Actually, the U.S. labor market remains very strong
It is indisputable that the U.S. labor market is strong. The share of the population ages 25–54 with a job is at a 23-year high, median household incomes rose 4.0% last year, and real wage growth over the last four years has been broad-based and strong. The economy has not only regained the nearly 22 million jobs lost in the pandemic recession, but also added another 6.5 million.
Are some folks still having a hard time? Absolutely. Even when the unemployment rate is low, there are still sidelined workers, and it remains difficult for many families to make ends meet on wages that are still too low. Unfortunately, that’s a long-term phenomenon stemming from a too-stingy U.S. welfare state, rising inequality, and the legacy of anemic wage growth during past economic recoveries. But when comparing the labor market with four years ago (during the pandemic recession) or even before the pandemic began, the answer is clear: More workers have jobs and wages are beating inflation by solid margins.
More people have jobs
If I had to pick one, the best measure of labor market strength is the prime-age employment-to-population ratio (EPOP). This measure takes into account population growth by looking at the share of the population between the ages of 25 and 54—and hence not a group likely to be in school or retired—who have a job. As shown in Figure A, this prime-age EPOP is now at 80.9%, the highest share since 2001.
Prime-age employment-to-population ratio at 23-year high: Employment-to-population ratio of workers ages 25–54, 1989–2024
date | Employment to population ratio |
---|---|
Jan-1989 | 80.0% |
Feb-1989 | 79.9% |
Mar-1989 | 79.9% |
Apr-1989 | 79.8% |
May-1989 | 79.8% |
Jun-1989 | 79.8% |
Jul-1989 | 79.8% |
Aug-1989 | 79.9% |
Sep-1989 | 80.0% |
Oct-1989 | 79.9% |
Nov-1989 | 80.2% |
Dec-1989 | 80.1% |
Jan-1990 | 80.2% |
Feb-1990 | 80.2% |
Mar-1990 | 80.1% |
Apr-1990 | 79.9% |
May-1990 | 79.9% |
Jun-1990 | 79.8% |
Jul-1990 | 79.6% |
Aug-1990 | 79.5% |
Sep-1990 | 79.4% |
Oct-1990 | 79.4% |
Nov-1990 | 79.2% |
Dec-1990 | 79.0% |
Jan-1991 | 78.9% |
Feb-1991 | 78.9% |
Mar-1991 | 78.7% |
Apr-1991 | 79.0% |
May-1991 | 78.6% |
Jun-1991 | 78.7% |
Jul-1991 | 78.6% |
Aug-1991 | 78.5% |
Sep-1991 | 78.6% |
Oct-1991 | 78.5% |
Nov-1991 | 78.4% |
Dec-1991 | 78.3% |
Jan-1992 | 78.4% |
Feb-1992 | 78.2% |
Mar-1992 | 78.2% |
Apr-1992 | 78.4% |
May-1992 | 78.4% |
Jun-1992 | 78.5% |
Jul-1992 | 78.4% |
Aug-1992 | 78.4% |
Sep-1992 | 78.3% |
Oct-1992 | 78.2% |
Nov-1992 | 78.2% |
Dec-1992 | 78.2% |
Jan-1993 | 78.2% |
Feb-1993 | 78.1% |
Mar-1993 | 78.2% |
Apr-1993 | 78.2% |
May-1993 | 78.5% |
Jun-1993 | 78.6% |
Jul-1993 | 78.6% |
Aug-1993 | 78.8% |
Sep-1993 | 78.6% |
Oct-1993 | 78.7% |
Nov-1993 | 79.0% |
Dec-1993 | 79.0% |
Jan-1994 | 78.9% |
Feb-1994 | 78.9% |
Mar-1994 | 78.9% |
Apr-1994 | 79.0% |
May-1994 | 79.2% |
Jun-1994 | 78.8% |
Jul-1994 | 79.1% |
Aug-1994 | 79.2% |
Sep-1994 | 79.6% |
Oct-1994 | 79.6% |
Nov-1994 | 79.8% |
Dec-1994 | 79.8% |
Jan-1995 | 79.7% |
Feb-1995 | 80.0% |
Mar-1995 | 79.9% |
Apr-1995 | 79.8% |
May-1995 | 79.7% |
Jun-1995 | 79.5% |
Jul-1995 | 79.7% |
Aug-1995 | 79.6% |
Sep-1995 | 79.8% |
Oct-1995 | 79.8% |
Nov-1995 | 79.7% |
Dec-1995 | 79.7% |
Jan-1996 | 79.8% |
Feb-1996 | 79.9% |
Mar-1996 | 79.9% |
Apr-1996 | 79.9% |
May-1996 | 80.0% |
Jun-1996 | 80.1% |
Jul-1996 | 80.4% |
Aug-1996 | 80.5% |
Sep-1996 | 80.4% |
Oct-1996 | 80.6% |
Nov-1996 | 80.5% |
Dec-1996 | 80.5% |
Jan-1997 | 80.5% |
Feb-1997 | 80.4% |
Mar-1997 | 80.6% |
Apr-1997 | 80.7% |
May-1997 | 80.6% |
Jun-1997 | 80.9% |
Jul-1997 | 81.1% |
Aug-1997 | 81.3% |
Sep-1997 | 81.1% |
Oct-1997 | 81.1% |
Nov-1997 | 81.0% |
Dec-1997 | 81.0% |
Jan-1998 | 81.0% |
Feb-1998 | 81.0% |
Mar-1998 | 81.0% |
Apr-1998 | 81.1% |
May-1998 | 81.0% |
Jun-1998 | 81.0% |
Jul-1998 | 81.1% |
Aug-1998 | 81.2% |
Sep-1998 | 81.3% |
Oct-1998 | 81.1% |
Nov-1998 | 81.2% |
Dec-1998 | 81.3% |
Jan-1999 | 81.8% |
Feb-1999 | 81.5% |
Mar-1999 | 81.3% |
Apr-1999 | 81.3% |
May-1999 | 81.4% |
Jun-1999 | 81.4% |
Jul-1999 | 81.2% |
Aug-1999 | 81.3% |
Sep-1999 | 81.3% |
Oct-1999 | 81.5% |
Nov-1999 | 81.6% |
Dec-1999 | 81.5% |
Jan-2000 | 81.8% |
Feb-2000 | 81.8% |
Mar-2000 | 81.7% |
Apr-2000 | 81.9% |
May-2000 | 81.5% |
Jun-2000 | 81.5% |
Jul-2000 | 81.3% |
Aug-2000 | 81.1% |
Sep-2000 | 81.1% |
Oct-2000 | 81.1% |
Nov-2000 | 81.3% |
Dec-2000 | 81.4% |
Jan-2001 | 81.4% |
Feb-2001 | 81.3% |
Mar-2001 | 81.3% |
Apr-2001 | 80.9% |
May-2001 | 80.8% |
Jun-2001 | 80.6% |
Jul-2001 | 80.5% |
Aug-2001 | 80.2% |
Sep-2001 | 80.2% |
Oct-2001 | 79.9% |
Nov-2001 | 79.7% |
Dec-2001 | 79.8% |
Jan-2002 | 79.6% |
Feb-2002 | 79.8% |
Mar-2002 | 79.6% |
Apr-2002 | 79.5% |
May-2002 | 79.4% |
Jun-2002 | 79.2% |
Jul-2002 | 79.1% |
Aug-2002 | 79.3% |
Sep-2002 | 79.4% |
Oct-2002 | 79.2% |
Nov-2002 | 78.8% |
Dec-2002 | 79.0% |
Jan-2003 | 78.9% |
Feb-2003 | 78.9% |
Mar-2003 | 79.0% |
Apr-2003 | 79.1% |
May-2003 | 78.9% |
Jun-2003 | 78.9% |
Jul-2003 | 78.8% |
Aug-2003 | 78.7% |
Sep-2003 | 78.6% |
Oct-2003 | 78.6% |
Nov-2003 | 78.7% |
Dec-2003 | 78.8% |
Jan-2004 | 78.9% |
Feb-2004 | 78.8% |
Mar-2004 | 78.7% |
Apr-2004 | 78.9% |
May-2004 | 79.0% |
Jun-2004 | 79.1% |
Jul-2004 | 79.2% |
Aug-2004 | 79.0% |
Sep-2004 | 79.0% |
Oct-2004 | 79.0% |
Nov-2004 | 79.1% |
Dec-2004 | 78.9% |
Jan-2005 | 79.2% |
Feb-2005 | 79.2% |
Mar-2005 | 79.2% |
Apr-2005 | 79.4% |
May-2005 | 79.5% |
Jun-2005 | 79.2% |
Jul-2005 | 79.4% |
Aug-2005 | 79.6% |
Sep-2005 | 79.4% |
Oct-2005 | 79.3% |
Nov-2005 | 79.2% |
Dec-2005 | 79.3% |
Jan-2006 | 79.6% |
Feb-2006 | 79.7% |
Mar-2006 | 79.8% |
Apr-2006 | 79.6% |
May-2006 | 79.7% |
Jun-2006 | 79.8% |
Jul-2006 | 79.8% |
Aug-2006 | 79.8% |
Sep-2006 | 79.9% |
Oct-2006 | 80.1% |
Nov-2006 | 80.0% |
Dec-2006 | 80.1% |
Jan-2007 | 80.3% |
Feb-2007 | 80.1% |
Mar-2007 | 80.2% |
Apr-2007 | 80.0% |
May-2007 | 80.0% |
Jun-2007 | 79.9% |
Jul-2007 | 79.8% |
Aug-2007 | 79.8% |
Sep-2007 | 79.7% |
Oct-2007 | 79.6% |
Nov-2007 | 79.7% |
Dec-2007 | 79.7% |
Jan-2008 | 80.0% |
Feb-2008 | 79.9% |
Mar-2008 | 79.8% |
Apr-2008 | 79.6% |
May-2008 | 79.5% |
Jun-2008 | 79.4% |
Jul-2008 | 79.2% |
Aug-2008 | 78.8% |
Sep-2008 | 78.8% |
Oct-2008 | 78.4% |
Nov-2008 | 78.1% |
Dec-2008 | 77.6% |
Jan-2009 | 77.0% |
Feb-2009 | 76.7% |
Mar-2009 | 76.2% |
Apr-2009 | 76.2% |
May-2009 | 75.9% |
Jun-2009 | 75.9% |
Jul-2009 | 75.8% |
Aug-2009 | 75.6% |
Sep-2009 | 75.1% |
Oct-2009 | 75.0% |
Nov-2009 | 75.2% |
Dec-2009 | 74.8% |
Jan-2010 | 75.1% |
Feb-2010 | 75.1% |
Mar-2010 | 75.1% |
Apr-2010 | 75.4% |
May-2010 | 75.1% |
Jun-2010 | 75.2% |
Jul-2010 | 75.1% |
Aug-2010 | 75.0% |
Sep-2010 | 75.1% |
Oct-2010 | 75.0% |
Nov-2010 | 74.8% |
Dec-2010 | 75.0% |
Jan-2011 | 75.2% |
Feb-2011 | 75.1% |
Mar-2011 | 75.3% |
Apr-2011 | 75.1% |
May-2011 | 75.2% |
Jun-2011 | 75.0% |
Jul-2011 | 75.0% |
Aug-2011 | 75.1% |
Sep-2011 | 74.9% |
Oct-2011 | 74.9% |
Nov-2011 | 75.3% |
Dec-2011 | 75.4% |
Jan-2012 | 75.5% |
Feb-2012 | 75.5% |
Mar-2012 | 75.7% |
Apr-2012 | 75.7% |
May-2012 | 75.7% |
Jun-2012 | 75.6% |
Jul-2012 | 75.6% |
Aug-2012 | 75.7% |
Sep-2012 | 76.0% |
Oct-2012 | 76.1% |
Nov-2012 | 75.8% |
Dec-2012 | 76.0% |
Jan-2013 | 75.6% |
Feb-2013 | 75.8% |
Mar-2013 | 75.8% |
Apr-2013 | 75.8% |
May-2013 | 76.0% |
Jun-2013 | 75.9% |
Jul-2013 | 76.0% |
Aug-2013 | 76.0% |
Sep-2013 | 76.0% |
Oct-2013 | 75.6% |
Nov-2013 | 76.1% |
Dec-2013 | 76.1% |
Jan-2014 | 76.4% |
Feb-2014 | 76.4% |
Mar-2014 | 76.5% |
Apr-2014 | 76.5% |
May-2014 | 76.4% |
Jun-2014 | 76.9% |
Jul-2014 | 76.7% |
Aug-2014 | 76.9% |
Sep-2014 | 76.8% |
Oct-2014 | 76.9% |
Nov-2014 | 76.9% |
Dec-2014 | 77.1% |
Jan-2015 | 77.1% |
Feb-2015 | 77.2% |
Mar-2015 | 77.1% |
Apr-2015 | 77.2% |
May-2015 | 77.2% |
Jun-2015 | 77.4% |
Jul-2015 | 77.1% |
Aug-2015 | 77.3% |
Sep-2015 | 77.2% |
Oct-2015 | 77.2% |
Nov-2015 | 77.4% |
Dec-2015 | 77.4% |
Jan-2016 | 77.7% |
Feb-2016 | 77.8% |
Mar-2016 | 77.9% |
Apr-2016 | 77.8% |
May-2016 | 77.9% |
Jun-2016 | 77.9% |
Jul-2016 | 78.0% |
Aug-2016 | 77.9% |
Sep-2016 | 78.0% |
Oct-2016 | 78.1% |
Nov-2016 | 78.1% |
Dec-2016 | 78.1% |
Jan-2017 | 78.2% |
Feb-2017 | 78.3% |
Mar-2017 | 78.5% |
Apr-2017 | 78.6% |
May-2017 | 78.5% |
Jun-2017 | 78.6% |
Jul-2017 | 78.8% |
Aug-2017 | 78.4% |
Sep-2017 | 79.0% |
Oct-2017 | 78.7% |
Nov-2017 | 78.9% |
Dec-2017 | 79.0% |
Jan-2018 | 78.9% |
Feb-2018 | 79.3% |
Mar-2018 | 79.2% |
Apr-2018 | 79.2% |
May-2018 | 79.3% |
Jun-2018 | 79.4% |
Jul-2018 | 79.6% |
Aug-2018 | 79.3% |
Sep-2018 | 79.4% |
Oct-2018 | 79.6% |
Nov-2018 | 79.6% |
Dec-2018 | 79.5% |
Jan-2019 | 79.8% |
Feb-2019 | 79.9% |
Mar-2019 | 79.8% |
Apr-2019 | 79.7% |
May-2019 | 79.7% |
Jun-2019 | 79.7% |
Jul-2019 | 79.6% |
Aug-2019 | 80.0% |
Sep-2019 | 80.2% |
Oct-2019 | 80.3% |
Nov-2019 | 80.3% |
Dec-2019 | 80.4% |
Jan-2020 | 80.6% |
Feb-2020 | 80.5% |
Mar-2020 | 79.5% |
Apr-2020 | 69.6% |
May-2020 | 71.4% |
Jun-2020 | 73.5% |
Jul-2020 | 73.8% |
Aug-2020 | 75.2% |
Sep-2020 | 75.1% |
Oct-2020 | 76.1% |
Nov-2020 | 76.0% |
Dec-2020 | 76.3% |
Jan-2021 | 76.4% |
Feb-2021 | 76.6% |
Mar-2021 | 76.8% |
Apr-2021 | 76.9% |
May-2021 | 77.1% |
Jun-2021 | 77.2% |
Jul-2021 | 77.8% |
Aug-2021 | 77.9% |
Sep-2021 | 78.0% |
Oct-2021 | 78.4% |
Nov-2021 | 78.9% |
Dec-2021 | 79.2% |
Jan-2022 | 79.2% |
Feb-2022 | 79.5% |
Mar-2022 | 80.0% |
Apr-2022 | 79.9% |
May-2022 | 80.0% |
Jun-2022 | 79.8% |
Jul-2022 | 79.9% |
Aug-2022 | 80.2% |
Sep-2022 | 80.2% |
Oct-2022 | 79.9% |
Nov-2022 | 79.8% |
Dec-2022 | 80.1% |
Jan-2023 | 80.3% |
Feb-2023 | 80.5% |
Mar-2023 | 80.7% |
Apr-2023 | 80.7% |
May-2023 | 80.7% |
Jun-2023 | 80.9% |
Jul-2023 | 80.9% |
Aug-2023 | 80.8% |
Sep-2023 | 80.8% |
Oct-2023 | 80.6% |
Nov-2023 | 80.7% |
Dec-2023 | 80.4% |
Jan-2024 | 80.6% |
Feb-2024 | 80.7% |
Mar-2024 | 80.7% |
Apr-2024 | 80.8% |
May-2024 | 80.8% |
Jun-2024 | 80.8% |
Jul-2024 | 80.9% |
Aug-2024 | 80.9% |
Source: EPI analysis of Bureau of Labor Statistics’ Current Population Survey public data.
Real wages are higher, especially for lower-wage workers
It’s not only that more workers have jobs. On average, wages in those jobs are up: Year-over-year wages have been rising faster than inflation for 16 months in a row as inflation has dramatically fallen from its peak in 2022.
Real (inflation-adjusted) wages are up across the wage distribution when compared with 2019, as shown in Figure B. Wage growth was strongest for lower-wage workers, increasing a whopping 16.8%. Even at the middle, workers’ real wages are 6.5% higher now than in 2019. Growth at the higher end isn’t anything to sneeze at, but the fact that it’s faster at lower parts of the wage distribution means that we’ve seen a compression in wages at least among the bottom 90% of the workforce, meaning a reduction in inequality. It’s worth noting that many more-affluent workers have also received the benefit of greater flexibility about where they work over the past four years. The value of this flexibility is likely immense—and it would not have happened without the strong labor market over this period.
Figure B also compares this strong wage growth with the slow and prolonged recovery from the Great Recession, a time when the policy response was far from adequate and the pursuit of austerity meant years more pain for workers and their families. We can see the difference in wage growth, as low- and middle-wage workers experienced a fall in purchasing power, while even high-wage workers experienced slower growth than this time around. The vast majority of workers were worse off, and inequality grew. In short, the current labor market recovery has been faster and fairer.
Wage growth is much stronger and more equal compared with the Great Recession recovery: Real wage growth across the wage distribution, 2007–2012 and 2019–2024
2007–2012 | 2019–2024 | |
---|---|---|
Low-wage | -3.9% | 16.8% |
Median | -2.7% | 6.5% |
High-wage | 2.8% | 4.9% |
Note: 2019 represents calendar year 2019 while 2024 represents the 12 months ending in August 2024.
Source: EPI analysis of the Current Population Survey Outgoing Rotation Group microdata, EPI Current Population Survey Extracts, Version 1.0.56 (2024), https://microdata.epi.org.
Strong real wage growth, particularly for historically disadvantaged groups
Figure C shows how median wage growth was strong for every demographic group between 2019 and 2024, but particularly for Black men, Hispanic women, and young workers right out of high school. Median Black worker wages grew 7.2%, with Black men experiencing growth of 7.7%. Hispanic and Black women also had especially strong wage growth of 6.6% and 6.2%, respectively. It is only in the tightest of labor markets that historically disadvantaged groups experience improvements in jobs and faster wage growth. That said, even inflation-adjusted wages of middle-wage white men grew 2.4% since 2019, increasing their standard of living.
Young workers right out of high school experienced the fastest wage growth (8.3%) of any group. These workers are often left out in weaker labor markets and also lost their jobs in great numbers when the pandemic recession hit because of the types of jobs they tend to have.
Historically disadvantaged groups have seen particularly strong wage growth: Real wage growth for select demographic groups, 2019–2024
Demographic | Real Median Wage Growth |
---|---|
Overall | 6.5% |
Black | 7.2% |
Hispanic | 4.8% |
White | 4.9% |
Black women | 6.2% |
Hispanic women | 6.6% |
White women | 3.9% |
Black men | 7.7% |
Hispanic men | 5.5% |
White men | 2.4% |
Entry level college | 4.5% |
Entry level high school | 8.3% |
Note: 2019 represents calendar year 2019 while 2024 represents the 12 months ending in August 2024. Entry level college and high school wages are averages, not median. Entry-level high school graduates are ages 17–20. Entry-level college graduates are ages 21–24.
Source: EPI analysis of the Current Population Survey Outgoing Rotation Group microdata, EPI Current Population Survey Extracts, Version 1.0.56 (2024), https://microdata.epi.org.
Slowing job growth doesn’t mean the labor market isn’t still strong
The labor market continues to add jobs, though at a slower pace. But there isn’t reason to worry at this point: As the economy continues to approach full employment, job growth will tend to slow because the pool of sidelined workers dwindles. Hiring and quitting have also come down over the last few months as workers are staying put instead of moving in and out of jobs at the pace they did two years ago. Now that the Federal Reserve has started lowering interest rates, I’m hopeful that any signs of weakness will recede, and the labor market will continue with strength.
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