The debt limit is basically the world's highest-stakes exercise in numerology. epi.org/262360 via and
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Elise Gould
@eliselgould
Economist, bike commuter, ultimate frisbee player. Studying wages, poverty, jobs, health care, and economic mobility. Striving to be part of the solution.
Joined October 2013
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While I was out last week, published annual data on unionization. 's report is a great summary.
The number of unions workers grew in 2022 but non-union jobs grew faster. There's a big gap between union interest & new union jobs.
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Union membership numbers from 2022 were released this morning by @BLS_gov, showing that 200,000 more workers were represented by a union in 2022 than in 2021. There are now more than 16 million workers represented by a union in the U.S. 1/
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In the long run, stopping the growth of earnings inequality should be a key policy goal. However, even with inequality growth as given, Social Security’s finances can be protected from erosion by simply changing how the earnings cap is set (e.g. restore 90%, tax other income).
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The costs of letting the cap wither as wage inequality increases are enormous. What might look like small changes have large implications for the program’s revenues. By 2021, the leakage caused by growing inequality reached almost 11% of total taxes paid.
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The share of earnings subject to Social Security taxes hit a record high of 90% in 1983, a policy choice to shore up Soc Sec funds. But this target has been undercut since by steadily rising wage inequality: In 2021, only 81.4% of all wage earnings were subject to Soc Sec taxes.
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According to my latest research with , annual earnings rose fastest for the top 1% of earners (up 9.4%) and top 0.1% (up 18.5%), while those in the bottom 90% saw their real earnings fall 0.2% between 2020 and 2021.
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As high end wage growth continues to outpace average growth, a growing share of total earnings is spilling over the Social Security cap and escaping taxation.
Lowest earnings share taxed in about 50 years!
For more, please read my post w/:
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Taken together, the last two years of payroll employment growth have been pretty amazing. The two years of job growth following Biden's historic relief and recovery measures were the best in nearly 40 years.
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Overall, today's jobs report is strong, capping off an incredible year of job growth: 4.5 million jobs added in 2022! After 2021, this is one of the best we've seen in decades.
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After some recent signs of weakness, the household survey is showing promise with rising participation and employment in December. The prime-age employment-to-population ratio started to move in the right direction again, back up to 80.1%, nudging closer to pre-pandemic levels.
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Turning to the household survey, the overall unemployment rate ticked down to 3.5% for the "right" reasons as labor force participation and employment rose. Unfortunately, we didn't see any improvement in Black or Hispanic unemployment in December (more volatile series noted).
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Important for policy makers: wage growth decelerated in December no matter how it's measured. Annualized wage growth between November and December was 3.4%. It is decidedly not driving inflation.
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Public sector employment—notably at the state and local level—has seen very slow progress over the last year and for much of the recovery. Private-sector jobs bounced back heartily from fiscal support, but state and local continues to trail, still 2.3% below pre-pandemic levels.
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Notable gains in the payroll survey for December were in education+health and leisure+hospitality, rising 67k over the month. Every month we are chipping away at the leisure+hospitality job shortfall. Small gains and a large deficit in government jobs continue to be troubling.
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Labor market remains strong as wage growth slows. After diverging the last couple of months, the latest jobs report reveals a promising trend in establishment and household surveys: payroll employment up 223,000 and the unemployment rate is down to 3.5% with rising participation.
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Although the quits rate remains above historic benchmarks, it's been coming down for months (even with the mild uptick in November, it's been generally trending down). Hiring continues to outpace quits in every major sector as workers seek and find new jobs.
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As with the level of changes, there were only very slight differences in the hires, quits, and layoffs rates. Over 2022, the hires rate has slowly returned to pre-pandemic levels. The quits rate remains elevated but has also been generally moving back towards historic benchmarks.
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Overall churn in the labor market remains elevated in November as hires softened slightly and quits ticked up somewhat. Though anecdotal evidence may suggest otherwise, there was no increase in layoffs reported, in fact, layoffs dropped a bit between October and November.
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While not much changed in the JOLTS report for November, when we benchmark against latest peaks and troughs, we can see how much these labor market metrics have moderated over the last two years. Job openings and hires are down about 12% from their peaks earlier in 2022.
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Not much changed in the latest #JOLTS data out this morning for November 2022. Job openings, #hires, #quits, and #layoffs changed little between October and November, according to the BLS.
Job openings remain significantly lower than the March 2022 peak.
bls.gov/news.release/p
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High-pressure labor markets narrow race-based employment gaps and extended labor market tightness leads to faster hourly wage growth for low- and moderate-wage workers. Cutting off the recovery will keep these gains from happening.
#BeyondTheNumbers
More:
epi.org/publication/th
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Q3: The Federal Reserve will likely raise interest rates for the SEVENTH time this year by the end of the month.
Who will be the most harmed by these aggressive interest rate hikes?
#JobsDay #BeyondTheNumbers
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I'm concerned by the lack of progress (and downright weakness) in the household survey the past few months. Women seem to be experiencing more losses lately while employment rates have been flat for workers across the board.
#BeyondTheNumbers
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Q2: Racial and gender disparities in our labor market are deeply baked, and many workers are being left behind in this recovery.
Who is being left out of economic prosperity and what should policymakers do about it?
#BeyondTheNumbers #JobsDay
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The bounce back from the pandemic recession has been tremendous because of the fiscal response at the scale of the problem. Compare this to the austere and prolonged recovery from the Great Recession.
#BeyondTheNumbers
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Q1: Today marks the last #JobsReport of 2022! For the last two years, we saw strong job growth.
What policies helped drive such a healthy labor market recovery? What can policymakers do to maintain our strong labor market?
#BeyondTheNumbers #JobsDay
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Though the unemployment rate has remained low, we're seeing little to no improvement in the employment-to-population rate of workers by race and ethnicity. It appears that the recent employment stagnation (or even weakness) in the household survey is broad based.
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The overall unemployment rate held steady at 3.7%, while there were mild improvements in unemployment for Black, Hispanic, and Asian American and Pacific Islander workers.
Note: even near an historic low, Black unemployment continues to be significantly higher than other groups.
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The losses in prime-age employment the last three months were most notable among women, ages 25-54. Women actually exceeded their pre-pandemic EPOP level in August (74.8%), but have been falling ever since. Men's EPOP has been more stable the last few months. (note volatile data)
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Digging into the employment losses in the household survey, we see weakness in the employment rate for workers 25-54. After nearly hitting its pre-pandemic level in August (80.3%), the prime-age employment-to-population ratio has fallen the last three months in a row.
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Turning to the household survey, the unemployment rate continues to be stable and low, but there's been concerning weakness in employment, with losses the last three months. As points out, this could be a sign of coming labor market distress:
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The household survey tends to pick up “inflection points” quicker than the establishment survey, for methodological reasons. So, it’s possible that the household survey is picking up a downturn that is not yet showing up in the establishment survey. Time will tell. 4/
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After seeming to moderate over the last few months, wage growth ticked up in November. It remains to be seen if this is a new trend or if we will continue to see more deceleration in coming months. Certainly a key indicator to watch in upcoming months.
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Public sector employment—notably at the state and local level—has seen very slow progress over the last year and for much of the recovery. Private-sector jobs bounced back heartily from fiscal support, but state and local continues to trail, still 2.3% below pre-pandemic levels.
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While overall jobs have exceeded pre-pandemic levels, some sectors continue to experience deficits. Leisure and hospitality is down 980k since Feb 2020. While there have been small improvements in recent months, govt jobs (e.g. public education) is down 461k since Feb 2020.
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Notable gains in the payroll survey for November were in leisure and hospitality, education and health services, and government employment. Notable declines (continue) in retail trade, somewhat surprising this time of the year.
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On the other hand, the payroll survey—a survey of employers—shows continued gains, up 263k in November, and an average gain of 392k in 2022 so far.
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When the two surveys conflict it may indicate a turning point in the business cycle. The unemployment rate is holding steady—solidly below 4%—but participation has declined for the last four months and employment has declined for the last three, according to the household survey.
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A tale of conflicting employment surveys: The latest establishment-level data from BLS show 263,000 jobs added in November on par with the last few months.
BUT the household survey report continues to show signs of weakness with a decline in employment over the last three months.
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The downward trend in job openings is the most notable feature in today's report (especially in the private sector). It's also important to put the latest numbers in perspective to demonstrate how peak levels in this pandemic business cycle have moderated considerably this year.
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Although the quits rate remains above historic benchmarks, it's been coming down for months. Hiring continues to outpace quits in every major sector as workers seek and find new jobs.
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As with the level of changes, there were only very slight differences in the hires, quits, and layoffs rates in October. Over 2022, the hires rate has slowly returned to pre-pandemic levels. The quits rate remains elevated, but has also been moving towards historic benchmarks.
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While churn remains high, total separations held steady in October as hires softened slightly. Layoffs increased slightly as quits decreased a bit. On the whole, these labor market metrics exhibited very small changes from September.
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