America Is In Full Employment, So Why Aren't We Celebrating? | WGLT

America Is In Full Employment, So Why Aren't We Celebrating?

May 20, 2019
Originally published on May 28, 2019 7:56 am

These are prosperous times in America. The country is plump with jobs. Out of every 100 people who want to work, more than 96 of them have jobs. This is what economists consider full employment.

The economy has grown for almost 10 years, making it one of the longest economic expansions in U.S. history. And over that time, the job market has come back. It grew slowly at first, then steadily, finally reaching a point at which there are many more openings than job seekers.

Unemployment has reached a nearly 50-year low. The jobless rate for Hispanics has never been lower; the past two years have been the best job market ever for African Americans. Wages are starting to rise — and, more significantly, for the lowest-paid workers. That may not endure, but it's a reversal of the long-term trend where the most highly paid workers were also the best rewarded. The job market today is so hot that groups that were sort of on the margins also are finding opportunities — including people with disabilities or a prison record.

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Yet, the country is not quite exuding the self-possession or excitement that should accompany these exceptional times. The last time the American economy grew like this was in the 1990s, during the Internet revolution, when there was the sense of something new happening and the exuberance was palpable.

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So, why doesn't today's full employment come with effervescence?

Part of the reason could lie in the fact that once you look closely, you start to notice cracks in the glossy veneer, and the flaws become visible. Income inequality is still significant. Deep fractures exist within society and on the factory floor. In some cities, new arrivals take the best jobs while the rest struggle to catch up. Economic divisions remain in place along racial and gender lines. Many continue to struggle with student debt and health care costs. And anger over politics may be skewing views of the economy. There's no easy explanation for all of it, and it's hard to unpack all of the reasons why. But here's a snapshot of some of the fault lines that might explain some of this:

Unequal wages in equal jobs

During the Great Recession and the years that followed, wages fell and workers lost negotiating power. Since then, even as the economy has grown, year after year, companies have shown a remarkably high reluctance to raise wages even when they can't find people. It's left economists scratching their heads — this is not how the free market is supposed to work.

One piece of the puzzle behind suppressed wages can be found in the dual wage scale adopted by many factories during the Great Recession, where new hires for the same jobs would get substantially lower pay and benefits. That wage structure proved to be a disaster for morale. It created friction among workers on the factory floor and resulted in poor-quality work. The three big automakers discarded the system, and others followed. Other unions are negotiating their way out of this system, but it hasn't deterred others from adopting it — UPS just adopted this for its drivers.

Record-low unemployment for Hispanics

Hispanics have made tremendous progress in recent years. Their wages have risen among the fastest in any demographic. They have accounted for most of the homes bought in the past decade. Today, Hispanic joblessness has dropped to 4.2% — a historic low. Despite the progress, there's a lot of catching up to do. The Hispanic jobless rate is higher than it is for whites. And they make more than a quarter less than their white coworkers. In fact, Latinos still earn the lowest among any demographic.

Best time for working African Americans

With the economy recovering, the country is seeing another wave of migration among African Americans, this time from Northern cities to the South. The moves are driven by better job opportunities, more affordable housing and the pursuit of a better lifestyle. The rate of joblessness for African Americans in the past two years is the best in history. Despite that, the unemployment rate is more than double that of whites. Another problem: Wages for African Americans have grown more slowly than for any other group in the past 10 years.

There aren't workers to find in Iowa

Ames, Iowa, has an unemployment rate of 1.5% — the lowest in the country. In fact, seven Iowa cities are among the top 50 U.S. metro areas with the lowest unemployment rates, less than 3%. Iowa business owners are having a tough time hiring people, and it's no surprise. Some of them are banding together, clamoring for immigrants. But it isn't easy doing business in a state that's not known to be immigrant friendly, especially since Iowa has passed several bills recently cracking down on illegal immigration.

The gig economy

There's no doubt that the Ubers, Lyfts, Amazons and Instacarts of the world have made the side hustle easy. Anecdotally, we know that stay-at-home parents might do a little Amazon or grocery delivery on the side when the kids are at school. It brings in some extra income.

But surveys show that for many, this is not a side gig: It's their main job. The problem is, these jobs rarely come with benefits. The workers are not even considered employees. There's no job security — you can get fired over text. And the income can vary vastly from month to month because each day, the number of deliveries is different.

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STEVE INSKEEP, HOST:

The U.S. job market sounds amazing right now, with unemployment around 3.6%. But what's it feel like to be in that market? All this week, we're asking what this economy means for people looking for a job, or looking for a better job or looking for a raise. Wages are rising, and some people who'd given up seeking work at all are coming back, yet some old economic divides have persisted. NPR's Scott Horsley spoke with David Greene.

DAVID GREENE, BYLINE: So how tight is this tight labor market right now?

SCOTT HORSLEY, BYLINE: It is tight across the country, but it's really tight in some places. One of my NPR colleagues, Jim Zarroli, is going to take us to Ames, Iowa, which has the nation's lowest unemployment rate. It's just 1.5%. And that means people like restaurant manager Elizabeth Kopecky really struggle to find and keep good help.

ELIZABETH KOPECKY: We, last year, had a call from a restaurant down the street asking if we had any extra staff that they could share. That's how bad it's getting.

JIM ZARROLI, BYLINE: What did you tell them?

KOPECKY: That we didn't have enough for ourselves.

HORSLEY: Even though wages have been going up in Ames, they still have trouble attracting workers. There just aren't a lot of people moving to Iowa, despite the healthy job market. We did find, though, people are moving to opportunities in other parts of the country.

GREENE: Like where? Where are there opportunities right now?

HORSLEY: People are moving to places like Atlanta, Tallahassee, and Charlotte, N.C. We've seen an influx of workers from up north looking for better jobs and also for more affordable housing. In particular, a lot of African Americans are making this move, sort of the reversal of the Great Migration we saw in the last century. NPR's Daniella Cheslow spent some time talking with African-American workers in North Carolina, both newcomers and some longtime residents, like Nicole Muse-Dennis (ph). She's a single mother of two who says she's working 65 hours a week and just barely getting by.

NICOLE MUSE-DENNIS: I'm what I call over-employed. I have two jobs, and I'm still trying to make it.

HORSLEY: Unemployment among African Americans, David, is 6.7 percent. That is low by historical standards, but it's still nearly double the national average.

GREENE: Well, Scott, we've been talking about full employment for a while. And yet, every month, employers are finding more people to hire. So what exactly is happening? Give me the broad look here?

HORSLEY: One thing that's happened is that people who had been out of the job market altogether, either by choice or otherwise, are being lured back in. We have a number of stories in our series about, for example, women coming back into the job market. Sometimes full-time, sometimes in the gig economy. And other groups that were sort of on the margins - for example, people with disabilities or a prison record, those might have been disqualifying in the past, but desperate employers, like Christopher Dickerson (ph), say, not anymore.

CHRISTOPHER DICKERSON: I don't care what your background is. I don't care where you came from. I don't care what color you are. I don't care - as long as you come to work every single day and give me everything that you can give me.

HORSLEY: Over the last couple of years, David, about 7 in 10 new people finding jobs have been coming off the sidelines rather than from the ranks of the unemployed.

GREENE: Well, what does all of this mean for people's paychecks? I mean, for a while, we kept talking about, even though the economy seemed to be doing better and better, wages weren't really keeping pace with inflation.

HORSLEY: Yeah. For a lot of this very long economic expansion, wages did not go up very much. But they are finally picking up. And that's especially true for people on the lower rungs of the income ladder, which is encouraging. There is no question workers have more bargaining power now. And one of the things we looked at in the series is collective bargaining. During the recession, some unions grudgingly agreed to accept lower wages for newer workers, and that created some friction on the factory floor when people were doing the same job for less money. We're finally starting to see some of that turn around. I spoke with Courtney Herring (ph), who works at the Kohler company in Wisconsin. They recently inked a new contract that phases out that two-tiered wage scale.

COURTNEY HERRING: You could tell there was a lot of happy people, a lot of 'em. Production went up. People are wanting to stay for more overtime because they know it's worth their time now. So they're actually able to go out and do more things, or save up for something.

GREENE: All right. One of the voices in our full employment series, which is taking place all this week on the radio. You can also find it at npr.org. And you'll hear more on this program tomorrow. Been talking with NPR's Scott Horsley. Thanks, Scott.

HORSLEY: You're welcome. Transcript provided by NPR, Copyright NPR.