by August 2017. If you want to downplay the very weak March data, then the average job growth over the past six months (255,000 jobs per month) moving forward gets us back to prerecession health by October 2016.

All measures point to a slowly recovering economy, but an economy that is still far from the health of 2007, let alone the health of the far-stronger economy of 2000. The employment-to-population ratio remains seriously depressed, and there are still over 3 million potential workers sidelined by the weak labor market. Further, wage growth has continued to fall flat—nominal hourly wage growth has remained at around 2 percent over the last five years, far below any reasonable target.

Now that the college graduating class of 2015 has begun to try their luck in the labor market, it’s time to consider how 2015’s high school graduates are expected to do as they graduate this month. Extensive details on the specifics of the high school graduates—including underemployment and wages—are available here. Below is a chart of the unemployment rates of everyone in the labor force versus those under 25 years old and the youngest potential workers, those between 16 and 19 years old. While the unemployment rates for all groups have declined precipitously during the recovery, two other facts are readily apparent. First, the unemployment rates for any of them have not fully recovered (and it’s important to remember that this measure of unemployment fails to include those working part-time that want full time jobs or those who may have just recently given up looking for work). Second, the younger the potential labor mark entrant, the higher the unemployment rate—and the farther those younger cohorts are from a healthy unemployment rate. Unfortunately, this does not bode well for young workers looking for summer employment or their first job out of high school or college.

Figure A

Unemployment rate of workers by age group, 1969–2015

Date All 16–24 16–19
1969-01-01 3.4% 8.2% 12.0%
1969-02-01 3.4% 8.1% 11.9%
1969-03-01 3.4% 8.3% 12.3%
1969-04-01 3.4% 8.2% 12.0%
1969-05-01 3.4% 8.3% 12.4%
1969-06-01 3.5% 8.3% 12.2%
1969-07-01 3.5% 8.7% 12.8%
1969-08-01 3.5% 8.2% 12.2%
1969-09-01 3.7% 8.9% 12.6%
1969-10-01 3.7% 8.8% 12.6%
1969-11-01 3.5% 8.2% 11.6%
1969-12-01 3.5% 8.4% 11.8%
1970-01-01 3.9% 9.3% 13.5%
1970-02-01 4.2% 9.8% 13.3%
1970-03-01 4.4% 9.6% 13.4%
1970-04-01 4.6% 10.4% 14.7%
1970-05-01 4.8% 10.4% 14.2%
1970-06-01 4.9% 11.2% 16.3%
1970-07-01 5.0% 11.0% 14.7%
1970-08-01 5.1% 11.4% 15.7%
1970-09-01 5.4% 12.1% 16.2%
1970-10-01 5.5% 12.2% 16.7%
1970-11-01 5.9% 12.9% 17.4%
1970-12-01 6.1% 12.8% 17.1%
1971-01-01 5.9% 12.6% 16.8%
1971-02-01 5.9% 12.5% 16.3%
1971-03-01 6.0% 12.8% 16.9%
1971-04-01 5.9% 12.5% 16.3%
1971-05-01 5.9% 13.0% 16.8%
1971-06-01 5.9% 13.2% 17.7%
1971-07-01 6.0% 12.9% 17.7%
1971-08-01 6.1% 12.8% 16.8%
1971-09-01 6.0% 12.4% 16.7%
1971-10-01 5.8% 12.4% 16.9%
1971-11-01 6.0% 13.0% 16.9%
1971-12-01 6.0% 12.7% 16.9%
1972-01-01 5.8% 12.7% 16.9%
1972-02-01 5.7% 12.8% 18.0%
1972-03-01 5.8% 12.8% 17.2%
1972-04-01 5.7% 12.4% 16.5%
1972-05-01 5.7% 11.8% 15.3%
1972-06-01 5.7% 11.8% 15.9%
1972-07-01 5.6% 12.0% 15.6%
1972-08-01 5.6% 12.1% 16.5%
1972-09-01 5.5% 12.0% 16.3%
1972-10-01 5.6% 12.0% 15.8%
1972-11-01 5.3% 11.5% 15.7%
1972-12-01 5.2% 11.3% 15.6%
1973-01-01 4.9% 10.2% 13.7%
1973-02-01 5.0% 10.9% 15.3%
1973-03-01 4.9% 10.4% 14.3%
1973-04-01 5.0% 11.0% 15.5%
1973-05-01 4.9% 10.7% 14.9%
1973-06-01 4.9% 10.4% 13.8%
1973-07-01 4.8% 10.6% 14.3%
1973-08-01 4.8% 10.3% 14.0%
1973-09-01 4.8% 10.7% 14.7%
1973-10-01 4.6% 10.0% 14.4%
1973-11-01 4.8% 10.4% 15.0%
1973-12-01 4.9% 10.5% 14.6%
1974-01-01 5.1% 10.8% 14.6%
1974-02-01 5.2% 11.0% 14.9%
1974-03-01 5.1% 10.7% 14.9%
1974-04-01 5.1% 10.5% 14.3%
1974-05-01 5.1% 11.3% 15.4%
1974-06-01 5.4% 11.8% 16.3%
1974-07-01 5.5% 12.1% 16.8%
1974-08-01 5.5% 11.7% 14.9%
1974-09-01 5.9% 12.6% 17.0%
1974-10-01 6.0% 12.5% 17.2%
1974-11-01 6.6% 13.4% 17.8%
1974-12-01 7.2% 14.2% 18.2%
1975-01-01 8.1% 15.1% 19.5%
1975-02-01 8.1% 15.6% 19.4%
1975-03-01 8.6% 16.2% 19.9%
1975-04-01 8.8% 16.5% 19.9%
1975-05-01 9.0% 16.9% 20.4%
1975-06-01 8.8% 16.3% 20.9%
1975-07-01 8.6% 16.6% 20.7%
1975-08-01 8.4% 16.3% 20.7%
1975-09-01 8.4% 16.1% 19.5%
1975-10-01 8.4% 16.1% 19.8%
1975-11-01 8.3% 15.7% 19.0%
1975-12-01 8.2% 15.6% 19.8%
1976-01-01 7.9% 15.4% 19.6%
1976-02-01 7.7% 14.7% 19.0%
1976-03-01 7.6% 14.6% 18.9%
1976-04-01 7.7% 14.9% 19.5%
1976-05-01 7.4% 14.3% 18.6%
1976-06-01 7.6% 14.5% 18.5%
1976-07-01 7.8% 14.2% 18.3%
1976-08-01 7.8% 15.0% 19.6%
1976-09-01 7.6% 14.4% 18.6%
1976-10-01 7.7% 14.9% 19.0%
1976-11-01 7.8% 14.9% 19.2%
1976-12-01 7.8% 14.8% 19.1%
1977-01-01 7.5% 14.3% 18.9%
1977-02-01 7.6% 14.5% 18.4%
1977-03-01 7.4% 14.2% 18.6%
1977-04-01 7.2% 13.7% 18.0%
1977-05-01 7.0% 13.7% 17.8%
1977-06-01 7.2% 14.0% 18.8%
1977-07-01 6.9% 13.3% 17.5%
1977-08-01 7.0% 13.7% 17.4%
1977-09-01 6.8% 13.5% 18.0%
1977-10-01 6.8% 13.0% 17.2%
1977-11-01 6.8% 13.1% 17.2%
1977-12-01 6.4% 12.2% 15.5%
1978-01-01 6.4% 12.9% 16.7%
1978-02-01 6.3% 13.0% 17.2%
1978-03-01 6.3% 13.0% 17.3%
1978-04-01 6.1% 12.6% 16.6%
1978-05-01 6.0% 11.8% 16.0%
1978-06-01 5.9% 11.7% 15.4%
1978-07-01 6.2% 12.5% 16.5%
1978-08-01 5.9% 11.7% 15.7%
1978-09-01 6.0% 12.1% 16.4%
1978-10-01 5.8% 11.5% 16.1%
1978-11-01 5.9% 11.9% 16.3%
1978-12-01 6.0% 12.1% 16.7%
1979-01-01 5.9% 11.6% 16.1%
1979-02-01 5.9% 11.7% 16.1%
1979-03-01 5.8% 11.6% 15.9%
1979-04-01 5.8% 11.6% 16.3%
1979-05-01 5.6% 11.6% 16.1%
1979-06-01 5.7% 11.5% 15.7%
1979-07-01 5.7% 11.6% 15.6%
1979-08-01 6.0% 12.2% 16.5%
1979-09-01 5.9% 12.1% 16.5%
1979-10-01 6.0% 12.1% 16.5%
1979-11-01 5.9% 11.6% 15.9%
1979-12-01 6.0% 12.4% 16.2%
1980-01-01 6.3% 12.6% 16.5%
1980-02-01 6.3% 12.5% 16.6%
1980-03-01 6.3% 12.3% 16.3%
1980-04-01 6.9% 13.1% 16.2%
1980-05-01 7.5% 14.7% 18.6%
1980-06-01 7.6% 14.7% 18.9%
1980-07-01 7.8% 14.9% 19.1%
1980-08-01 7.7% 14.7% 18.9%
1980-09-01 7.5% 14.3% 18.0%
1980-10-01 7.5% 14.5% 18.4%
1980-11-01 7.5% 14.4% 18.5%
1980-12-01 7.2% 13.7% 17.6%
1981-01-01 7.5% 14.5% 19.1%
1981-02-01 7.4% 14.6% 19.3%
1981-03-01 7.4% 14.5% 19.2%
1981-04-01 7.2% 14.5% 18.8%
1981-05-01 7.5% 15.1% 19.1%
1981-06-01 7.5% 14.9% 19.8%
1981-07-01 7.2% 14.1% 18.6%
1981-08-01 7.4% 14.5% 18.8%
1981-09-01 7.6% 14.9% 19.7%
1981-10-01 7.9% 15.3% 20.3%
1981-11-01 8.3% 15.9% 21.3%
1981-12-01 8.5% 16.1% 21.1%
1982-01-01 8.6% 16.5% 22.0%
1982-02-01 8.9% 17.0% 22.6%
1982-03-01 9.0% 16.9% 21.8%
1982-04-01 9.3% 17.4% 22.8%
1982-05-01 9.4% 17.3% 22.8%
1982-06-01 9.6% 17.5% 22.9%
1982-07-01 9.8% 18.0% 24.0%
1982-08-01 9.8% 18.1% 23.7%
1982-09-01 10.1% 18.2% 23.6%
1982-10-01 10.4% 18.5% 23.7%
1982-11-01 10.8% 19.0% 24.1%
1982-12-01 10.8% 18.9% 24.1%
1983-01-01 10.4% 18.5% 23.1%
1983-02-01 10.4% 18.4% 22.8%
1983-03-01 10.3% 18.2% 23.5%
1983-04-01 10.2% 18.0% 23.4%
1983-05-01 10.1% 17.7% 22.8%
1983-06-01 10.1% 17.8% 24.0%
1983-07-01 9.4% 16.8% 22.8%
1983-08-01 9.5% 17.3% 22.9%
1983-09-01 9.2% 16.4% 21.7%
1983-10-01 8.8% 16.2% 21.4%
1983-11-01 8.5% 15.4% 20.2%
1983-12-01 8.3% 14.9% 19.9%
1984-01-01 8.0% 14.8% 19.5%
1984-02-01 7.8% 14.3% 19.4%
1984-03-01 7.8% 14.4% 19.8%
1984-04-01 7.7% 14.5% 19.2%
1984-05-01 7.4% 13.6% 18.7%
1984-06-01 7.2% 13.2% 18.2%
1984-07-01 7.5% 13.7% 18.8%
1984-08-01 7.5% 14.1% 18.7%
1984-09-01 7.3% 14.0% 19.2%
1984-10-01 7.4% 13.6% 18.6%
1984-11-01 7.2% 13.2% 17.7%
1984-12-01 7.3% 13.7% 18.8%
1985-01-01 7.3% 13.6% 18.8%
1985-02-01 7.2% 13.6% 18.3%
1985-03-01 7.2% 13.6% 18.2%
1985-04-01 7.3% 13.2% 17.5%
1985-05-01 7.2% 13.6% 18.5%
1985-06-01 7.4% 13.5% 18.5%
1985-07-01 7.4% 14.2% 20.2%
1985-08-01 7.1% 13.3% 17.9%
1985-09-01 7.1% 13.3% 17.9%
1985-10-01 7.1% 14.1% 20.0%
1985-11-01 7.0% 13.5% 18.3%
1985-12-01 7.0% 13.5% 19.1%
1986-01-01 6.7% 13.0% 18.1%
1986-02-01 7.2% 13.6% 18.8%
1986-03-01 7.2% 13.2% 18.2%
1986-04-01 7.1% 13.7% 19.2%
1986-05-01 7.2% 13.7% 18.6%
1986-06-01 7.2% 13.5% 19.2%
1986-07-01 7.0% 13.3% 18.4%
1986-08-01 6.9% 13.1% 18.0%
1986-09-01 7.0% 13.6% 18.4%
1986-10-01 7.0% 13.0% 17.7%
1986-11-01 6.9% 12.8% 18.1%
1986-12-01 6.6% 13.0% 17.5%
1987-01-01 6.6% 13.0% 17.7%
1987-02-01 6.6% 13.1% 18.0%
1987-03-01 6.6% 12.8% 17.9%
1987-04-01 6.3% 12.6% 17.3%
1987-05-01 6.3% 12.5% 17.4%
1987-06-01 6.2% 12.3% 16.5%
1987-07-01 6.1% 11.8% 15.8%
1987-08-01 6.0% 11.7% 15.9%
1987-09-01 5.9% 11.8% 16.2%
1987-10-01 6.0% 11.8% 17.3%
1987-11-01 5.8% 11.5% 16.6%
1987-12-01 5.7% 11.2% 16.0%
1988-01-01 5.7% 11.5% 16.1%
1988-02-01 5.7% 11.3% 15.6%
1988-03-01 5.7% 11.8% 16.6%
1988-04-01 5.4% 11.2% 16.0%
1988-05-01 5.6% 11.3% 15.3%
1988-06-01 5.4% 10.5% 14.2%
1988-07-01 5.4% 10.8% 14.8%
1988-08-01 5.6% 11.0% 15.4%
1988-09-01 5.4% 10.8% 15.5%
1988-10-01 5.4% 10.8% 15.1%
1988-11-01 5.3% 10.5% 13.9%
1988-12-01 5.3% 10.8% 14.8%
1989-01-01 5.4% 11.8% 16.4%
1989-02-01 5.2% 10.6% 15.0%
1989-03-01 5.0% 10.1% 13.9%
1989-04-01 5.2% 10.6% 14.6%
1989-05-01 5.2% 10.4% 14.8%
1989-06-01 5.3% 11.2% 15.7%
1989-07-01 5.2% 10.6% 14.2%
1989-08-01 5.2% 10.9% 14.6%
1989-09-01 5.3% 11.1% 15.2%
1989-10-01 5.3% 11.0% 15.0%
1989-11-01 5.4% 11.3% 15.5%
1989-12-01 5.4% 11.2% 15.3%
1990-01-01 5.4% 10.8% 14.8%
1990-02-01 5.3% 10.7% 15.0%
1990-03-01 5.2% 10.6% 14.3%
1990-04-01 5.4% 11.1% 14.7%
1990-05-01 5.4% 10.8% 15.0%
1990-06-01 5.2% 10.4% 14.3%
1990-07-01 5.5% 10.7% 15.0%
1990-08-01 5.7% 11.5% 16.3%
1990-09-01 5.9% 11.7% 16.4%
1990-10-01 5.9% 11.8% 16.5%
1990-11-01 6.2% 12.0% 17.1%
1990-12-01 6.3% 12.0% 17.4%
1991-01-01 6.4% 12.6% 18.6%
1991-02-01 6.6% 12.8% 17.4%
1991-03-01 6.8% 13.1% 18.3%
1991-04-01 6.7% 12.7% 17.8%
1991-05-01 6.9% 13.6% 18.8%
1991-06-01 6.9% 13.6% 18.5%
1991-07-01 6.8% 13.8% 19.4%
1991-08-01 6.9% 13.5% 18.9%
1991-09-01 6.9% 13.4% 18.8%
1991-10-01 7.0% 13.9% 19.1%
1991-11-01 7.0% 13.8% 19.0%
1991-12-01 7.3% 14.6% 20.3%
1992-01-01 7.3% 13.9% 19.2%
1992-02-01 7.4% 14.2% 20.1%
1992-03-01 7.4% 14.1% 20.3%
1992-04-01 7.4% 13.6% 18.5%
1992-05-01 7.6% 14.4% 20.1%
1992-06-01 7.8% 15.2% 23.0%
1992-07-01 7.7% 14.5% 20.8%
1992-08-01 7.6% 14.2% 19.9%
1992-09-01 7.6% 14.5% 21.0%
1992-10-01 7.3% 13.5% 18.3%
1992-11-01 7.4% 14.3% 20.5%
1992-12-01 7.4% 14.2% 19.8%
1993-01-01 7.3% 14.0% 19.9%
1993-02-01 7.1% 14.1% 19.7%
1993-03-01 7.0% 13.6% 19.7%
1993-04-01 7.1% 13.8% 19.5%
1993-05-01 7.1% 14.2% 19.8%
1993-06-01 7.0% 13.7% 19.9%
1993-07-01 6.9% 13.1% 18.4%
1993-08-01 6.8% 13.0% 18.4%
1993-09-01 6.7% 12.6% 18.2%
1993-10-01 6.8% 13.0% 18.7%
1993-11-01 6.6% 12.9% 18.5%
1993-12-01 6.5% 12.5% 17.9%
1994-01-01 6.6% 13.4% 18.3%
1994-02-01 6.6% 12.9% 18.0%
1994-03-01 6.5% 13.1% 18.0%
1994-04-01 6.4% 13.3% 19.1%
1994-05-01 6.1% 12.5% 18.0%
1994-06-01 6.1% 12.4% 17.6%
1994-07-01 6.1% 12.4% 17.6%
1994-08-01 6.0% 12.5% 17.3%
1994-09-01 5.9% 12.1% 17.5%
1994-10-01 5.8% 12.0% 17.5%
1994-11-01 5.6% 11.4% 15.6%
1994-12-01 5.5% 11.5% 17.0%
1995-01-01 5.6% 11.4% 16.5%
1995-02-01 5.4% 11.7% 17.4%
1995-03-01 5.4% 11.6% 16.1%
1995-04-01 5.8% 12.0% 17.5%
1995-05-01 5.6% 11.9% 17.5%
1995-06-01 5.6% 12.0% 17.1%
1995-07-01 5.7% 12.5% 18.2%
1995-08-01 5.7% 12.5% 17.3%
1995-09-01 5.6% 12.7% 17.6%
1995-10-01 5.5% 12.4% 17.4%
1995-11-01 5.6% 12.0% 17.5%
1995-12-01 5.6% 12.4% 18.0%
1996-01-01 5.6% 12.8% 17.7%
1996-02-01 5.5% 12.2% 16.8%
1996-03-01 5.5% 12.2% 17.1%
1996-04-01 5.6% 12.0% 17.1%
1996-05-01 5.6% 12.2% 16.8%
1996-06-01 5.3% 11.8% 16.2%
1996-07-01 5.5% 12.4% 17.1%
1996-08-01 5.1% 11.6% 16.8%
1996-09-01 5.2% 11.4% 15.6%
1996-10-01 5.2% 11.6% 16.3%
1996-11-01 5.4% 11.9% 16.8%
1996-12-01 5.4% 11.8% 16.6%
1997-01-01 5.3% 12.2% 16.8%
1997-02-01 5.2% 11.8% 17.1%
1997-03-01 5.2% 11.7% 16.4%
1997-04-01 5.1% 11.6% 15.9%
1997-05-01 4.9% 11.1% 16.0%
1997-06-01 5.0% 11.4% 16.8%
1997-07-01 4.9% 11.2% 17.1%
1997-08-01 4.8% 11.1% 16.1%
1997-09-01 4.9% 11.2% 16.1%
1997-10-01 4.7% 11.0% 15.1%
1997-11-01 4.6% 10.8% 14.8%
1997-12-01 4.7% 10.5% 14.0%
1998-01-01 4.6% 10.9% 13.9%
1998-02-01 4.6% 10.6% 14.5%
1998-03-01 4.7% 10.5% 14.8%
1998-04-01 4.3% 9.7% 13.5%
1998-05-01 4.4% 10.3% 14.8%
1998-06-01 4.5% 10.6% 14.9%
1998-07-01 4.5% 10.6% 14.6%
1998-08-01 4.5% 10.8% 14.7%
1998-09-01 4.6% 11.0% 15.0%
1998-10-01 4.5% 10.5% 15.7%
1998-11-01 4.4% 9.8% 14.7%
1998-12-01 4.4% 9.6% 13.5%
1999-01-01 4.3% 10.2% 15.2%
1999-02-01 4.4% 10.1% 13.9%
1999-03-01 4.2% 9.9% 14.2%
1999-04-01 4.3% 10.0% 14.2%
1999-05-01 4.2% 9.6% 13.3%
1999-06-01 4.3% 10.0% 13.9%
1999-07-01 4.3% 9.9% 13.4%
1999-08-01 4.2% 9.6% 13.3%
1999-09-01 4.2% 10.2% 14.8%
1999-10-01 4.1% 10.0% 13.8%
1999-11-01 4.1% 9.9% 13.9%
1999-12-01 4.0% 9.6% 13.4%
2000-01-01 4.0% 9.4% 12.7%
2000-02-01 4.1% 9.9% 13.8%
2000-03-01 4.0% 9.6% 13.3%
2000-04-01 3.8% 9.2% 12.6%
2000-05-01 4.0% 9.8% 12.8%
2000-06-01 4.0% 9.3% 12.3%
2000-07-01 4.0% 9.3% 13.4%
2000-08-01 4.1% 9.3% 14.0%
2000-09-01 3.9% 8.9% 13.0%
2000-10-01 3.9% 8.9% 12.8%
2000-11-01 3.9% 9.1% 13.0%
2000-12-01 3.9% 9.2% 13.2%
2001-01-01 4.2% 9.6% 13.8%
2001-02-01 4.2% 9.6% 13.7%
2001-03-01 4.3% 9.8% 13.8%
2001-04-01 4.4% 10.2% 13.9%
2001-05-01 4.3% 9.9% 13.4%
2001-06-01 4.5% 10.4% 14.2%
2001-07-01 4.6% 10.2% 14.4%
2001-08-01 4.9% 11.2% 15.6%
2001-09-01 5.0% 10.8% 15.2%
2001-10-01 5.3% 11.5% 16.0%
2001-11-01 5.5% 11.6% 15.9%
2001-12-01 5.7% 12.2% 17.0%
2002-01-01 5.7% 12.1% 16.5%
2002-02-01 5.7% 11.8% 16.0%
2002-03-01 5.7% 12.5% 16.6%
2002-04-01 5.9% 12.3% 16.7%
2002-05-01 5.8% 11.6% 16.6%
2002-06-01 5.8% 11.8% 16.7%
2002-07-01 5.8% 12.1% 16.8%
2002-08-01 5.7% 12.0% 17.0%
2002-09-01 5.7% 11.7% 16.3%
2002-10-01 5.7% 11.8% 15.1%
2002-11-01 5.9% 12.1% 17.1%
2002-12-01 6.0% 12.1% 16.9%
2003-01-01 5.8% 12.0% 17.2%
2003-02-01 5.9% 12.1% 17.2%
2003-03-01 5.9% 12.0% 17.8%
2003-04-01 6.0% 12.6% 17.7%
2003-05-01 6.1% 12.9% 17.9%
2003-06-01 6.3% 13.2% 19.0%
2003-07-01 6.2% 13.0% 18.2%
2003-08-01 6.1% 12.3% 16.6%
2003-09-01 6.1% 12.8% 17.6%
2003-10-01 6.0% 12.2% 17.2%
2003-11-01 5.8% 12.1% 15.7%
2003-12-01 5.7% 11.7% 16.2%
2004-01-01 5.7% 12.0% 17.0%
2004-02-01 5.6% 11.7% 16.5%
2004-03-01 5.8% 12.0% 16.8%
2004-04-01 5.6% 11.6% 16.6%
2004-05-01 5.6% 12.1% 17.1%
2004-06-01 5.6% 12.0% 17.0%
2004-07-01 5.5% 12.1% 17.8%
2004-08-01 5.4% 11.5% 16.7%
2004-09-01 5.4% 11.7% 16.6%
2004-10-01 5.5% 12.1% 17.4%
2004-11-01 5.4% 11.5% 16.4%
2004-12-01 5.4% 11.7% 17.6%
2005-01-01 5.3% 11.6% 16.2%
2005-02-01 5.4% 12.4% 17.5%
2005-03-01 5.2% 11.8% 17.1%
2005-04-01 5.2% 11.8% 17.8%
2005-05-01 5.1% 11.7% 17.8%
2005-06-01 5.0% 11.1% 16.3%
2005-07-01 5.0% 10.7% 16.1%
2005-08-01 4.9% 11.1% 16.1%
2005-09-01 5.0% 10.8% 15.5%
2005-10-01 5.0% 10.8% 16.1%
2005-11-01 5.0% 11.1% 17.0%
2005-12-01 4.9% 10.5% 14.9%
2006-01-01 4.7% 10.4% 15.1%
2006-02-01 4.8% 10.8% 15.3%
2006-03-01 4.7% 10.5% 16.1%
2006-04-01 4.7% 10.3% 14.6%
2006-05-01 4.6% 10.0% 14.0%
2006-06-01 4.6% 10.4% 15.8%
2006-07-01 4.7% 10.9% 15.9%
2006-08-01 4.7% 10.7% 16.0%
2006-09-01 4.5% 10.6% 16.3%
2006-10-01 4.4% 10.6% 15.2%
2006-11-01 4.5% 10.6% 14.8%
2006-12-01 4.4% 10.0% 14.6%
2007-01-01 4.6% 10.3% 14.8%
2007-02-01 4.5% 9.9% 14.9%
2007-03-01 4.4% 10.0% 14.9%
2007-04-01 4.5% 10.3% 15.9%
2007-05-01 4.4% 9.9% 15.9%
2007-06-01 4.6% 10.6% 16.3%
2007-07-01 4.7% 10.5% 15.3%
2007-08-01 4.6% 10.7% 15.9%
2007-09-01 4.7% 11.2% 15.9%
2007-10-01 4.7% 10.7% 15.4%
2007-11-01 4.7% 10.8% 16.2%
2007-12-01 5.0% 11.7% 16.8%
2008-01-01 5.0% 11.7% 17.8%
2008-02-01 4.9% 11.4% 16.6%
2008-03-01 5.1% 11.4% 16.1%
2008-04-01 5.0% 11.0% 15.9%
2008-05-01 5.4% 13.0% 19.0%
2008-06-01 5.6% 12.9% 19.2%
2008-07-01 5.8% 13.5% 20.7%
2008-08-01 6.1% 13.1% 18.6%
2008-09-01 6.1% 13.5% 19.1%
2008-10-01 6.5% 13.6% 20.0%
2008-11-01 6.8% 14.0% 20.3%
2008-12-01 7.3% 14.8% 20.5%
2009-01-01 7.8% 15.0% 20.7%
2009-02-01 8.3% 16.0% 22.3%
2009-03-01 8.7% 16.5% 22.2%
2009-04-01 9.0% 16.7% 22.2%
2009-05-01 9.4% 17.6% 23.4%
2009-06-01 9.5% 18.0% 24.7%
2009-07-01 9.5% 17.9% 24.3%
2009-08-01 9.6% 18.1% 25.0%
2009-09-01 9.8% 18.4% 25.9%
2009-10-01 10.0% 19.1% 27.2%
2009-11-01 9.9% 19.2% 26.9%
2009-12-01 9.9% 18.8% 26.7%
2010-01-01 9.8% 18.8% 26.1%
2010-02-01 9.8% 18.7% 25.6%
2010-03-01 9.9% 18.8% 26.2%
2010-04-01 9.9% 19.5% 25.4%
2010-05-01 9.6% 18.1% 26.5%
2010-06-01 9.4% 18.2% 25.9%
2010-07-01 9.4% 18.4% 25.9%
2010-08-01 9.5% 17.7% 25.5%
2010-09-01 9.5% 17.9% 25.8%
2010-10-01 9.4% 18.7% 27.2%
2010-11-01 9.8% 18.5% 24.8%
2010-12-01 9.3% 17.9% 25.3%
2011-01-01 9.2% 18.1% 25.7%
2011-02-01 9.0% 17.7% 24.1%
2011-03-01 9.0% 17.6% 24.4%
2011-04-01 9.1% 17.6% 24.6%
2011-05-01 9.0% 17.3% 23.9%
2011-06-01 9.1% 17.1% 24.6%
2011-07-11 9.0% 17.3% 24.7%
2011-08-20 9.0% 17.4% 25.0%
2011-09-01 9.0% 17.3% 24.4%
2011-10-11 8.8% 16.7% 24.2%
2011-11-20 8.6% 17.1% 24.2%
2011-12-30 8.5% 16.7% 23.3%
2012-01-12 8.3% 16.1% 23.7%
2012-02-12 8.3% 16.5% 23.8%
2012-03-12 8.2% 16.3% 25.0%
2012-04-12 8.2% 16.5% 24.8%
2012-05-12 8.2% 16.1% 24.3%
2012-06-12 8.2% 16.3% 23.4%
2012-07-12 8.2% 16.3% 23.6%
2012-08-12 8.0% 16.7% 24.3%
2012-09-12 7.8% 15.4% 23.7%
2012-10-12 7.8% 16.1% 23.9%
2012-11-12 7.7% 15.9% 24.0%
2012-12-12 7.9% 16.6% 24.1%
2013-01-12 8.0% 16.8% 23.9%
2013-02-12 7.7% 16.2% 25.2%
2013-03-12 7.5% 16.1% 24.1%
2013-04-12 7.6% 16.1% 24.1%
2013-05-12 7.5% 16.2% 24.2%
2013-06-12 7.5% 16.1% 23.3%
2013-07-12 7.3% 15.5% 23.2%
2013-08-12 7.2% 15.5% 22.5%
2013-09-12 7.2% 15.0% 21.1%
2013-10-12 7.2% 15.0% 22.2%
2013-11-12 7.0% 14.2% 20.9%
2013-12-12 6.7% 13.5% 20.4%
2014-01-12 6.6% 14.3% 20.8%
2014-02-12 6.7% 14.3% 21.3%
2014-03-12 6.6% 14.5% 20.9%
2014-04-12 6.2% 12.8% 19.1%
2014-05-12 6.3% 13.2% 19.2%
2014-06-12 6.1% 13.3% 20.7%
2014-07-12 6.2% 13.6% 20.0%
2014-08-12 6.1% 13.0% 19.4%
2014-09-12 5.9% 13.7% 19.8%
2014-10-12 5.7% 12.7% 18.7%
2014-11-12 5.8% 12.7% 17.5%
2014-12-12 5.6% 12.4% 16.8%
2015-01-12 5.7% 12.2% 18.8%
2015-02-12 5.5% 11.9% 17.1%
2015-03-12 5.5% 12.3% 17.5%
2015-04-12 5.4% 11.6% 17.1%
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Note: Shaded areas denote recessions. Data are seasonally adjusted.

Source: Economic Policy Institute analysis of Bureau of Labor Statistics Current Population Survey public data series

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New Research Does Not Provide Any Reason to Doubt that CEO Pay Fueled Top 1% Income Growth

A new paper, Firming up Inequality, has been receiving substantial attention in the media for its claim that wage inequality is not occurring within firms but only occurs between firms. The authors claim that their results disprove the claim made by me and others, such as Thomas Piketty and Emmanuel Saez, that the growth of top 1 percent incomes was driven by the pay of executives and those in the financial sector. Though the authors present valuable new data, which offers the possibility of great insights, their current analysis does not disprove that executive pay has fueled top 1 percent income growth. In fact, the study neither examines nor rebuts claims about executive pay.

The authors also offer a “we live in the best possible world” interpretation of their findings—inequality is due to high productivity growth of “superfirms.” This is pure speculation and is completely disconnected from their actual empirical work. A similar study examined productivity trends and contradicts their narrative about superfirms.

Last, there are reasons to be skeptical of their findings because they imply huge wage disparities have opened up between median workers across firms within an industry that are implausible.

1. The paper neither examines nor rebuts the claim that executive pay was a major factor in the doubling of the income share of the top 1 percent.

The paper characterizes itself as a critique of the findings that executive pay (and financial sector pay) has fueled the growth of top 1 percent incomes, citing my work with Natalie Sabadish, as well as Piketty’s:

In the absence of comprehensive evidence on wages paid by firms, it is frequently asserted that inequality within the firm is a driving force leading to an increase in overall inequality. For example, according to Mishel and Sabadish (2014), “a key driver of wage inequality is the growth of chief executive officer earnings and compensation.” Piketty (2013) (p. 315) agrees, noting that “the primary reason for increased income inequality in recent decades is the rise of the supermanager.”

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Strong Wage Growth Would Complement the Safety Net in Reducing Poverty

Last week, we published Broad-Based Wage Growth Is a Key Tool in the Fight Against Poverty, which argued that our fight against poverty over the last few decades has been missing a key element: strong wage growth for the majority of workers. To substantiate this claim, we simulated the impacts on poverty rates in a few scenarios in which wages grew across the board according to different benchmarks (e.g., average wage growth, productivity, and productivity and full employment).

Judging by a recent blog post, Matt Bruenig seems unimpressed. He spends a large part of the first part of his post suggesting that efforts to boost market incomes (i.e., wages) will necessarily fall short because the majority of those who are in poverty (namely, the elderly, children, the disabled, and caregivers) do not work. He ends by assessing the result of our simulation as uninspiring largely because the “employable” poor make up only a minority of those in poverty. Given the alleged ineffectiveness of wage-growth, he calls for increased transfers to fight poverty.

We think Bruenig overlooks two key aspects of the role of wages in reducing overall poverty. First, we believe he ignores the extent to which children would benefit from the spillover of increased wages for their parents. Second, he ignores the fact that people move in and out of poverty—by raising the income floor for many families, broad-based wage growth plays an important role in preventing more of them from falling under the poverty line.

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Yes, Trade Deficits Do Indeed Matter for Jobs

The issue of currency management by U.S. trading partners that increases U.S. trade deficits has become a front-burner issue in debates over the proposed Trans-Pacific Partnership (TPP). The discussion about whether or not trade deficits can really affect U.S. employment, however, occasionally gets very muddled. Here’s a quick attempt to un-muddle a couple different issues.

Trade deficits and overall employment

Trade deficits occurring when the U.S. economy is stuck below full employment and at the zero lower bound (ZLB) on short-term interest rates are a drag on economic growth and overall employment, period. And this describes the U.S. economy today, so a reduction in the trade deficit in the next couple of years spurred by a reversal of trading partners’ currency management would boost growth and jobs.

The logic is simple—exports boost demand for U.S. output while imports reduce demand for U.S. output. When net exports (exports minus imports) fall, then aggregate demand is reduced. Trade deficits are the mirror image of capital inflows into the U.S. economy, and there are times when these capital inflows can reduce domestic interest rates and boost economic activity, providing an offset to the demand-drag caused by trade flows. Today is not one of those times—further downward pressure on already rock-bottom interest rates (particularly since most of these inflows go into U.S. Treasuries) do very little to boost domestic investment to counteract the demand drag from trade flows.

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Millennials Aren’t Lazy: Millennials Aren’t Working Because the Economy Isn’t Either

‘Tis the season to be a graduate and members of the class of 2015 may be wondering: what are my chances in this job market?

The class of 2015 is entering an economy still in recovery from the Great Recession. Job prospects for the class of 2015 are better than for the several classes that graduated before them, but young graduates today still face many economic challenges, including stagnant wages and high levels of unemployment and underemployment. The class of 2015 joins the six classes before it in graduating into an acutely weak labor market and competing with more experienced workers for a limited amount of job opportunities.

Although unemployment rates of young graduates have come down in recent years after skyrocketing during the Great Recession, they still remain elevated compared to where they were before the recession began. Underemployment rates for the class of 2015 also remain high. This means that many young graduates either want a job but have recently given up looking for work, or have a job that does not provide the hours they need.

Among young college graduates who are employed, many are working in a job that does not require a college degree at all. This is another sign of continued slack in the labor market, and a sign that young graduates’ high unemployment is not because they lack the right skills, but because of a continued lack of economy-wide demand for workers.

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Head Start’s 50th Anniversary

This week marks the 50th anniversary of Head Start, a Great Society program that despite spotty funding has brightened the lives of millions of preschoolers. My daughter is one of them.

Like three-quarters of the public schools here in Washington DC, my daughter’s school is a Title I school, where 40 percent or more of the students are from low-income families. Her pre-K program is funded in part by Head Start, even though my daughter and some of her classmates don’t qualify as low income. As it happens, my daughter’s school, HD Cooke Elementary, helped pioneer the Head Start program in 1965 (see cute picture below).

headstartboys

DC has a cutting-edge universal pre-K program and also participates in a pilot program where all kids eat free thanks to a U.S. Department of Agriculture grant. So my daughter not only started attending a great public school at age 3, but eats two nutritious meals a day with her buddies, starting with a meet-and-greet breakfast, the social highlight of her day (and often mine).

DC is somewhat atypical in that there has been an influx of upper-income taxpayers, yet the school system still serves a heavily low-income student body. DC public schools were “majority-minority” before this was true for the United States as a whole.

The growing tax base helped pay to retrofit my daughter’s school to add more natural lighting, a beautiful library and gym, and great playgrounds. In 2010, the school, built in 1909 with an extension dating to 1960, became the first school in DC and one of the oldest in the country to be certified greenProjects like these show how infrastructure and human capital investment can combine with job creation and energy efficiency—a win-win-win unless your name is Koch.

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Don’t Blame the Poor for the Faults of Our Economy

When assigning blame for our nation’s persistent poverty problem, many policymakers tend to focus on underlying demographics or behavior of the poor—factors like racial background or the rise of single parent households, instead of the stark economic reality the poorest Americans have to contend with. While demographics and individual behavior have a place in the policy discussion, growing inequality is the primary reason the poverty rate has remained elevated over the last several decades.

The chart below breaks down the poverty rate and shows how demographic and economic factors affected the poverty rate between 1979 and 2013. Since 1979, increasing inequality has been the largest poverty-boosting factor, outweighing racial identity and family structure and completely eclipsing the effects of overall economic growth and educational attainment in driving down the poverty rate. Despite our growing economy and the fact that poor workers are now more educated than ever, rising inequality has worked to keep low-income people in poverty. This increase in inequality was driven by stagnating wages for low- and middle-income households (for example, 10th percentile real wages were actually lower in 2013 than they were in 1979).

Figure C

Impact on poverty rate of economic, demographic, and education changes, 1979–2013

Factor Effect
Inequality 7.1
Growth -3.4
Education -2.9
Family structure 1.6
Race 1.1
Interaction -0.5

 

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Source: EPI analysis of Current Population Survey Annual Social and Economic Supplement microdata based on Danziger and Gottschalk (1995)

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More Notes on the Gains From Trade and Who Gets Them

The New York Times’ Binyamin Appelbaum wrote an excellent piece yesterday on the costs and benefits of globalization. But because I’ve thought a lot about this topic, I have some hobby-horse issues concerning how economists characterize how large the gains from trade are and how its gains and losses are distributed. Put simply, the overall net benefits of trade are much smaller than commonly advertised, but the regressive redistribution trade causes is considerable.

First, on the gains from trade policy (i.e., how much we should expect national income to rise if we sign trade agreements), Appelbaum refers to a piece from the Peterson Institute of International Economics claiming that trade liberalization added 7.3 percent of GDP to American incomes by 2005—about $9000-10,000 per American household. This is just not true. It’s a wildly inflated number that should not be in the policy debate (and if you need much smarter and better-credentialed people making the some point—here’s Dani Rodrik). This number is an effort to bully people into going along with today’s trade agreements by making them think the stakes are utterly enormous. In fact, even if it was correct (again, it’s not) this study would be irrelevant to today’s trade policy debates because the sum total of economic gains from all post-1982 trade agreements (this includes NAFTA, the completion of the General Agreement on Tariffs and Trade, the formation of the WTO, and the permanent normal trading relations with China) is estimated to be just $9 per household, meaning that  99.9 percent of the gains from trade estimated in the study happened before 1982. So even if trade liberalization really did spur mammoth gains at some point in the (distant) past, the effects were over by the early 1980s.

Second, on the distribution of gains and losses from trade, it is striking to me that so many economists who favor signing every trade agreement that comes down the pike can still feign surprise that expanded trade seems to be bad for most workers’ wages. Put simply, it is completely predicted in textbook trade economics that wages for most workers will fall and inequality will rise when the United States trades more with poorer trading partners. Yes, expanded trade is predicted to lead to higher overall national income, but it is also predicted to redistribute enough income within the United that it can (and is likely to) make most workers worse-off. This should not be a surprise to anyone familiar with the topic.

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H-1B Visas Do Not Create Jobs or Improve Conditions for U.S. Workers

The common wisdom on Capitol Hill, carefully nurtured by corporate lobbyists and campaign cash, is that America needs more high-tech guestworkers, requiring a big increase in the number of H-1B guestworker visas made available each year. A number of senators, including Amy Klobuchar and Orrin Hatch, have introduced legislation to double or triple the number of non-immigrant tech workers who can be imported each year, despite evidence from the U.S. Government Accountability Office, independent researchers, and various media reports that the H-1B is used to lower wages and displace U.S. workers.

The senators endlessly proclaim that H-1B employees are good for our economy, that businesses can’t find enough talent here, that the H-1Bs are innovative, the “best and the brightest,” and that importing them leads to more job creation. In support, they cite a paper by Agnes Scott College researcher Madeline Zavodny, which found that hiring H-1Bs creates jobs for Americans: specifically, that “adding 100 H-1B workers results in an additional 183 jobs among U.S. natives.”

The problem is that it isn’t true. Zavodny’s research couldn’t discern whether the H-1Bs were hired because the economy was growing and jobs were being created—for natives and guestworkers alike—or whether the H-1Bs were responsible for the job growth. (The weakness of her results is demonstrated by another, completely implausible finding she reports, that H-2B unskilled guestworkers are associated with two-and-a-half times greater job creation than the college-educated H-1Bs: 464 jobs for every 100 H-2B guestworkers. The notion that hiring low-wage-earning landscapers and groundskeepers, hotel maids and dishwashers—most of whom have little or no college education—spurs spectacular job growth is ludicrous on its face.)

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Growing Consensus that Labor Market Slack Remains: The Fed Should Stay the Course and Wait to Increase Rates Until the Weakness Has Lessened Substantially

Nominal wage growth’s failure to significantly increase over the last several months (and years) is evidence enough that there’s sufficient labor market slack to convince the Federal Reserve to keep its foot off the economic brakes and not increase short-term interest rates. Nominal hourly wages have grown at only around 2.0-2.3 percent annually, far below wage growth that would be consistent with the Fed’s own 2 percent inflation target, 1.5 percent trend productivity growth, and a stable labor share of income. It’s clear from the evidence that the Fed should not even consider raising interest rates to forestall inflation until wage growth is consistently above this target.

One of the leading forces (besides the 30+ year trend in workers losing bargaining power ) behind sluggish wage growth is the fact that there’s still much labor market slack left in the economy today. The headline unemployment rate underestimates this slack because some of it shows up as cyclically depressed rates of labor force participation instead of elevated unemployment. Over the last couple of years, we’ve been tracking what we call “missing workers”—potential workers who, because of weak job opportunities, are neither employed nor actively seeking a job. In other words, these are people who would be either working or looking for work if job opportunities were significantly stronger. Because jobless workers are only counted in the labor force if they are actively seeking work, these missing workers are not included in the labor force and hence are not classified as officially unemployed.

While it’s clear that some structural forces (aging of the Baby Boomers, for example) are putting downward pressure on labor force participation rates, it’s clear that some of the depressed participation rate is still reflecting cyclical weakness. New evidence released today backs up our “missing worker” interpretation that the unemployment rate is underestimating the true degree of labor market slack because labor force participation remains cyclically depressed. The Goldman Sachs Global Macro Research US Daily (sorry, no link: paywall) points out that research from the New York Fed implies that the overall “jobs gap” may be 3 million, even while the Fed’s estimates of the ”unemployment gap”—the gap between today’s unemployment rate and the rate consistent with stable inflation— is much lower. In short, the headline unemployment rate does indeed continue to obscure how much labor market slack remains. The Goldman team draws out the policy implications:

“This implies much less urgency to start normalizing monetary policy . . . and it is an important reason why we think it would be better for the FOMC to wait until 2016 before starting the normalization process.”

I couldn’t agree more. Sluggish wage growth and depressed labor force participation continue to show signs of a weak economy and the Fed should continue staying the course until the economy is considerably stronger. Acting too soon, would be a mistake for the economy and the people in it.

The TPP Debate: Never Real and No Longer Polite

As Jeff Faux notes, we seem to have reached the part of the debate over the TPP when facts and evidence have largely given way to table-pounding. But given that this is still a live debate and that silly arguments continue to proliferate, here are a couple of clarifications that might be helpful to the debate:

First, a vote for the TPP is a vote to reduce the wages of most American workers and increase inequality. Yes, policies that boost U.S. imports (like the TPP) raise total national income in the United States, but they also redistribute so much more income within the United States that most workers are made worse off. And to be clear about this, the losses are not just the workers directly displaced by trade. Instead, it’s the wages of all workers in the economy who compete with the trade-displaced workers for other jobs—about 100 million workers in all. The way to think of it is that landscapers and waitresses don’t lose their jobs to trade, but their wages suffer from having to compete with laid-off apparel workers looking for work elsewhere.

Now, it’s true that the TPP would reduce wages for most Americans and increase inequality just a little bit. But that’s the direction. And it’s also true that expanded trade can potentially benefit everybody if the winners compensate the losers, but that would require complementary compensatory policies, and ones on a scale much, much larger than the Trade Adjustment Assistance (TAA) often throws in with trade agreements.

And while TPP proponents low-ball the wage-suppressing effect of TPP, they often exaggerate the overall benefits for national income. But the source of both gains and losses from trade are the same: domestic reshuffling of production that sees importable sectors shrink and export sectors expand. So how big are the TPP’s estimated income benefits? Not very big—it’s estimated to increase U.S. GDP by about 0.4 percent cumulatively over the next 12 years, according to a paper by Petri and Plummer (2012) for the Peterson Institute for International Economics (PIIE). Yesterday, the normally-sharp Adam Posen (President of PIIE) put these benefits in an interview at a few tenths of a percent of GDP each year. That’s clearly wrong, even by his own shop’s estimates (roughly ten times higher than what the Petri and Plummer (2012) paper shows). Posen claimed on Twitter that this 0.4-percent-over-12-years estimate was “a lower bound” that “doesn’t show dynamic gains from productivity growth thru competition”. But that’s not right—the Petri and Plummer (2012) PIIE estimate is actually a significant increase relative to an earlier estimate by the same authors, and they justify the newer higher estimate exactly by saying they’re now incorporating estimates of productivity gains stemming from more-competitive firms gaining market share after TPP’s passage.*

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Job Prospects Have Improved for Graduates, but the Class of 2015 Still Faces a Challenging Labor Market

Despite officially ending in June 2009, the Great Recession and its aftermath continues to have a damaging effect on the labor market prospects of young adults. The depth of the recession and the slow pace of recovery since it ended means that seven classes of students have now graduated into a weak labor market and have had to compete with more experienced workers for a limited and slowly growing pool of job opportunities. Recent improvements in economic conditions have begun to finally translate into better job prospects for young graduates, but there is a long way to go before we return to the labor market health of the pre-recession period.

Although the labor market is slowly recovering, unemployment remains elevated for both young high school and college graduates; underemployment rates for these groups are also unusually high. As seen in the charts below, the unemployment rate is 7.2 percent for young college graduates and 19.5 percent for young high school graduates. Although these rates have come down from the peaks after the Great Recession, they are still elevated above their 2007 levels (5.5 percent for college grads and 15.9 percent for high school grads), which were already high compared to the more favorable rates seen in 1995-2000. The Class of 2015 joins a sizable backlog of unemployed college graduates from the last six graduating classes (the classes of 2009–2014) in a difficult job market.

Figure A

Unemployment and underemployment rates of young high school graduates, 1994–2015*

Date Unemployment Underemployment
1994-12-01 14.6% 28.1%
1995-01-01 14.5% 27.9%
1995-02-01 14.1% 27.6%
1995-03-01 13.9% 27.4%
1995-04-01 14.0% 27.4%
1995-05-01 14.0% 27.3%
1995-06-01 14.2% 27.3%
1995-07-01 14.3% 27.4%
1995-08-01 14.4% 27.2%
1995-09-01 14.6% 27.4%
1995-10-01 14.7% 27.2%
1995-11-01 14.9% 27.3%
1995-12-01 15.0% 27.4%
1996-01-01 15.4% 27.5%
1996-02-01 15.5% 27.4%
1996-03-01 15.6% 27.4%
1996-04-01 15.5% 27.2%
1996-05-01 15.5% 27.2%
1996-06-01 15.2% 26.9%
1996-07-01 15.1% 26.9%
1996-08-01 15.1% 27.0%
1996-09-01 15.1% 27.1%
1996-10-01 15.4% 27.4%
1996-11-01 15.4% 27.1%
1996-12-01 15.4% 27.2%
1997-01-01 15.4% 27.3%
1997-02-01 15.5% 27.5%
1997-03-01 15.3% 27.4%
1997-04-01 15.4% 27.5%
1997-05-01 15.1% 27.0%
1997-06-01 15.2% 26.8%
1997-07-01 15.0% 26.3%
1997-08-01 15.0% 26.1%
1997-09-01 14.7% 25.9%
1997-10-01 14.4% 25.5%
1997-11-01 14.3% 25.3%
1997-12-01 14.0% 25.0%
1998-01-01 13.7% 24.5%
1998-02-01 13.6% 24.2%
1998-03-01 13.5% 23.9%
1998-04-01 13.2% 23.7%
1998-05-01 13.3% 24.1%
1998-06-01 13.1% 23.9%
1998-07-01 12.9% 23.7%
1998-08-01 12.9% 23.4%
1998-09-01 13.0% 23.4%
1998-10-01 12.9% 23.1%
1998-11-01 12.8% 23.1%
1998-12-01 12.6% 22.8%
1999-01-01 12.6% 22.7%
1999-02-01 12.6% 22.7%
1999-03-01 12.5% 22.7%
1999-04-01 12.6% 22.6%
1999-05-01 12.4% 22.2%
1999-06-01 12.2% 22.1%
1999-07-01 12.2% 22.0%
1999-08-01 12.1% 21.9%
1999-09-01 12.0% 21.8%
1999-10-01 12.0% 21.7%
1999-11-01 12.1% 21.8%
1999-12-01 12.3% 21.7%
2000-01-01 12.2% 21.6%
2000-02-01 12.1% 21.3%
2000-03-01 12.3% 21.3%
2000-04-01 12.3% 21.2%
2000-05-01 12.3% 21.4%
2000-06-01 12.4% 21.3%
2000-07-01 12.3% 21.2%
2000-08-01 12.4% 21.2%
2000-09-01 12.2% 20.9%
2000-10-01 12.0% 20.9%
2000-11-01 12.1% 20.8%
2000-12-01 12.1% 20.8%
2001-01-01 12.2% 20.9%
2001-02-01 12.2% 21.1%
2001-03-01 12.1% 21.0%
2001-04-01 12.2% 21.1%
2001-05-01 11.9% 20.7%
2001-06-01 12.0% 20.9%
2001-07-01 12.3% 21.1%
2001-08-01 12.5% 21.3%
2001-09-01 12.9% 22.0%
2001-10-01 13.3% 22.5%
2001-11-01 13.6% 23.2%
2001-12-01 13.9% 23.8%
2002-01-01 14.2% 24.1%
2002-02-01 14.5% 24.5%
2002-03-01 14.9% 25.1%
2002-04-01 15.2% 25.4%
2002-05-01 15.6% 25.9%
2002-06-01 16.0% 26.3%
2002-07-01 16.3% 27.0%
2002-08-01 16.6% 27.4%
2002-09-01 16.5% 27.6%
2002-10-01 16.5% 27.5%
2002-11-01 16.6% 27.5%
2002-12-01 16.4% 27.2%
2003-01-01 16.6% 27.5%
2003-02-01 16.6% 27.8%
2003-03-01 16.6% 27.9%
2003-04-01 16.6% 27.9%
2003-05-01 16.8% 28.2%
2003-06-01 17.0% 28.5%
2003-07-01 17.1% 28.9%
2003-08-01 17.1% 28.9%
2003-09-01 17.2% 29.0%
2003-10-01 17.4% 29.5%
2003-11-01 17.6% 29.6%
2003-12-01 17.6% 29.8%
2004-01-01 17.5% 29.6%
2004-02-01 17.3% 29.5%
2004-03-01 17.4% 29.8%
2004-04-01 17.4% 29.8%
2004-05-01 17.3% 29.8%
2004-06-01 17.0% 29.7%
2004-07-01 16.8% 29.1%
2004-08-01 16.6% 28.9%
2004-09-01 16.6% 28.6%
2004-10-01 16.4% 28.4%
2004-11-01 16.1% 28.3%
2004-12-01 16.0% 28.1%
2005-01-01 16.0% 27.8%
2005-02-01 16.2% 27.8%
2005-03-01 16.1% 27.7%
2005-04-01 16.1% 27.7%
2005-05-01 16.1% 27.6%
2005-06-01 16.2% 27.7%
2005-07-01 16.1% 27.7%
2005-08-01 16.4% 27.9%
2005-09-01 16.4% 27.8%
2005-10-01 16.3% 27.6%
2005-11-01 16.2% 27.4%
2005-12-01 15.9% 27.1%
2006-01-01 16.0% 27.1%
2006-02-01 15.9% 26.9%
2006-03-01 15.7% 26.6%
2006-04-01 15.8% 26.5%
2006-05-01 15.7% 26.4%
2006-06-01 15.4% 26.1%
2006-07-01 15.5% 26.1%
2006-08-01 15.4% 26.0%
2006-09-01 15.5% 26.1%
2006-10-01 15.5% 26.5%
2006-11-01 15.5% 26.4%
2006-12-01 15.8% 26.9%
2007-01-01 15.6% 26.9%
2007-02-01 15.4% 26.9%
2007-03-01 15.3% 27.0%
2007-04-01 15.2% 27.0%
2007-05-01 15.2% 26.9%
2007-06-01 15.5% 27.0%
2007-07-01 15.5% 27.0%
2007-08-01 15.6% 26.9%
2007-09-01 15.5% 26.7%
2007-10-01 15.5% 26.5%
2007-11-01 15.5% 26.5%
2007-12-01 15.9% 26.8%
2008-01-01 16.1% 27.1%
2008-02-01 16.4% 27.5%
2008-03-01 16.9% 28.0%
2008-04-01 16.9% 28.4%
2008-05-01 17.2% 28.9%
2008-06-01 17.4% 29.7%
2008-07-01 18.0% 30.6%
2008-08-01 18.2% 31.0%
2008-09-01 18.6% 31.7%
2008-10-01 19.0% 32.5%
2008-11-01 19.5% 33.4%
2008-12-01 19.7% 34.1%
2009-01-01 20.2% 34.9%
2009-02-01 20.9% 35.8%
2009-03-01 21.3% 36.7%
2009-04-01 21.9% 37.6%
2009-05-01 22.4% 38.5%
2009-06-01 22.9% 39.3%
2009-07-01 23.5% 40.5%
2009-08-01 24.4% 41.9%
2009-09-01 25.1% 43.0%
2009-10-01 25.9% 44.1%
2009-11-01 26.6% 44.8%
2009-12-01 27.1% 45.4%
2010-01-01 27.6% 46.0%
2010-02-01 27.8% 46.5%
2010-03-01 27.8% 46.5%
2010-04-01 28.0% 46.7%
2010-05-01 28.1% 46.8%
2010-06-01 28.1% 46.8%
2010-07-01 28.0% 46.5%
2010-08-01 27.8% 46.6%
2010-09-01 27.7% 46.6%
2010-10-01 27.4% 46.3%
2010-11-01 27.2% 46.6%
2010-12-01 27.1% 46.6%
2011-01-01 26.9% 46.6%
2011-02-01 26.6% 46.3%
2011-03-01 26.8% 46.4%
2011-04-01 26.7% 46.4%
2011-05-01 26.5% 46.5%
2011-06-01 26.4% 46.5%
2011-07-01 26.7% 47.2%
2011-08-01 26.6% 47.0%
2011-09-01 26.4% 46.8%
2011-10-01 26.2% 46.6%
2011-11-01 26.3% 46.3%
2011-12-01 26.2% 46.1%
2012-01-01 26.1% 45.8%
2012-02-01 26.1% 45.7%
2012-03-01 25.8% 45.2%
2012-04-01 25.7% 44.9%
2012-05-01 26.0% 44.9%
2012-06-01 26.2% 44.8%
2012-07-01 25.9% 44.2%
2012-08-01 25.9% 44.2%
2012-09-01 26.0% 44.3%
2012-10-01 26.1% 44.4%
2012-11-01 25.9% 44.3%
2012-12-01 25.7% 44.2%
2013-01-01 25.4% 43.9%
2013-02-01 25.2% 43.7%
2013-03-01 25.2% 43.8%
2013-04-01 25.1% 43.8%
2013-05-01 24.8% 43.7%
2013-06-01 25.0% 43.9%
2013-07-01 24.6% 43.6%
2013-08-01 24.8% 43.5%
2013-09-01 24.6% 43.1%
2013-10-01 24.3% 42.7%
2013-11-01 24.0% 42.4%
2013-12-01 23.4% 41.9%
2014-01-01 23.1% 41.7%
2014-02-01 23.0% 41.7%
2014-03-01 22.9% 41.5%
2014-04-01 22.5% 41.1%
2014-05-01 22.0% 40.6%
2014-06-01 21.4% 40.1%
2014-07-01 21.3% 40.0%
2014-08-01 20.6% 39.5%
2014-09-01 20.3% 39.1%
2014-10-01 20.1% 38.7%
2014-11-01 20.0% 38.5%
2014-12-01 19.9% 38.0%
2015-01-01 19.9% 37.7%
2015-02-01 19.8% 37.3%
2015-03-01 19.5% 37.0%
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* Data reflect 12-month moving averages; data for 2015 represent 12-month average from April 2014 to March 2015.

Note: Shaded areas denote recessions. Underemployment data are only available beginning in 1994. Data are for high school graduates age 17–20 who are not enrolled in further schooling.

Source: EPI analysis of basic monthly Current Population Survey microdata

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The Policy Failures Exposed by the New York Times’ Nail Salon Investigation

An eye-opening story published last week by the New York Times revealed how manicurists in New York’s booming nail salon industry are subject to brazen exploitation. Workers are exposed to dangerous chemicals, expected to work excessively long hours, subject to racial and ethnic discrimination and verbal abuse, and regularly paid less than the minimum wage—if they’re paid at all. New hires are even forced to pay their employers a “training fee,” before working unpaid for weeks until their employer arbitrarily deems them worthy of getting paid.

The good news is that New York Governor Andrew Cuomo has already ordered emergency measures to investigate and combat these abuses. The bad news is that what’s happened in New York is the product of national policy failures that almost guarantee these same practices are not unique to the Empire State, or to the nail salon industry.

Many of the manicurists described in the piece are undocumented immigrants. Failure to protect any group of workers—even those without lawful immigration status—is damaging to all workers. When businesses can exploit immigrant workers who cannot speak out for fear of deportation, it lowers the wages of other workers in the same or similar fields—whether they are authorized to work or not. Regardless of how someone has entered the country, if they are engaged in employment, they should have some practical and accessible recourse against exploitative labor practices. Legalization would, by itself, raise labor standards for tens of millions of Americans, along with the immigrants most directly affected.

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JOLTS Data Suggest a Sideways-Moving Economy

This morning’s Job Openings and Labor Turnover Survey (JOLTS) report rounds out the employment situation for March. Last week, we saw substantial downward revisions to payroll employment, revisions that exposed one of the slowest job gains in recent years. The job openings data reveal the same story: the recovery may be slowing. That said, April job growth was considerably stronger, but taking into account the most recent three month job-growth average, the economy won’t resemble the strength of the pre-recession economy (such as it was) until August 2017.

The total number of job openings fell slightly to 5.0 million in March and the number of unemployed workers fell slightly to 8.6 million. Taken together, the result was a job-seekers-to-job-openings ratio that held steady at 1.7. This ratio has been declining steadily from its high of 6.8-to-1 in July 2009, as shown in the figure below.

JOLTS

The job-seekers ratio, December 2000–March 2015

Month Unemployed job seekers per job opening
Dec-2000 1.1
Jan-2001 1.1
Feb-2001 1.3
Mar-2001 1.3
Apr-2001 1.3
May-2001 1.4
Jun-2001 1.5
Jul-2001 1.5
Aug-2001 1.7
Sep-2001 1.8
Oct-2001 2.1
Nov-2001 2.3
Dec-2001 2.3
Jan-2002 2.3
Feb-2002 2.4
Mar-2002 2.3
Apr-2002 2.6
May-2002 2.4
Jun-2002 2.5
Jul-2002 2.5
Aug-2002 2.4
Sep-2002 2.5
Oct-2002 2.4
Nov-2002 2.4
Dec-2002 2.8
Jan-2003 2.3
Feb-2003 2.5
Mar-2003 2.8
Apr-2003 2.8
May-2003 2.8
Jun-2003 2.8
Jul-2003 2.8
Aug-2003 2.7
Sep-2003 2.9
Oct-2003 2.7
Nov-2003 2.6
Dec-2003 2.5
Jan-2004 2.5
Feb-2004 2.4
Mar-2004 2.5
Apr-2004 2.4
May-2004 2.2
Jun-2004 2.4
Jul-2004 2.1
Aug-2004 2.2
Sep-2004 2.1
Oct-2004 2.1
Nov-2004 2.3
Dec-2004 2.1
Jan-2005 2.2
Feb-2005 2.1
Mar-2005 2.0
Apr-2005 1.9
May-2005 2.0
Jun-2005 1.9
Jul-2005 1.8
Aug-2005 1.8
Sep-2005 1.8
Oct-2005 1.8
Nov-2005 1.7
Dec-2005 1.7
Jan-2006 1.7
Feb-2006 1.7
Mar-2006 1.6
Apr-2006 1.6
May-2006 1.6
Jun-2006 1.6
Jul-2006 1.8
Aug-2006 1.6
Sep-2006 1.5
Oct-2006 1.5
Nov-2006 1.5
Dec-2006 1.5
Jan-2007 1.6
Feb-2007 1.5
Mar-2007 1.4
Apr-2007 1.5
May-2007 1.5
Jun-2007 1.5
Jul-2007 1.6
Aug-2007 1.6
Sep-2007 1.6
Oct-2007 1.7
Nov-2007 1.7
Dec-2007 1.8
Jan-2008 1.8
Feb-2008 1.9
Mar-2008 1.9
Apr-2008 2.0
May-2008 2.1
Jun-2008 2.3
Jul-2008 2.4
Aug-2008 2.6
Sep-2008 3.0
Oct-2008 3.1
Nov-2008 3.4
Dec-2008 3.7
Jan-2009 4.4
Feb-2009 4.6
Mar-2009 5.4
Apr-2009 6.1
May-2009 6.0
Jun-2009 6.2
Jul-2009 6.8
Aug-2009 6.5
Sep-2009 6.2
Oct-2009 6.5
Nov-2009 6.3
Dec-2009 6.1
Jan-2010 5.6
Feb-2010 5.9
Mar-2010 5.7
Apr-2010 4.9
May-2010 5.1
Jun-2010 5.3
Jul-2010 5.0
Aug-2010 5.1
Sep-2010 5.2
Oct-2010 4.8
Nov-2010 4.9
Dec-2010 4.9
Jan-2011 4.8
Feb-2011 4.5
Mar-2011 4.4
Apr-2011 4.5
May-2011 4.6
Jun-2011 4.4
Jul-2011 4.0
Aug-2011 4.4
Sep-2011 3.9
Oct-2011 4.0
Nov-2011 4.1
Dec-2011 3.7
Jan-2012 3.5
Feb-2012 3.6
Mar-2012 3.3
Apr-2012 3.5
May-2012 3.4
Jun-2012 3.4
Jul-2012 3.5
Aug-2012 3.4
Sep-2012 3.3
Oct-2012 3.3
Nov-2012 3.2
Dec-2012 3.4
Jan-2013 3.3
Feb-2013 3.0
Mar-2013 3.0
Apr-2013 3.1
May-2013 3.0
Jun-2013 3.0
Jul-2013 3.0
Aug-2013 2.9
Sep-2013 2.8
Oct-2013 2.7
Nov-2013 2.7
Dec-2013 2.6
Jan-2014 2.6
Feb-2014 2.5
Mar-2014 2.5
Apr-2014 2.2
May-2014 2.1
Jun-2014 2.0
Jul-2014 2.0
Aug-2014 1.9
Sep-2014 2.0
Oct-2014 1.9
Nov-2014 1.9
Dec-2014 1.8
Jan-2015 1.8
Feb-2015 1.7
Mar-2015 1.7

 

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Note: Shaded areas denote recessions.

Source: EPI analysis of Bureau of Labor Statistics Job Openings and Labor Turnover Survey and Current Population Survey

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TPP: Obama’s Folly

This post originally appeared on The Huffington Post.

Barack Obama’s petulant criticism last Friday of Democrats who do not support his proposed Trans-Pacific Partnership reminds me of the old tongue-in-cheek advice to young lawyers: “If the facts are on your side, pound the facts. If the law is on your side, pound the law. If neither is on your side, pound the other lawyer.”

The facts are definitely not on the president’s side. For two decades the trade deals negotiated by the last three presidents have lowered U.S. wages, lost jobs and generated a chronic trade deficit that requires our country to borrow more money every year in order to pay for imports. The president’s main argument that exports have risen, without mentioning that imports have risen much faster, is now transparently deceitful to anyone who can add and subtract.

Neither is the law in his corner. As did his predecessors, Bill Clinton and George Bush, he assures Americans that this deal will be different because, you see, it will protect workers. But the secret draft, which had to be revealed to Americans by Wikileaks, shows that once again a trade agreement will be used to enhance the power of multinational corporate investors over people who have to work for a living. As AFL-CIO President Richard Trumka pointed out recently, the Office of the U.S. Trade Representative, which is charged with negotiating and enforcing the deal, does not even believe that murder and other brutal acts committed against labor union activists violate the “worker-protection” clauses to trade agreements.

So, like a lawyer trained to defend the indefensible, Obama is desperately pounding the opposition. They are “just wrong,” he says, without showing us why. He accuses them of “making stuff up”—that is, that they are liars. He whines that they are “whupping on me.” He charges, nonsensically, that they “want to pull up the drawbridge and isolate themselves.”

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Black Unemployment Rate Falls to Single Digits in April as Black Men Catch Up to Black Women

In January of this year, I projected that the black unemployment rate would reach single digits by mid-2015. That happened this month as job growth of 223,000 in April was more in line with the monthly average in 2014. At 9.6 percent, the black unemployment rate is the lowest it’s been since June 2008 and nearly two (1.8) percentage points below where it was this time last year. Though this is an important milestone, the rate remains above the annual average of 8.3 percent in 2007, meaning there’s still much further to go before we declare a full recovery for black workers.

Though the unemployment rate for black men fell to nearly the same rate for black women in April, black men and black women have made very unequal progress, as can be seen in Figure A. This is an amplification of the fact that although men lost more jobs than women during the recession, they have also rebounded faster in the recovery.

Figure A

Black unemployment rate by gender, December 2007–April 2015

Black Men Black Women
Dec-2007 10.0% 8.0%
Jan-2008 10.0% 8.2%
Feb-2008 9.0% 7.8%
Mar-2008 9.8% 8.7%
Apr-2008 9.2% 8.1%
May-2008 10.4% 8.9%
Jun-2008 10.7% 8.3%
Jul-2008 11.8% 8.3%
Aug-2008 11.4% 9.9%
Sep-2008 12.8% 9.9%
Oct-2008 13.3% 9.6%
Nov-2008 13.6% 9.7%
Dec-2008 14.9% 9.6%
Jan-2009 15.7% 10.1%
Feb-2009 16.5% 11.2%
Mar-2009 16.6% 11.0%
Apr-2009 18.4% 11.9%
May-2009 17.8% 12.4%
Jun-2009 17.5% 12.5%
Jul-2009 17.2% 12.7%
Aug-2009 17.7% 12.3%
Sep-2009 17.6% 13.3%
Oct-2009 18.3% 13.6%
Nov-2009 18.8% 13.0%
Dec-2009 18.4% 14.0%
Jan-2010 19.2% 14.1%
Feb-2010 19.2% 13.3%
Mar-2010 20.6% 13.5%
Apr-2010 18.7% 14.7%
May-2010 17.5% 13.6%
Jun-2010 18.4% 12.4%
Jul-2010 17.8% 13.7%
Aug-2010 18.1% 14.0%
Sep-2010 18.3% 14.0%
Oct-2010 17.6% 13.9%
Nov-2010 18.1% 14.4%
Dec-2010 17.3% 13.9%
Jan-2011 18.1% 13.7%
Feb-2011 17.6% 13.7%
Mar-2011 18.2% 13.6%
Apr-2011 18.6% 14.6%
May-2011 18.5% 14.3%
Jun-2011 17.9% 14.5%
Jul-2011 17.4% 14.4%
Aug-2011 18.6% 14.5%
Sep-2011 17.3% 14.7%
Oct-2011 16.6% 13.0%
Nov-2011 17.6% 13.9%
Dec-2011 16.7% 14.3%
Jan-2012 13.7% 13.4%
Feb-2012 15.6% 12.7%
Mar-2012 15.1% 13.1%
Apr-2012 15.0% 11.7%
May-2012 14.9% 12.3%
Jun-2012 15.3% 13.5%
Jul-2012 15.7% 12.6%
Aug-2012 15.1% 12.9%
Sep-2012 15.2% 12.1%
Oct-2012 15.5% 13.0%
Nov-2012 14.5% 12.3%
Dec-2012 14.8% 13.2%
Jan-2013 14.4% 13.2%
Feb-2013 14.2% 13.5%
Mar-2013 13.7% 12.6%
Apr-2013 13.8% 12.5%
May-2013 14.9% 12.2%
Jun-2013 14.7% 12.9%
Jul-2013 13.5% 11.4%
Aug-2013 14.8% 11.3%
Sep-2013 15.4% 11.0%
Oct-2013 14.0% 12.1%
Nov-2013 13.4% 11.5%
Dec-2013 12.7% 11.1%
Jan-2014 13.3% 11.0%
Feb-2014 13.7% 10.4%
Mar-2014 12.8% 11.7%
Apr-2014 12.0% 10.9%
May-2014 12.2% 10.7%
Jun-2014 11.7% 9.9%
Jul-2014 12.1% 10.8%
Aug-2014 11.7% 11.4%
Sep-2014 11.9% 10.2%
Oct-2014 11.6% 10.2%
Nov-2014 12.1% 10.1%
Dec-2014 12.0% 9.0%
Jan-2015 11.5% 9.3%
Feb-2015 11.3% 9.5%
Mar-2015 10.7% 9.6%
Apr-2015 9.7% 9.5%
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Between April 2014 and April 2015, job gains for black men far outpaced those of black women (an increase of 7.6 percent and 3.9 percent, respectively). As a result, black men’s unemployment rate declined 2.3 percentage points over the last year, compared to a decline of 1.4 percentage points for black women. Since the end of 2014, employment growth for black women has slowed even further, leaving black women’s unemployment rate 0.5 percentage points higher in April 2015 than it was in December 2014. Meanwhile, black men’s unemployment rate was 2.3 percentage points lower in April 2015 than December 2014.

Although caution should always be used in placing too much emphasis on a single month of data, the last four months raise some questions about whether the recovery has stalled for black women and why.

Today’s Jobs Data More Evidence That Currency Manipulation Is Not a Problem That’s Behind Us

Recent debates over the Trans-Pacific Partnership (TPP) have highlighted the failure of the treaty to include a provision to stop countries from actively weakening the value of their own currency in order to run trade surpluses.

The way this currency management works is that countries (most notably China, though there are many others as well) buy assets denominated in dollars—mostly U.S. Treasuries. This boosts the demand for dollars in global markets and weakens demand for the Chinese renminbi. This in turn increases the value of the dollar, which makes U.S. exports expensive in global markets and makes foreign imports cheaper to U.S. consumers. The result is that exports are suppressed while imports grow and the U.S. trade deficit widens.

Opponents of including a currency provision in the TPP have made a number of bad arguments, and one of them is that currency management was once a problem, but isn’t anymore. They often point to recent appreciation of the Chinese currency as evidence that the problem of currency management is behind us. But this is incorrect—the evidence that currency management is still a problem is simply that foreign purchases of dollar-denominated assets remained strong in 2014. There is zero doubt that absent this continued intervention, the U.S. dollar would weaken. Further, the nearly $1 trillion in purchases of dollar denominated assets that has characterized each year since 2008 has led to a large stock of dollar assets held by foreign investors and governments, and this large stock (over and above the annual flow of dollar purchases) also keeps the value of the dollar stronger than it would otherwise be.

Further, two pieces of recent evidence suggest strongly that excess dollar strength could be becoming a real drag on recovery. In the first quarter numbers on gross domestic product, the rising trade deficit knocked 1.3 percentage points off the economy’s annualized growth rate. Then trade data for March came in showing a very large rise in the deficit. Finally, today’s jobs report shows that growth of employment in manufacturing has stagnated in the last quarter (rising at an average monthly rate of less than 2,000 jobs), after rising at an average monthly rate of 18,000 in 2014.

A $12 Minimum Wage Would Give More Than One in Four Working Moms a Raise

This post is crossposted on the National Women’s Law Center’s Womenstake Blog.

Here’s a Mother’s Day gift idea for Congress: Rather than getting mom flowers or chocolate, how about passing a policy that increases economic security for families, injects billions of dollars into communities, and ensures that women and people of color are paid more fairly?

That’s just what the Raise the Wage Act would do. Introduced last week by Sen. Patty Murray (D-WA) and Rep. Robert “Bobby” Scott (D-VA), the Raise the Wage Act would increase the minimum wage from $7.25 to $12 per hour by 2020 and then “index” it to median wages, so that the minimum would automatically go up as overall wages rose, beginning in 2021. It also would gradually phase out the lower tipped minimum cash wage so that tipped workers would be paid the regular minimum wage before tips—something that only happens in a handful of states today. Federal law currently allows employers to pay tipped workers a pre-tip wage of just $2.13 per hour, a policy that leaves tipped workers nearly twice as likely to live in poverty as other workers.

Passing the Raise the Wage Act would especially help women, particularly women of color. Women are the majority (56 percent) of workers who would benefit from increasing the federal minimum wage to $12 by 2020. As shown in the figure below, 30 percent of working women—roughly 20 million—would get a raise. The gains are even more substantial for working women of color, 37 percent of whom—8.6 million—would see their pay increase. (All of these statistics are available in EPI’s analysis of the proposal.)

Fig. 1

Share of selected groups that would get a raise by increasing the federal minimum wage to $12 by 2020

Share of each group that would get a raise by increasing the federal minimum wage to $12 by 2020
Women 29.6%
Working moms 27.3%
Single moms 39.6%
Women of color 37.1%
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Source: EPI analysis of Raise the Wage Act using Current Population Survey Outgoing Rotation Group microdata

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Summing Up the Data on Jobs and Wages

Recent weeks have seen a raft of pretty bad economic news. Last month’s jobs report showed a marked slowdown in employment growth—with 126,000 new jobs reported in March, down from the 269,000 average pace of growth that had characterized the previous 12 months. And gross domestic product (GDP) in the first quarter was essentially stagnant—rising at just a 0.2 percent annualized rate. March trade data showed an enormous rise in the trade deficit, which will likely drive the revised numbers on GDP into negative territory.

Given this backdrop, there was a bit more at stake than usual in today’s monthly jobs report. So, what’s the verdict? Mixed.

Job growth in April was 223,000—much closer to the 2014 year-round average than March’s numbers. And the unemployment rate ticked down (insignificantly) to 5.4 percent. Both of these numbers are good news.

But the weak March job growth was revised down even further, to 85,000. The prime-age employment-to-population ratio remains slightly off its February peak (77.2 percent down from 77.3).

Worse, some very nascent signs of pickup in wage growth seem to have melted away. The three-month change in average hourly earnings picked up to 2.7 percent in the March jobs report, but receded down to 2.3 percent in this month’s data. For the year, average hourly earnings rose 2.2 percent—the same desultory pace that has characterized essentially the entire recovery. For production workers (80 percent of the private sector workforce) wage growth was even weaker, increasing just 1.9 percent over the past year.

Where does all of this leave us?

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Indiana Politicians Act to Drive Down Constituents’ Wages

While policy makers in Washington are at least paying lip service to the need to lift the stagnant wages of America’s middle class, politicians in state capitals across the country are cutting the wages and benefits of public employees and school teachers, passing so-called “right-to-work” laws to weaken unions, and cutting back on unemployment insurance with the aim of forcing jobless workers to take any job, no matter how poor.

Indiana is a leader in this sorry parade. It passed right-to-work two years ago, and now the legislature has repealed (with the support of a governor with aspirations for national office) the state’s eight-decade old prevailing-wage law, which required contractors on state-funded construction projects to pay their construction workers the average wage in the locality where the work is done. Like the federal Davis-Bacon Act, the rationale for the law was straightforward: The state government should not be in the business of driving down wages. When it pays for construction work, rather than forcing a race to the bottom, it should respect local area standards.

But powerful interests, from the Koch Brothers and the American Legislative Exchange Council to the Associated Builders and Contractors, like the idea of a race to the bottom. From their perspective, the best wage is the lowest wage they can get away with, since companies’ profit margins will be higher with every dollar that isn’t paid to a construction worker. Indiana politicians are dancing to the tune the Kochs are calling.

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What to Watch on Jobs Day: Looking for a Pickup in Job Growth, Signs of Wage Growth, and a Glimpse at the Future for the Graduating Class of 2015

Last month’s jobs numbers—plus the downward revisions to previous months—were disappointing at best. When the latest jobs report comes out this Friday, we’ll be watching the top-line employment numbers to see if that’s just a blip or a new trend. The recent slowdown in job growth could be largely due to unseasonably harsh weather. If that’s the case, then we can expect a solid bounce back this month. If not, and slower growth in recent months is actually the start of a new trend, more trouble may lie ahead—and policymakers should take the need to spur a stronger recovery more seriously.

Before the recent slowdown in job growth, it looked like the main lagging indicator was wage growth. Last week, the Employment Cost Index showed a pick-up in growth with year-over-year civilian nominal compensation rising 2.6 percent. While this is a bit faster growth than some other wage series indicate, it’s still far below  thresholds that should prompt the Federal Reserve to begin raising interest rates to slow down the economy out of fear of wage-led inflationary pressure. It is true that real (inflation-adjusted) wage growth has been healthy in recent months, but this is driven by rapidly decelerating inflation, not strong nominal wage growth. The rapid price disinflation is driven in turn by a combination of transitory shocks (e.g., oil price declines) which will likely not continue and overall economic weakness. And, the fact remains that there is a long history of poor wages to make up. All indicators of wage growth need to be consistently stronger for a full recovery.

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A $12 Minimum Wage Would Bring the United States in Line with International Peers

In We Can Afford a $12 Federal Minimum Wage in 2020, Larry Mishel, John Schmitt, and I explain that raising the federal minimum wage to $12 by 2020 is an eminently achievable and worthwhile goal. As the paper explains, $12 in 2020 would equal a modest 11 percent increase in purchasing power over the 1968 minimum wage, yet would essentially be the same as the 1968 minimum’s value as a percentage of the typical worker’s wage. In other words, raising the minimum wage to $12 by 2020 would simply restore the 1968 relationship between what minimum-wage workers were paid relative to what typical workers were paid—and in doing so, would raise the wages of more than a quarter of all working Americans.

Raising the federal minimum wage to $12 by 2020 would also bring the U.S. minimum wage more in line with the rest of the developed world. This relationship between the minimum wage and the median wage—also known as the “Kaitz index”—is tracked by the Organisation for Economic Co-operation and Development (OECD). As shown in the figure below, according to the OECD, in 2013, the United States had the third-lowest minimum-to-median wage ratio among developed countries—only Mexico and the Czech Republic had lower Kaitz indices. However, if the United States raised its minimum wage to $12, and other countries’ minimum-to-median ratios were to remain unchanged, the United States would move to the eleventh spot. 1


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CEA Report Is Simply Not That Relevant to Current Trade Policy Debates

The White House Council of Economic Advisers (CEA) released a report last Friday touting the benefits of international trade for the American economy. The paper provides an interesting review of research on a range of trade’s economic effects, yet the report is largely irrelevant to current trade policy debates. Worse, when its findings are related to current trade policy debates, they are often reported in ways that could mislead readers.

The weaknesses of the report generally fall into one of three areas.

First, the overwhelming focus of the report touts the benefits of trade flows qua trade flows, and often even compares outcomes relative to a hypothetical scenario where trade barriers were raised so high that the U.S. economy became completely autarkic. Academics might find this interesting, but nobody in today’s economic debate argues for increasing U.S. trade barriers, let alone to historically never-seen levels. The CEA acknowledges this explicitly by noting that barriers to foreign imports coming into the U.S. economy are already extremely low and unlikely to be reduced significantly by treaties like the Trans-Pacific Partnership (TPP). Several times, the report alludes to potential benefits of the TPP and other treaties in pulling down barriers to U.S. exports abroad, but fails to mention what is by far the most important barrier to U.S. export success—several major trading partners (including some proposed TPP partners) managing the value of their own currencies for competitive gain vis-à-vis the United States.

Second, the report spends very little time on the most important non-currency issue regarding trade policy: the distribution of gains and losses. When the report does cite research on distribution, it is woefully incomplete, looking only at how the benefits from trade are distributed while ignoring the costs. The research on the comprehensive costs and benefits of this issue is pretty clear:  trade with labor abundant trading partners, like many of those in the proposed TPP, tends to lower wages for the majority of U.S. workers and provide gains only to the upper end of the income distribution.

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