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Solid employment growth in January, wage growth remains indicator to watch

By Elise Gould • February 7, 2020

This morning’s Bureau of Labor Statistics (BLS) data show that U.S. employers hired 225,000 additional workers in January on net, confirmation that employment growth remains solid. As I mentioned yesterday, the BLS issued its final benchmark revisions to total nonfarm payroll employment as part of today’s report. The benchmark revisions use state unemployment insurance tax records and came in a bit higher than initially reported. The downward revision of 514,000 fewer jobs in March of 2019 represents a meaningful slowdown from initially released job growth. Average monthly job growth in 2019 was 175,000—still weaker than 2018’s average growth rate of 193,000, even considering these benchmark revisions, which disproportionately lowered 2018 data. Payroll employment reflected a loss in manufacturing jobs over the past month (-12,000) as well as gains in construction (+44,000) and education and health services (+72,000).

 

The unemployment rate ticked up slightly to 3.6% from 3.5% in December. This is the 23rd month in a row when unemployment has been at-or-below 4.0%. The labor force participation rate ticked up slightly as well as the employment-to-population ratio, which is an indication that the unemployment rate rose for the right reason, last month as well as over the last year. More people keep getting pulled in off the sidelines, as we get closer to full employment.

 

Unfortunately, this tightness isn’t translating into stronger wage growth. Nominal wages rose 3.1% year-over-year in January, likely reflecting the increases in state and local minimum wages that took effect in January. December’s weaker wage growth for production nonsupervisory workers now appears to be a bit stronger in January with year-over-year wage growth increasing to 3.3%. Overall, wage growth is still slower than expected in an economy that has had historically low unemployment and remains the most important indicator to watch in 2020.

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News from EPI

Number of striking workers surged in 2018 and 2019

Data show largest two-year average in 35 years

February 11, 2020

After decades of declining strike activity, data on major work stoppages from the Bureau of Labor Statistics—including new 2019 data released this morning—show that there was a substantial upsurge in 2018 and 2019, with 485,200 workers involved in major work stoppages in 2018 and 425,500 workers involved in major stoppages in 2019—together they make up the largest two-year average in 35 years. In 2017, only 25,300 workers were involved in work stoppages. Work stoppages are primarily composed of striking workers.

 

“Even though we are 10 years into an economic recovery and the unemployment rate is under 4%, working people are still not seeing the kinds of robust wage growth that those at the top have seen for decades,” said EPI Policy Director Heidi Shierholz. “The increase in strike numbers shows that workers understand that joining together in collective action remains an effective way to raise wages and benefits, and improve working conditions.”

 

In 2019, there were 10 work stoppages involving at least 20,000 workers, the largest number since 1993, when BLS began providing data that made it possible to track work stoppages by size. The largest strike involved nearly 50,000 workers walking out of General Motors factories across the country with the goal of preserving job security, improving wages, and retaining health care benefits. The six-week strike ended with a United Auto Workers contract that improved wages, stayed health care costs, and committed investments for American factories.

 

30,000 workers also went on strike in 2019 at Stop & Shop, a New England-based grocery chain, over a drastic increase in health care costs. The 11-day strike concluded with the United Food and Commercial workers and Stop & Shop agreeing to a contract that preserved health care benefits, increased wages, and maintained time-and-a-half pay on Sunday for current employees.

 

“The resurgence in recent strike activity has occurred despite current policy that makes it difficult for many workers to effectively engage in their fundamental right to strike,” said EPI Policy Associate Margaret Poydock. “Corporate influence has eroded labor law and allowed worker protections to stagnate. We need fundamental labor law reforms like the PRO Act in order to bring worker protections into the 21st century.”

 

The U.S. House of Representatives recently passed the Protecting the Right to Organize (PRO) Act, which would expand the scope of lawful strikes and prohibit employers from permanently replacing striking workers.

 

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