This morning’s jobs report showed that the economy added 155,000 jobs in November. This is slower than the previous month, but it’s still above what’s required to keep up with growth in the working age population. In other words, despite many claims that the economy is at full employment, we keep pulling more and more people in off the sidelines—there is still room to increase labor force participation and drive down unemployment. Year-over-year nominal wage growth held steady at 3.1 percent, still below target levels.
Although payroll employment was softer than expected in November, a variety of indicators have moved in right direction in recent months. We should take this not as a sign that the economy is done expanding from the depths of the recession but as a sign that there is still more room to grow. The Federal Reserve should not be too quick to raise rates when it meets this month, lest we fail to garner all the benefits from full employment.
As union coverage and labor standards have eroded in recent decades, workers have increasingly depended on tight labor markets to see strong wage growth. However there are other things policymakers can do to boost wages, from raising the minimum wage to strengthening overtime protections and making it easier for workers to bargain collectively. EPI recently released a comprehensive agenda that contains a full complement of these policies, should the new Congress decide to make the issue of raising wages a priority.