The economy is strong enough that even education isn't stopping people from being hired. But wages are still stuck.
People with the least education are finding employment, in some cases at record levels, as the slow-but-steady economic expansion continues.
The least educated workers are likely to have the most difficult time getting jobs, something that has accelerated as low-end manufacturing has moved offshore and low-skilled tasks have become automated.
This finding, from researchers at the Federal Reserve Bank of Atlanta, jibes with other relatively good news in the labor market. For example, the unemployment rate for African-Americans hit a record low earlier this year, even though it remains higher than the overall national rate.
This improvement in the job outlook for typically high unemployment groups is almost entirely a function of the length of the expansion. It’s the second longest on record and could become the longest next July.
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(Just for the record: The economy has added fewer jobs in President Donald Trump’s first year in office than in any single year of President Barack Obama’s second term, and the rate hasn’t changed much since.)
The same good job outcomes came from the 1990s boom, which is the record-holder now.
One might be tempted to say a rising tide lifts all boats.
By the late 1990s, wages adjusted for inflation were rising for all workers, something that hasn’t happened yet this time.
Economist Jared Bernstein points out that wage stagnation affects 82 percent of the workforce, especially in manufacturing and non-management jobs in services.
Writing in the New York Times, Bernstein said this is a result of workers’ steadily losing bargaining power.
“Even at a time of low unemployment, their bargaining power is feeble, the weakest I’ve seen in decades,” he wrote. “Hostile institutions — the Trump administration, the courts, the corporate sector — are limiting their avenues for demanding higher pay.”
Critics of this argument say the problem is what they call a skills gap.
For example, the National Federation of Independent Business, the small-business advocacy group, produced a survey in 2016 indicating that many small employers are having trouble finding qualified job candidates.
This may be true in certain sectors. But it doesn’t pass the smell test on a large scale.
“When employers can’t find workers with the skills they need at the wages they are offering, they will raise wages in order to attract qualified workers…,” according to Heidi Shierholz and Elise Gould at the Economic Policy Institute.
They continue: “…if employers can’t find the workers they need among the unemployed, they will offer higher wages in an attempt to poach needed workers from other firms, who will then raise wages in an attempt to keep their workers, and so on. In other words, if there are skills shortages, we should see signs of faster wage growth for workers with needed skills.”
Wage growth for higher-skilled workers would increase all wages. Yet over the past year, real wages for private-sector workers haven’t grown at all.
Meanwhile, millions of Americans have been made obsolete by technology, mergers, age discrimination, the weak recovery — at best it takes them longer to find work and at lower wages.
This is in contrast to the bull market and rising incomes for the top 10 percent, especially the wealthiest 1 percent.
Some boats are not only bigger than others, but also floating in much higher lakes.
The “rising tide” expression is attributed to President John F. Kennedy. As a senator in 1960, he used the expression in a speech advocating vigorous federal infrastructure spending to benefit all.
But that was then.
Our recovery was badly hampered by federal “austerity,” surely another of the causes behind lagging wages, too.
• Washington’s gross domestic product grew 3.6 percent in the first quarter, strongest in the nation. Oregon’s output advanced 1.9 percent, Alaska 1 percent and Idaho 0.4 percent.
• Here’s a snapshot before the pain of tariffs kicks in: Washington merchandise exports totaled nearly $30 billion as of May, according to WiserTrade. That’s slightly ahead of the same period last year. Don’t expect it to last.