What to Watch on Jobs Day: Keeping and eye on the teacher jobs gap

On Friday, the Bureau of Labor Statistics will release September’s numbers on the state of the labor market. As usual, I’ll be paying close attention to nominal wage growth as well as the prime-age employment-to-population ratio, which are two of the best indicators of labor market health. Friday’s report will also give us a chance to examine the “teacher gap”—the gap between local public education employment and what is needed to keep up with growth in the student population.

Thousands of local public education jobs were lost during the recession, and those losses continued deep into the official economic recovery, even as more students started school each year. This has been true of public sector jobs in general—continued austerity at all levels of government has been a drag on public sector employment, which has failed to keep up with population growth.

Teacher strikes in several states over the last couple of years have highlighted deteriorating teacher pay as a critical issue. My colleague Emma Garcia has forthcoming work that further documents shortcomings in the teaching profession today, including important issues of quality, particularly worse in high-poverty schools.

The costs of a significant teacher gap are high, and consequences measurable: larger class sizes, fewer teacher aides, fewer extracurricular activities, and changes to curricula. Last year, the local public education job shortfall remained large. To solve this problem, state and local governments need to fund more teaching positions and raise pay to close the teacher pay gap and attract and retain high quality teachers. On Friday, I will compare where jobs in public education should be, using the pre-recession ratio, student population growth, and the most recent jobs numbers.

Despite an unemployment rate that continues to hover around 3.9 percent, the labor market is displaying signs that we are still not yet at full employment. The prime-age employment-to-population ratio is still below its 2007 peak, as well as far below (2.6 percentage points below) its height in 2000, which is the closest we’ve come to a full employment economy in recent history.

Nominal wage growth, meanwhile, is still below levels consistent with the Federal Reserve’s inflation target combined with long-term potential productivity growth, where it would be expected to be in a stronger economy. And, the Fed’s current path is intentionally keeping unemployment from dropping further and workers from getting any additional leverage to bid up their wages. Reaching genuine full employment should be the main concern of the Fed so that workers—white and black, young and old—see the benefits of tight labor markets in their job prospects and wages.