As Congress Votes on Budget Proposals, It Is Also Voting on Whether It Understands the Economy
Later today and tomorrow, the House of Representatives will consider and vote on six different budget proposals—those put forth by the House leadership of both the Democratic and Republican parties, as well as by the Obama administration, the Congressional Progressive Caucus (CPC), the Congressional Black Caucus, and the Republican Study Committee.
We already know that only the Republican budget, authored by House Budget Committee Chair Paul Ryan (R-Wisc.), will pass in the House—and even then, it won’t become law—but it is still important to understand what these proposed budgets call for. While it’s true that a budget proposal is a statement of values, it is also the reflection of its supporters’ understanding of the economy.
The chart below shows the cuts and increases to various parts of the budget, as called for by the proposals made by Chairman Ryan, House Budget Committee Ranking Member Chris Van Hollen (D-Md.), and the CPC. Chairman Ryan includes deep cuts to just about every budget function, and doubles down on the unspecified sequester cuts. Rep. Van Hollen’s budget gets rid of the onerous sequestration spending cuts but otherwise primarily stays the course. Meanwhile, the CPC’s budget calls for immediate stimulus spending in order to meet its stated goal of returning the economy to full employment over the next three years.
Equal Pay Transparency
In honor of Equal Pay Day, my colleagues Heidi Shierholz and Hilary Wething suggest a number of ways to close the pay gap between men and women, including raising the minimum wage, enacting mandatory paid leave, helping workers unionize, shoring up employment law enforcement, enacting immigration reform, and passing the Paycheck Fairness Act. I would add another modest idea: requiring employers to disclose relative pay rankings so workers can tell if they are paid more or less than comparable workers. This would allow future Lilly Ledbetters to quickly find out if they are being discriminated against. Like Heidi and Hilary’s suggestions, it would also put upward pressure on the pay of all lower-paid workers rather than closing the pay gap by dragging down the wages of lower-paid men.
Employers will likely cite privacy concerns and administrative costs as reasons to oppose such a measure. But the law need not require that actual wages or salaries be disclosed, just relative rankings. In any case, Congress has already placed more onerous burdens on unions, who have to disclose employee compensation in excruciating detail. You can also look up the pay of congressional staff, White House staff, and the highest-paid nonprofit employees, among others. Since the American Enterprise Institute recently used pay disclosure to tweak the White House, maybe they can join forces with us on this effort.
In the meantime, President Obama is taking meaningful steps in the right direction, signing two executive orders today that ban federal contractors from retaliating against employees who discuss their pay and requiring them to provide the government with data on employee compensation by sex and race.
Equal Pay Day: A Reminder that Women (and Men!) Deserve More
Today is Equal Pay Day, a reminder that women and men are not always compensated at the same rate. While the widely reported statistic that women, on average, earn 77 cents to every man’s dollar has been is a great indicator that women are put in situations every day that for a variety of reasons mean they earn less, it has been criticized for not measuring individuals of similar characteristics, such as age, occupation, education, or experience. To try to get a better understanding of the gender wage gap among specific age groups, and given that many high school and college seniors are on the brink of graduating and entering the labor force, I thought it would be interesting look at the gender wage gap by age and education, to see how women and men fare as they enter today’s unsteady labor market.
The figures below show the entry-level wages of young college and high school graduates, as they appear in a presentation my colleague, Elise Gould, gave for a recent Senate Briefing on the Equal Rights Amendment (check it out! It’s a really good overview of the gender wage gap at various points in the wage distribution, and documents the gender wage gap by age and education). Both figures show the progress recent high school and college educated young women have made in closing the gender wage gap. In 1979, women with a high school degree made 74 cents to their male counterpart’s dollar, and women with a college degree made 79 cents. By 2013, the gap has narrowed for both groups: both high school and college educated entry-level working women make 84 cents to a man’s dollar.
To close the gender wage gap, women need to see real wage growth faster than their male counterparts. The best type of narrowing occurs when both women and men see real annual wage growth. It is possible for the gender wage gap to close because women see real wage increases, while men’s wages stagnate, but this isn’t the good kind of narrowing.
On the whole, college educated women have experienced the good closing of the gender wage gap. Between 1979 and 2013, both young college educated men and women wages saw real wage growth, but women’s wages grew slightly faster than their male counterparts (although neither groups experienced wage growth throughout the 2000s).
Conversely, the narrowing of the wage gap for high school graduate men and women occurred for all the wrong reasons. Both men and women saw real wage declines over the 1979-2013 period; high school men make 27.5 percent less in 2013 than they did in 1979, and high school women make 16.6 percent less. Because high school educated men fared much worse than their female counterparts, the gender wage gap narrowed.
We should be defining success in closing the gender wage gap by women catching up to men while both men and women share in overall growth. Congress has some great tools at their disposal to do this. Passing the Paycheck Fairness Act would be a great first step. In addition to prohibiting wage discrimination among women and men, the Paycheck Fairness Act incentivizes greater transparency between employers and employees, by collecting pay information data and providing information on how to reduce pay disparities for employers and labor organizations.
Similarly, President Obama’s executive orders to prohibit federal contractors from punishing employees for discussing their pay, and to require that contractors provide data on their employees’ compensation, will effectively provide greater transparency between employees and employers regarding pay rates. Greater transparency will in turn help employees advocate for equal pay, and fairly and substantively shift bargaining power towards employees to set stronger wage standards—ultimately closing the gender wage gap in a productive and fair way.
How to Make the Labor Market Work for Women
Today is Equal Pay Day, which means that policymakers, including the president, are talking about how to close the gender wage gap. In 2013, the typical female worker made $15.10 an hour, while the typical male worker made $18.11 an hour. And the gap in wages between women and men extends beyond those at the middle; it affects earners at all wage levels. High-wage women make less than high-wage men, and low-wage women make less than low-wage men.
A key backdrop to any discussion of how gender wage gaps have evolved is the fact that since the 1970s, the country has seen dramatically rising wage inequality among both men and women. Between 1979 and 2013, the median woman’s wages grew 21.7 percent, but the 95th percentile woman saw her wages grow more than three times that fast, while the 10th percentile woman saw her wages decline. Among men, high-wage workers also saw strong growth—the 95th percentile man saw his wages grow 40.1 percent over this period—but the entire bottom 60 percent of the male wage distribution saw wage losses. The forces holding back wage growth for low- and moderate-wage men—factors such as declining unionization, the erosion of other labor standards and institutions, the lack of full employment, trade agreements that eroded labor standards, and skyrocketing executive and finance professional pay that left less for everyone else—were also holding down the wage growth of low- and moderate-wage women. However, gains made by women over this period in educational attainment, work experience, and occupational upgrading (i.e., moving into higher-paying occupations) more than overcame these adverse forces (at least until the last decade, when the entire bottom 60 percent of female wage earners also saw wage losses).
How has the gender wage gap evolved over time? In short, while still large, it is smaller than it used to be. In the late 1970s, after a long period of holding fairly steady, the gap in wages between men and women began improving as women’s gains in education, work experience, and occupational upgrading, along with greater legal protections against discriminatory pay, began boosting their pay. Since the 1970s, the gender wage gap has improved at all parts of the wage distribution, meaning that low-wage, middle-wage, and high-wage women all saw stronger wage growth over this period their male counterparts.
Third Way’s Surprising Retirement Proposal
After getting into hot water for criticizing Sen. Elizabeth Warren for wanting to expand Social Security, self-styled centrist Democrats Jonathan Cowan and Jim Kessler of Third Way are testing the retirement waters again by proposing, in a New York Times op-ed, to expand savings in IRAs.
This by itself would not be blog-worthy, since every Wall Street-friendly policy wonk wants workers to put more money into IRAs. What surprised me, though, was that they propose requiring employers to contribute 50 cents per hour in these accounts. This amounts to $1,000 per year for full-time workers, and, unlike many proposals, could actually make a difference to workers’ retirement security if savings aren’t siphoned off with high fees. Cowan and Kessler’s default investment would be a low-fee lifecycle fund overseen by a Thrift Savings Plan-like board. Though TSP’s lifecycle funds, which are composed of index funds, are too aggressive—the share invested in stocks ranges from 86% to 52% during the accumulation phase—at least they’re not obvious rip-offs like many 401(k) and IRA investment options.
Cowan and Kessler take pains to assure readers that their proposal has nothing in common with President George W. Bush’s plan to privatize Social Security. But it’s not clear whether they have renounced their previous support for Social Security cuts. If not, they don’t explain why we should shrink a well-functioning social insurance system in order to expand an individual savings system that leaves families financially exposed when breadwinners die or are disabled, financial markets tank, or inflation rises. Under the Third Way plan, retirees could also outlive their savings if they opt out of the default annuity. In the end, back-door privatization may not be that much better than a frontal assault.
Larry Summers, Jeremy Stein, and the Better Off Budget
Larry Summers gave a talk earlier this week at the launch of the Full Employment project headed by Jared Bernstein of the Center on Budget and Policy Priorities (CBPP). In a reasonable, evidence-based world, his talk—and the paper he co-authored with Larry Ball and Brad DeLong for the event—would be deeply influential to policymakers.
The best summation of it is the first paragraph of the accompanying paper:
“At present and going forward, activist fiscal policy is likely to be essential for the American economy to operate near potential levels of output and employment. This conclusion is a substantial change in view from the near-consensus of economists that monetary policy alone could and should be left to carry out the stabilization policy mission, a view that prevailed for nearly a generation prior to the 2008 financial crisis”
Basically, what Summers et al. are saying is that the Federal Reserve won’t be able to engineer a full recovery from the Great Recession (a recovery that remains far from complete) with the monetary policy tools that they have at their disposal. And unless fiscal policy changes sharply from its current contractionary stance to one that supports growth and jobs, the U.S. economy could throw away years of potential income growth (totaling trillions of dollars) and consign millions of workers and families to years of completely needless economic misery.
Besides arguing that the Fed alone couldn’t generate a full recovery with the tools at its disposal, Summers also echoed a point made recently by Jeremy Stein, a member of the Fed’s Board of Governors: that these tools currently being used by the Fed to try to generate recovery—keeping interest rates extraordinarily low for an extended period of time—carry the danger of spurring financial market bubbles that would sow the seeds for the next economic downturn.
The State of Black and Brown America
This week, the Urban League released the 38th edition of its annual State of Black America report, with the theme One Nation Underemployed: Jobs Rebuild America. With an emphasis on growing economic inequality, the report features the 10th installment of the Urban League’s Black-White Equality Index, and the 5th installment of the Hispanic-White Equality Index. At the national level, these numbers tell an all too familiar story of racial economic inequality in America that persists through the ups and downs of the business cycle.
Though the recession briefly narrowed the black-white unemployment rate gap to a ratio of 1.7-to-1 in 2009, the black unemployment rate is again double the rate for whites, while the Hispanic unemployment rate has remained between 1.4 and 1.5 times higher than whites since 2007. The widening disparity between low, middle, and high incomes—i.e. increasing overall inequality—has also expanded racial income gaps, since African American and Latino households are more likely to have incomes below the national median. According to the report, black median household income is about 60 percent of that of whites (down from 62 percent before the recession) and Hispanic median household income is 71 percent of that of white households (down from 74 percent before the recession).
With the addition of a metro-level analysis of unemployment and income inequality in State of Black America 2014, a slightly more nuanced picture of racial and ethnic inequality in America emerges. Based on data from the 1-year sample of the 2012 American Community Survey, the report suggests that the state of black and brown America depends on what part of America you live in—although at least for African Americans, it’s really not all that great anywhere. According to the report’s listing of metro area unemployment rates, the black unemployment rate ranged from a low of 9.0 percent in Oklahoma City, Okla. (the only metro area with a black unemployment rate under 10 percent) to a high of 24.5 percent in Sacramento, Calif. When it comes to the income gap, at best, the median black household income has 78 cents for every dollar of white income in the Riverside, Calif. metro area.
March Jobs Report Shows Labor Market Still Requires Federal Jobless Aid
Job opportunities have been so weak for so long that jobless workers have gotten stuck in unemployment for unprecedented lengths of time. Currently more than one-third of unemployed workers (35.8 percent) have been unemployed for more than six months—which, as the figure below shows, is far higher than at any other point on record outside of the last five years. It is important to note that the cause of today’s long-term unemployment crisis is no mystery: it is entirely explained by the length and severity of the current period of labor market weakness, along with long-term trends in long-term unemployment. In other words, the long-term unemployment crisis is exactly what we would expect given how long our labor market has been as weak as it has been. It is not the fault of individual unemployed workers failing to exert enough effort or flexibility in their job search.
Nevertheless, Congress allowed federal unemployment insurance to expire in at the end of 2013. In the first sign of progress in months, the Senate is expected to approve a temporary extension of federal unemployment insurance next week. It would be retroactive to January 1st and would extend federal jobless aid through May 31st, but is expected to face an uphill battle in the House.
The share of the unemployed who have been jobless for six months or more, 1948–2014
| Date | Share of the unemployed |
|---|---|
| 1948-01-01 | 6.4% |
| 1948-02-01 | 5.2% |
| 1948-03-01 | 4.6% |
| 1948-04-01 | 4.4% |
| 1948-05-01 | 5.1% |
| 1948-06-01 | 5.3% |
| 1948-07-01 | 4.9% |
| 1948-08-01 | 5.3% |
| 1948-09-01 | 5.5% |
| 1948-10-01 | 6.2% |
| 1948-11-01 | 4.3% |
| 1948-12-01 | 4.1% |
| 1949-01-01 | 4.1% |
| 1949-02-01 | 4.5% |
| 1949-03-01 | 3.8% |
| 1949-04-01 | 4.8% |
| 1949-05-01 | 5.1% |
| 1949-06-01 | 6.5% |
| 1949-07-01 | 7.5% |
| 1949-08-01 | 8.0% |
| 1949-09-01 | 8.6% |
| 1949-10-01 | 7.8% |
| 1949-11-01 | 10.6% |
| 1949-12-01 | 10.0% |
| 1950-01-01 | 10.0% |
| 1950-02-01 | 10.5% |
| 1950-03-01 | 11.3% |
| 1950-04-01 | 13.4% |
| 1950-05-01 | 12.3% |
| 1950-06-01 | 12.3% |
| 1950-07-01 | 10.8% |
| 1950-08-01 | 10.5% |
| 1950-09-01 | 10.6% |
| 1950-10-01 | 10.9% |
| 1950-11-01 | 9.9% |
| 1950-12-01 | 8.1% |
| 1951-01-01 | 8.0% |
| 1951-02-01 | 9.4% |
| 1951-03-01 | 7.2% |
| 1951-04-01 | 7.2% |
| 1951-05-01 | 6.9% |
| 1951-06-01 | 5.6% |
| 1951-07-01 | 6.6% |
| 1951-08-01 | 6.0% |
| 1951-09-01 | 5.7% |
| 1951-10-01 | 4.6% |
| 1951-11-01 | 7.1% |
| 1951-12-01 | 5.2% |
| 1952-01-01 | 5.5% |
| 1952-02-01 | 4.5% |
| 1952-03-01 | 4.7% |
| 1952-04-01 | 6.3% |
| 1952-05-01 | 4.3% |
| 1952-06-01 | 3.6% |
| 1952-07-01 | 3.4% |
| 1952-08-01 | 3.0% |
| 1952-09-01 | 3.3% |
| 1952-10-01 | 4.8% |
| 1952-11-01 | 3.9% |
| 1952-12-01 | 6.2% |
| 1953-01-01 | 4.8% |
| 1953-02-01 | 4.8% |
| 1953-03-01 | 5.0% |
| 1953-04-01 | 3.9% |
| 1953-05-01 | 2.9% |
| 1953-06-01 | 5.8% |
| 1953-07-01 | 4.4% |
| 1953-08-01 | 4.0% |
| 1953-09-01 | 3.8% |
| 1953-10-01 | 3.4% |
| 1953-11-01 | 4.5% |
| 1953-12-01 | 4.0% |
| 1954-01-01 | 4.9% |
| 1954-02-01 | 4.6% |
| 1954-03-01 | 6.5% |
| 1954-04-01 | 7.6% |
| 1954-05-01 | 8.5% |
| 1954-06-01 | 8.8% |
| 1954-07-01 | 9.1% |
| 1954-08-01 | 11.0% |
| 1954-09-01 | 10.6% |
| 1954-10-01 | 12.3% |
| 1954-11-01 | 12.3% |
| 1954-12-01 | 12.1% |
| 1955-01-01 | 13.3% |
| 1955-02-01 | 14.7% |
| 1955-03-01 | 13.4% |
| 1955-04-01 | 13.5% |
| 1955-05-01 | 13.1% |
| 1955-06-01 | 12.2% |
| 1955-07-01 | 11.4% |
| 1955-08-01 | 9.9% |
| 1955-09-01 | 9.2% |
| 1955-10-01 | 8.6% |
| 1955-11-01 | 9.9% |
| 1955-12-01 | 10.4% |
| 1956-01-01 | 9.6% |
| 1956-02-01 | 10.6% |
| 1956-03-01 | 8.6% |
| 1956-04-01 | 7.7% |
| 1956-05-01 | 6.9% |
| 1956-06-01 | 6.2% |
| 1956-07-01 | 7.1% |
| 1956-08-01 | 8.7% |
| 1956-09-01 | 9.1% |
| 1956-10-01 | 9.5% |
| 1956-11-01 | 8.4% |
| 1956-12-01 | 9.2% |
| 1957-01-01 | 6.5% |
| 1957-02-01 | 8.6% |
| 1957-03-01 | 8.6% |
| 1957-04-01 | 9.0% |
| 1957-05-01 | 8.7% |
| 1957-06-01 | 8.9% |
| 1957-07-01 | 9.2% |
| 1957-08-01 | 8.4% |
| 1957-09-01 | 7.4% |
| 1957-10-01 | 9.6% |
| 1957-11-01 | 8.2% |
| 1957-12-01 | 7.4% |
| 1958-01-01 | 7.7% |
| 1958-02-01 | 8.1% |
| 1958-03-01 | 7.7% |
| 1958-04-01 | 10.5% |
| 1958-05-01 | 11.6% |
| 1958-06-01 | 14.2% |
| 1958-07-01 | 16.6% |
| 1958-08-01 | 19.0% |
| 1958-09-01 | 20.7% |
| 1958-10-01 | 20.3% |
| 1958-11-01 | 19.5% |
| 1958-12-01 | 19.2% |
| 1959-01-01 | 19.4% |
| 1959-02-01 | 18.3% |
| 1959-03-01 | 18.1% |
| 1959-04-01 | 18.2% |
| 1959-05-01 | 16.7% |
| 1959-06-01 | 15.9% |
| 1959-07-01 | 14.0% |
| 1959-08-01 | 13.4% |
| 1959-09-01 | 11.8% |
| 1959-10-01 | 11.4% |
| 1959-11-01 | 12.1% |
| 1959-12-01 | 12.6% |
| 1960-01-01 | 12.9% |
| 1960-02-01 | 13.0% |
| 1960-03-01 | 11.7% |
| 1960-04-01 | 11.9% |
| 1960-05-01 | 10.8% |
| 1960-06-01 | 10.5% |
| 1960-07-01 | 10.5% |
| 1960-08-01 | 10.4% |
| 1960-09-01 | 12.0% |
| 1960-10-01 | 13.4% |
| 1960-11-01 | 12.8% |
| 1960-12-01 | 11.8% |
| 1961-01-01 | 13.6% |
| 1961-02-01 | 13.7% |
| 1961-03-01 | 14.5% |
| 1961-04-01 | 16.9% |
| 1961-05-01 | 17.7% |
| 1961-06-01 | 18.9% |
| 1961-07-01 | 19.9% |
| 1961-08-01 | 19.0% |
| 1961-09-01 | 18.0% |
| 1961-10-01 | 17.9% |
| 1961-11-01 | 17.8% |
| 1961-12-01 | 17.3% |
| 1962-01-01 | 16.5% |
| 1962-02-01 | 17.7% |
| 1962-03-01 | 16.3% |
| 1962-04-01 | 16.2% |
| 1962-05-01 | 16.5% |
| 1962-06-01 | 15.2% |
| 1962-07-01 | 14.9% |
| 1962-08-01 | 14.7% |
| 1962-09-01 | 13.1% |
| 1962-10-01 | 13.3% |
| 1962-11-01 | 11.1% |
| 1962-12-01 | 12.8% |
| 1963-01-01 | 13.3% |
| 1963-02-01 | 14.0% |
| 1963-03-01 | 14.8% |
| 1963-04-01 | 14.7% |
| 1963-05-01 | 14.4% |
| 1963-06-01 | 12.4% |
| 1963-07-01 | 13.5% |
| 1963-08-01 | 13.2% |
| 1963-09-01 | 14.0% |
| 1963-10-01 | 13.3% |
| 1963-11-01 | 12.6% |
| 1963-12-01 | 12.3% |
| 1964-01-01 | 12.5% |
| 1964-02-01 | 12.4% |
| 1964-03-01 | 12.8% |
| 1964-04-01 | 12.1% |
| 1964-05-01 | 13.4% |
| 1964-06-01 | 13.1% |
| 1964-07-01 | 14.5% |
| 1964-08-01 | 13.7% |
| 1964-09-01 | 12.4% |
| 1964-10-01 | 11.7% |
| 1964-11-01 | 12.3% |
| 1964-12-01 | 11.9% |
| 1965-01-01 | 11.1% |
| 1965-02-01 | 11.0% |
| 1965-03-01 | 10.2% |
| 1965-04-01 | 10.3% |
| 1965-05-01 | 10.2% |
| 1965-06-01 | 10.7% |
| 1965-07-01 | 9.8% |
| 1965-08-01 | 10.0% |
| 1965-09-01 | 11.1% |
| 1965-10-01 | 10.8% |
| 1965-11-01 | 10.1% |
| 1965-12-01 | 9.9% |
| 1966-01-01 | 9.9% |
| 1966-02-01 | 9.5% |
| 1966-03-01 | 9.2% |
| 1966-04-01 | 9.0% |
| 1966-05-01 | 9.5% |
| 1966-06-01 | 7.9% |
| 1966-07-01 | 7.3% |
| 1966-08-01 | 7.0% |
| 1966-09-01 | 7.1% |
| 1966-10-01 | 7.9% |
| 1966-11-01 | 7.3% |
| 1966-12-01 | 7.5% |
| 1967-01-01 | 6.9% |
| 1967-02-01 | 6.9% |
| 1967-03-01 | 6.2% |
| 1967-04-01 | 6.1% |
| 1967-05-01 | 5.3% |
| 1967-06-01 | 5.0% |
| 1967-07-01 | 5.2% |
| 1967-08-01 | 6.7% |
| 1967-09-01 | 5.4% |
| 1967-10-01 | 5.6% |
| 1967-11-01 | 5.9% |
| 1967-12-01 | 6.5% |
| 1968-01-01 | 6.6% |
| 1968-02-01 | 5.9% |
| 1968-03-01 | 6.2% |
| 1968-04-01 | 5.5% |
| 1968-05-01 | 5.0% |
| 1968-06-01 | 5.4% |
| 1968-07-01 | 5.5% |
| 1968-08-01 | 5.5% |
| 1968-09-01 | 4.9% |
| 1968-10-01 | 5.0% |
| 1968-11-01 | 4.8% |
| 1968-12-01 | 6.0% |
| 1969-01-01 | 4.9% |
| 1969-02-01 | 4.3% |
| 1969-03-01 | 4.4% |
| 1969-04-01 | 4.8% |
| 1969-05-01 | 4.7% |
| 1969-06-01 | 4.4% |
| 1969-07-01 | 5.6% |
| 1969-08-01 | 4.6% |
| 1969-09-01 | 4.9% |
| 1969-10-01 | 4.5% |
| 1969-11-01 | 5.1% |
| 1969-12-01 | 4.6% |
| 1970-01-01 | 4.5% |
| 1970-02-01 | 4.6% |
| 1970-03-01 | 5.0% |
| 1970-04-01 | 5.3% |
| 1970-05-01 | 5.9% |
| 1970-06-01 | 5.5% |
| 1970-07-01 | 5.7% |
| 1970-08-01 | 5.9% |
| 1970-09-01 | 6.3% |
| 1970-10-01 | 5.6% |
| 1970-11-01 | 6.7% |
| 1970-12-01 | 7.6% |
| 1971-01-01 | 8.5% |
| 1971-02-01 | 9.2% |
| 1971-03-01 | 9.3% |
| 1971-04-01 | 9.2% |
| 1971-05-01 | 10.2% |
| 1971-06-01 | 10.9% |
| 1971-07-01 | 11.3% |
| 1971-08-01 | 10.6% |
| 1971-09-01 | 11.0% |
| 1971-10-01 | 11.7% |
| 1971-11-01 | 11.2% |
| 1971-12-01 | 11.4% |
| 1972-01-01 | 11.7% |
| 1972-02-01 | 13.4% |
| 1972-03-01 | 12.8% |
| 1972-04-01 | 13.6% |
| 1972-05-01 | 11.9% |
| 1972-06-01 | 11.2% |
| 1972-07-01 | 10.6% |
| 1972-08-01 | 10.8% |
| 1972-09-01 | 11.2% |
| 1972-10-01 | 10.6% |
| 1972-11-01 | 10.2% |
| 1972-12-01 | 10.2% |
| 1973-01-01 | 9.5% |
| 1973-02-01 | 8.4% |
| 1973-03-01 | 8.9% |
| 1973-04-01 | 7.5% |
| 1973-05-01 | 8.0% |
| 1973-06-01 | 7.5% |
| 1973-07-01 | 6.5% |
| 1973-08-01 | 7.7% |
| 1973-09-01 | 6.8% |
| 1973-10-01 | 8.0% |
| 1973-11-01 | 8.0% |
| 1973-12-01 | 7.4% |
| 1974-01-01 | 7.2% |
| 1974-02-01 | 7.1% |
| 1974-03-01 | 7.1% |
| 1974-04-01 | 7.6% |
| 1974-05-01 | 7.5% |
| 1974-06-01 | 7.4% |
| 1974-07-01 | 7.7% |
| 1974-08-01 | 7.7% |
| 1974-09-01 | 7.2% |
| 1974-10-01 | 7.2% |
| 1974-11-01 | 7.1% |
| 1974-12-01 | 8.1% |
| 1975-01-01 | 8.3% |
| 1975-02-01 | 9.7% |
| 1975-03-01 | 9.7% |
| 1975-04-01 | 11.9% |
| 1975-05-01 | 13.0% |
| 1975-06-01 | 15.8% |
| 1975-07-01 | 17.3% |
| 1975-08-01 | 18.3% |
| 1975-09-01 | 19.6% |
| 1975-10-01 | 18.0% |
| 1975-11-01 | 21.0% |
| 1975-12-01 | 20.3% |
| 1976-01-01 | 20.8% |
| 1976-02-01 | 21.0% |
| 1976-03-01 | 20.7% |
| 1976-04-01 | 19.7% |
| 1976-05-01 | 17.5% |
| 1976-06-01 | 18.3% |
| 1976-07-01 | 16.8% |
| 1976-08-01 | 16.9% |
| 1976-09-01 | 16.0% |
| 1976-10-01 | 16.4% |
| 1976-11-01 | 16.8% |
| 1976-12-01 | 17.6% |
| 1977-01-01 | 16.6% |
| 1977-02-01 | 16.2% |
| 1977-03-01 | 16.0% |
| 1977-04-01 | 16.1% |
| 1977-05-01 | 15.6% |
| 1977-06-01 | 14.4% |
| 1977-07-01 | 14.3% |
| 1977-08-01 | 12.9% |
| 1977-09-01 | 13.7% |
| 1977-10-01 | 13.4% |
| 1977-11-01 | 13.2% |
| 1977-12-01 | 13.4% |
| 1978-01-01 | 12.6% |
| 1978-02-01 | 10.6% |
| 1978-03-01 | 11.2% |
| 1978-04-01 | 11.1% |
| 1978-05-01 | 11.3% |
| 1978-06-01 | 10.5% |
| 1978-07-01 | 10.4% |
| 1978-08-01 | 10.1% |
| 1978-09-01 | 10.2% |
| 1978-10-01 | 10.0% |
| 1978-11-01 | 8.8% |
| 1978-12-01 | 8.2% |
| 1979-01-01 | 8.8% |
| 1979-02-01 | 9.0% |
| 1979-03-01 | 9.6% |
| 1979-04-01 | 9.0% |
| 1979-05-01 | 8.8% |
| 1979-06-01 | 8.8% |
| 1979-07-01 | 7.8% |
| 1979-08-01 | 8.5% |
| 1979-09-01 | 8.6% |
| 1979-10-01 | 8.5% |
| 1979-11-01 | 9.0% |
| 1979-12-01 | 8.6% |
| 1980-01-01 | 8.3% |
| 1980-02-01 | 7.6% |
| 1980-03-01 | 9.1% |
| 1980-04-01 | 9.3% |
| 1980-05-01 | 8.9% |
| 1980-06-01 | 9.6% |
| 1980-07-01 | 10.7% |
| 1980-08-01 | 11.3% |
| 1980-09-01 | 12.0% |
| 1980-10-01 | 13.1% |
| 1980-11-01 | 14.2% |
| 1980-12-01 | 14.8% |
| 1981-01-01 | 15.7% |
| 1981-02-01 | 15.5% |
| 1981-03-01 | 15.2% |
| 1981-04-01 | 14.4% |
| 1981-05-01 | 14.0% |
| 1981-06-01 | 14.0% |
| 1981-07-01 | 13.8% |
| 1981-08-01 | 14.5% |
| 1981-09-01 | 13.5% |
| 1981-10-01 | 13.2% |
| 1981-11-01 | 12.7% |
| 1981-12-01 | 12.6% |
| 1982-01-01 | 12.6% |
| 1982-02-01 | 13.2% |
| 1982-03-01 | 13.6% |
| 1982-04-01 | 14.6% |
| 1982-05-01 | 15.5% |
| 1982-06-01 | 17.0% |
| 1982-07-01 | 16.8% |
| 1982-08-01 | 17.0% |
| 1982-09-01 | 17.8% |
| 1982-10-01 | 19.5% |
| 1982-11-01 | 19.5% |
| 1982-12-01 | 21.3% |
| 1983-01-01 | 22.9% |
| 1983-02-01 | 23.5% |
| 1983-03-01 | 24.4% |
| 1983-04-01 | 24.6% |
| 1983-05-01 | 24.9% |
| 1983-06-01 | 26.0% |
| 1983-07-01 | 24.5% |
| 1983-08-01 | 23.6% |
| 1983-09-01 | 23.5% |
| 1983-10-01 | 23.1% |
| 1983-11-01 | 22.7% |
| 1983-12-01 | 22.0% |
| 1984-01-01 | 22.4% |
| 1984-02-01 | 20.8% |
| 1984-03-01 | 20.4% |
| 1984-04-01 | 20.3% |
| 1984-05-01 | 20.0% |
| 1984-06-01 | 19.3% |
| 1984-07-01 | 18.7% |
| 1984-08-01 | 17.6% |
| 1984-09-01 | 17.2% |
| 1984-10-01 | 17.1% |
| 1984-11-01 | 17.4% |
| 1984-12-01 | 16.7% |
| 1985-01-01 | 15.5% |
| 1985-02-01 | 16.2% |
| 1985-03-01 | 16.1% |
| 1985-04-01 | 16.4% |
| 1985-05-01 | 14.8% |
| 1985-06-01 | 15.3% |
| 1985-07-01 | 15.0% |
| 1985-08-01 | 14.9% |
| 1985-09-01 | 14.8% |
| 1985-10-01 | 14.5% |
| 1985-11-01 | 16.0% |
| 1985-12-01 | 14.8% |
| 1986-01-01 | 13.9% |
| 1986-02-01 | 14.1% |
| 1986-03-01 | 14.0% |
| 1986-04-01 | 13.9% |
| 1986-05-01 | 13.8% |
| 1986-06-01 | 15.0% |
| 1986-07-01 | 14.7% |
| 1986-08-01 | 14.7% |
| 1986-09-01 | 14.8% |
| 1986-10-01 | 14.8% |
| 1986-11-01 | 14.3% |
| 1986-12-01 | 14.6% |
| 1987-01-01 | 14.3% |
| 1987-02-01 | 14.2% |
| 1987-03-01 | 14.3% |
| 1987-04-01 | 14.4% |
| 1987-05-01 | 14.8% |
| 1987-06-01 | 14.5% |
| 1987-07-01 | 13.5% |
| 1987-08-01 | 14.5% |
| 1987-09-01 | 13.9% |
| 1987-10-01 | 13.3% |
| 1987-11-01 | 13.1% |
| 1987-12-01 | 13.0% |
| 1988-01-01 | 12.5% |
| 1988-02-01 | 12.9% |
| 1988-03-01 | 12.3% |
| 1988-04-01 | 12.3% |
| 1988-05-01 | 12.5% |
| 1988-06-01 | 12.3% |
| 1988-07-01 | 11.9% |
| 1988-08-01 | 11.7% |
| 1988-09-01 | 12.3% |
| 1988-10-01 | 11.8% |
| 1988-11-01 | 10.8% |
| 1988-12-01 | 11.4% |
| 1989-01-01 | 11.0% |
| 1989-02-01 | 10.0% |
| 1989-03-01 | 10.7% |
| 1989-04-01 | 11.0% |
| 1989-05-01 | 9.9% |
| 1989-06-01 | 9.3% |
| 1989-07-01 | 9.5% |
| 1989-08-01 | 8.7% |
| 1989-09-01 | 9.1% |
| 1989-10-01 | 9.8% |
| 1989-11-01 | 9.8% |
| 1989-12-01 | 9.6% |
| 1990-01-01 | 9.7% |
| 1990-02-01 | 9.4% |
| 1990-03-01 | 9.6% |
| 1990-04-01 | 9.5% |
| 1990-05-01 | 9.5% |
| 1990-06-01 | 9.5% |
| 1990-07-01 | 9.8% |
| 1990-08-01 | 10.2% |
| 1990-09-01 | 10.6% |
| 1990-10-01 | 10.4% |
| 1990-11-01 | 10.8% |
| 1990-12-01 | 10.6% |
| 1991-01-01 | 10.9% |
| 1991-02-01 | 10.9% |
| 1991-03-01 | 11.1% |
| 1991-04-01 | 11.6% |
| 1991-05-01 | 11.9% |
| 1991-06-01 | 12.6% |
| 1991-07-01 | 12.9% |
| 1991-08-01 | 13.5% |
| 1991-09-01 | 13.7% |
| 1991-10-01 | 13.9% |
| 1991-11-01 | 15.4% |
| 1991-12-01 | 16.4% |
| 1992-01-01 | 17.5% |
| 1992-02-01 | 18.1% |
| 1992-03-01 | 18.8% |
| 1992-04-01 | 18.9% |
| 1992-05-01 | 20.6% |
| 1992-06-01 | 21.3% |
| 1992-07-01 | 21.5% |
| 1992-08-01 | 21.0% |
| 1992-09-01 | 21.5% |
| 1992-10-01 | 23.1% |
| 1992-11-01 | 20.7% |
| 1992-12-01 | 21.4% |
| 1993-01-01 | 21.2% |
| 1993-02-01 | 20.7% |
| 1993-03-01 | 20.0% |
| 1993-04-01 | 18.2% |
| 1993-05-01 | 19.6% |
| 1993-06-01 | 19.5% |
| 1993-07-01 | 19.8% |
| 1993-08-01 | 20.1% |
| 1993-09-01 | 20.2% |
| 1993-10-01 | 20.4% |
| 1993-11-01 | 21.0% |
| 1993-12-01 | 20.8% |
| 1994-01-01 | 20.1% |
| 1994-02-01 | 20.7% |
| 1994-03-01 | 21.2% |
| 1994-04-01 | 21.3% |
| 1994-05-01 | 21.3% |
| 1994-06-01 | 19.9% |
| 1994-07-01 | 19.6% |
| 1994-08-01 | 19.6% |
| 1994-09-01 | 20.0% |
| 1994-10-01 | 20.8% |
| 1994-11-01 | 19.7% |
| 1994-12-01 | 18.9% |
| 1995-01-01 | 18.3% |
| 1995-02-01 | 17.2% |
| 1995-03-01 | 18.8% |
| 1995-04-01 | 18.7% |
| 1995-05-01 | 17.5% |
| 1995-06-01 | 16.8% |
| 1995-07-01 | 16.7% |
| 1995-08-01 | 16.3% |
| 1995-09-01 | 16.9% |
| 1995-10-01 | 16.5% |
| 1995-11-01 | 16.7% |
| 1995-12-01 | 16.4% |
| 1996-01-01 | 16.2% |
| 1996-02-01 | 16.5% |
| 1996-03-01 | 18.2% |
| 1996-04-01 | 18.3% |
| 1996-05-01 | 18.1% |
| 1996-06-01 | 19.4% |
| 1996-07-01 | 18.3% |
| 1996-08-01 | 18.2% |
| 1996-09-01 | 17.4% |
| 1996-10-01 | 16.7% |
| 1996-11-01 | 15.7% |
| 1996-12-01 | 16.1% |
| 1997-01-01 | 16.1% |
| 1997-02-01 | 15.7% |
| 1997-03-01 | 15.6% |
| 1997-04-01 | 16.2% |
| 1997-05-01 | 15.7% |
| 1997-06-01 | 15.8% |
| 1997-07-01 | 16.3% |
| 1997-08-01 | 16.2% |
| 1997-09-01 | 16.2% |
| 1997-10-01 | 16.0% |
| 1997-11-01 | 14.8% |
| 1997-12-01 | 15.4% |
| 1998-01-01 | 15.7% |
| 1998-02-01 | 15.2% |
| 1998-03-01 | 14.1% |
| 1998-04-01 | 14.7% |
| 1998-05-01 | 13.8% |
| 1998-06-01 | 12.6% |
| 1998-07-01 | 13.3% |
| 1998-08-01 | 13.2% |
| 1998-09-01 | 14.5% |
| 1998-10-01 | 13.6% |
| 1998-11-01 | 14.4% |
| 1998-12-01 | 13.5% |
| 1999-01-01 | 12.0% |
| 1999-02-01 | 13.2% |
| 1999-03-01 | 12.2% |
| 1999-04-01 | 11.4% |
| 1999-05-01 | 12.4% |
| 1999-06-01 | 13.7% |
| 1999-07-01 | 12.3% |
| 1999-08-01 | 12.1% |
| 1999-09-01 | 12.0% |
| 1999-10-01 | 12.4% |
| 1999-11-01 | 11.9% |
| 1999-12-01 | 12.1% |
| 2000-01-01 | 12.7% |
| 2000-02-01 | 10.8% |
| 2000-03-01 | 11.0% |
| 2000-04-01 | 10.7% |
| 2000-05-01 | 11.1% |
| 2000-06-01 | 11.2% |
| 2000-07-01 | 12.3% |
| 2000-08-01 | 12.2% |
| 2000-09-01 | 11.5% |
| 2000-10-01 | 11.3% |
| 2000-11-01 | 10.6% |
| 2000-12-01 | 11.4% |
| 2001-01-01 | 11.3% |
| 2001-02-01 | 11.7% |
| 2001-03-01 | 11.1% |
| 2001-04-01 | 11.0% |
| 2001-05-01 | 10.0% |
| 2001-06-01 | 11.2% |
| 2001-07-01 | 10.8% |
| 2001-08-01 | 12.2% |
| 2001-09-01 | 11.5% |
| 2001-10-01 | 11.8% |
| 2001-11-01 | 13.9% |
| 2001-12-01 | 13.6% |
| 2002-01-01 | 14.6% |
| 2002-02-01 | 14.9% |
| 2002-03-01 | 15.9% |
| 2002-04-01 | 16.8% |
| 2002-05-01 | 18.8% |
| 2002-06-01 | 19.6% |
| 2002-07-01 | 19.0% |
| 2002-08-01 | 18.9% |
| 2002-09-01 | 19.1% |
| 2002-10-01 | 19.9% |
| 2002-11-01 | 20.5% |
| 2002-12-01 | 22.1% |
| 2003-01-01 | 20.5% |
| 2003-02-01 | 21.8% |
| 2003-03-01 | 21.0% |
| 2003-04-01 | 21.9% |
| 2003-05-01 | 21.6% |
| 2003-06-01 | 22.8% |
| 2003-07-01 | 22.0% |
| 2003-08-01 | 22.2% |
| 2003-09-01 | 22.5% |
| 2003-10-01 | 22.4% |
| 2003-11-01 | 23.4% |
| 2003-12-01 | 23.1% |
| 2004-01-01 | 22.7% |
| 2004-02-01 | 22.9% |
| 2004-03-01 | 23.6% |
| 2004-04-01 | 22.1% |
| 2004-05-01 | 21.9% |
| 2004-06-01 | 22.5% |
| 2004-07-01 | 20.7% |
| 2004-08-01 | 20.3% |
| 2004-09-01 | 21.4% |
| 2004-10-01 | 21.5% |
| 2004-11-01 | 21.4% |
| 2004-12-01 | 20.8% |
| 2005-01-01 | 21.2% |
| 2005-02-01 | 20.4% |
| 2005-03-01 | 21.8% |
| 2005-04-01 | 21.0% |
| 2005-05-01 | 20.1% |
| 2005-06-01 | 18.5% |
| 2005-07-01 | 18.7% |
| 2005-08-01 | 18.9% |
| 2005-09-01 | 18.9% |
| 2005-10-01 | 18.9% |
| 2005-11-01 | 18.0% |
| 2005-12-01 | 18.7% |
| 2006-01-01 | 16.7% |
| 2006-02-01 | 18.7% |
| 2006-03-01 | 18.6% |
| 2006-04-01 | 18.6% |
| 2006-05-01 | 18.9% |
| 2006-06-01 | 16.6% |
| 2006-07-01 | 18.3% |
| 2006-08-01 | 18.3% |
| 2006-09-01 | 18.1% |
| 2006-10-01 | 15.9% |
| 2006-11-01 | 16.4% |
| 2006-12-01 | 16.2% |
| 2007-01-01 | 16.3% |
| 2007-02-01 | 18.0% |
| 2007-03-01 | 18.6% |
| 2007-04-01 | 17.4% |
| 2007-05-01 | 16.5% |
| 2007-06-01 | 16.4% |
| 2007-07-01 | 18.3% |
| 2007-08-01 | 17.5% |
| 2007-09-01 | 17.5% |
| 2007-10-01 | 17.7% |
| 2007-11-01 | 18.9% |
| 2007-12-01 | 17.4% |
| 2008-01-01 | 18.5% |
| 2008-02-01 | 17.8% |
| 2008-03-01 | 16.9% |
| 2008-04-01 | 17.7% |
| 2008-05-01 | 18.3% |
| 2008-06-01 | 18.2% |
| 2008-07-01 | 18.9% |
| 2008-08-01 | 19.8% |
| 2008-09-01 | 21.3% |
| 2008-10-01 | 22.3% |
| 2008-11-01 | 21.1% |
| 2008-12-01 | 23.1% |
| 2009-01-01 | 22.6% |
| 2009-02-01 | 23.4% |
| 2009-03-01 | 24.2% |
| 2009-04-01 | 27.1% |
| 2009-05-01 | 27.0% |
| 2009-06-01 | 29.0% |
| 2009-07-01 | 34.0% |
| 2009-08-01 | 34.3% |
| 2009-09-01 | 36.6% |
| 2009-10-01 | 36.6% |
| 2009-11-01 | 39.3% |
| 2009-12-01 | 40.4% |
| 2010-01-01 | 41.6% |
| 2010-02-01 | 40.8% |
| 2010-03-01 | 43.4% |
| 2010-04-01 | 45.3% |
| 2010-05-01 | 44.9% |
| 2010-06-01 | 44.8% |
| 2010-07-01 | 44.7% |
| 2010-08-01 | 42.6% |
| 2010-09-01 | 42.2% |
| 2010-10-01 | 42.6% |
| 2010-11-01 | 42.3% |
| 2010-12-01 | 44.7% |
| 2011-01-01 | 44.0% |
| 2011-02-01 | 43.3% |
| 2011-03-01 | 44.9% |
| 2011-04-01 | 42.9% |
| 2011-05-01 | 44.7% |
| 2011-06-01 | 44.3% |
| 2011-07-01 | 44.6% |
| 2011-08-01 | 43.2% |
| 2011-09-01 | 45.0% |
| 2011-10-01 | 42.7% |
| 2011-11-01 | 43.1% |
| 2011-12-01 | 42.9% |
| 2012-01-01 | 43.1% |
| 2012-02-01 | 41.8% |
| 2012-03-01 | 41.6% |
| 2012-04-01 | 40.8% |
| 2012-05-01 | 42.6% |
| 2012-06-01 | 41.9% |
| 2012-07-01 | 40.7% |
| 2012-08-01 | 40.0% |
| 2012-09-01 | 40.4% |
| 2012-10-01 | 40.9% |
| 2012-11-01 | 39.8% |
| 2012-12-01 | 39.1% |
| 2013-01-01 | 37.9% |
| 2013-02-01 | 39.7% |
| 2013-03-01 | 39.1% |
| 2013-04-01 | 37.4% |
| 2013-05-01 | 37.4% |
| 2013-06-01 | 36.9% |
| 2013-07-01 | 37.2% |
| 2013-08-01 | 38.0% |
| 2013-09-01 | 36.9% |
| 2013-10-01 | 36.0% |
| 2013-11-01 | 37.4% |
| 2013-12-01 | 37.7% |
| 2014-01-01 | 35.8% |
| 2014-02-01 | 37.0% |
| 2014-03-01 | 35.8% |
Source: Author's analysis of Bureau of Labor Statistics Current Population Survey public data series
Certainly No Sign in March of Excessive Wage Growth Which Would Trigger Inflation
Average hourly wages of private sector workers and of production/nonsupervisory both dropped slightly in March. The chart shows year-over-year growth in hourly wages for both groups. Both are seeing growth rates far below what they were seeing before the recession started, and the “all private sector employees” series has seen no increase whatsoever in nearly three years. In recent months, many commentators have, perhaps surprisingly, raised concerns that our labor market may be tightening enough to be causing excessive wage growth that would trigger inflation. There is no sign of that here. Instead, today’s jobs report shows there remains a tremendous amount of slack in the labor market, which shifts bargaining power away from workers and keeps wages low. Employers do not have to pay substantial wage increases to get and keep the workers they need when workers lack outside options.
No Signs of a Skill Mismatch in Today’s Jobs Report
In an update to last month’s post, the table below shows the March unemployment rate, the unemployment rate in 2007, and the ratio of the two, for a variety of demographic categories and by occupation and industry. Again we see that while (as per usual) there is considerable variation in unemployment rates across groups, the unemployment rate is substantially higher now than it was before the recession started for all groups. The unemployment rate is between 1.3 and 1.7 times as high now as it was six-plus years ago for all age, education, occupation, industry, gender, and racial and ethnic groups. Elevated unemployment across the board, like we see today, means that the weak labor market is due to employers not seeing demand for their goods and services pick up in a way that would require them to significantly ramp up hiring, not workers lacking the right skills or education for the occupations or industries where jobs are available. This commentary provides a more in-depth look at this issue.
Unemployment rates of various demographic groups, 2007 and today
| 2007 | March 2014 | Ratio | |
|---|---|---|---|
| All | 4.6 | 6.7 | 1.5 |
| Male | 4.7 | 6.8 | 1.4 |
| Female | 4.5 | 6.6 | 1.5 |
| White | 4.1 | 5.8 | 1.4 |
| Black | 8.3 | 12.4 | 1.5 |
| Hispanic | 5.6 | 7.9 | 1.4 |
| Age 16–24 | 10.5 | 14.5 | 1.4 |
| Age 25–54 | 3.7 | 5.7 | 1.5 |
| Age 55+ | 3.1 | 4.7 | 1.5 |
| Workers age 25 and older | |||
| High school | 4.4 | 6.3 | 1.4 |
| Bachelor’s and advanced degree | 2.0 | 3.4 | 1.7 |
| Workers under age 25, not enrolled in further schooling | |||
| High school degree | 12.0 | 18.5* | 1.5 |
| Bachelor’s and advanced degree | 5.4 | 8.2* | 1.5 |
| Occupation | |||
| Management, professional, and related occupations | 2.1 | 3.4* | 1.6 |
| Service occupations | 5.9 | 8.3* | 1.4 |
| Sales and office occupations | 4.3 | 6.9* | 1.6 |
| Construction and extraction occupations | 7.6 | 11.6* | 1.5 |
| Installation, maintenance, and repair occupations | 3.4 | 5.2* | 1.5 |
| Production, transportation, and material moving occupations | 5.8 | 8.7* | 1.5 |
| Industry | |||
| Construction | 7.4 | 10.5* | 1.4 |
| Manufacturing | 4.3 | 6.2* | 1.4 |
| Wholesale and retail trade | 4.7 | 7.1* | 1.5 |
| Transportation and utilities | 3.9 | 6.4* | 1.6 |
| Information | 3.6 | 6.0* | 1.7 |
| Financial activities | 3.0 | 4.3* | 1.4 |
| Professional and business services | 5.3 | 7.9* | 1.5 |
| Education and health services | 3.0 | 4.6* | 1.5 |
| Leisure and hospitality | 7.4 | 9.7* | 1.3 |
* This is a 12-month average (April 2013–March 2014), since this series is not seasonally adjusted.
Source: Author's analysis of the Current Population Survey public data series