American Labor Market: More Jobs, Poor Pay

November 9, 2017 by Douglas A. McIntyre

Among the concerns about job growth in the United States as its recovered from the Great Recession was that low-paying jobs were too large a part of the advance. As unemployment dropped to a 17-year low at 4.1%, some of the workforce was left behind as pay for some positions stagnated or fell. New research confirms the extent of the problem.

New data from a Pew report shows this:

The public’s views of local job availability continue to improve. Currently, 50% of Americans say there are plenty of jobs available in their communities – the highest number saying that jobs are plentiful in Pew Research Center surveys dating to 2001.

Since June 2016, the share saying plenty of jobs are available has increased seven percentage points, from 43% to 50%, with virtually all of the change coming among Republicans. Yet in both parties, perceptions of the local job situation are much more positive today than they were three or four years ago.

However, the public’s brighter outlook on jobs has not been matched by comparable improvement in views of whether people’s incomes are keeping pace with the cost of living.

Arguably, part of the reason for the perception is that some employers learned that among the means to protect their profits were the ability to employ people part time and also to employ people without providing good benefits, if they proved benefits at all.

The Pew report shows that the number of people who believe that they are doing better in terms of what they earn is very small:

Currently, 49% saying their family’s income is falling behind the cost of living, while 40% feel they’re staying about even and just 9% feel like they’re getting ahead. These views are little changed over the past two years, though the share saying they are falling behind financially is lower today than in 2014 or early 2015.

There is a case to be made that inflation has been so low that the belief that so many people have lost ground is groundless. That pits the perception of people’s situations against the reality of the change of the cost of living. Nevertheless, the fact that half of those surveyed are falling behind tinges the strength of the recovery.

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