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Economic Indicators • By Elise Gould
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This morning’s report from the Bureau of Labor Statistics (BLS) showed that the economy added 250,000 jobs in October. (The BLS reports that Hurricane Michael had no discernible October’s jobs numbers.) Average payroll employment growth over the last three months is now 218,000, in excess of what is needed to absorb new and returning labor market entrants. The unemployment rate held steady at 3.7 percent alongside modest improvement in labor force participation rate and the employment-to-population ratio, each increasing 0.2 percentage points. Narrowing analysis to the prime-age population, 25 to 54 years old, we see even more significant gains. The prime-age labor force participation rate rose 0.5 percentage points while the employment-to-population ratio rose 0.4 percentage points. Workers are continuing to return to the labor market and many of them are getting jobs. There’s still work to be done to reach full employment, but this paints a very promising picture for the economy moving forward. After driving the car with the brakes on for the several years prior to the current administration, policymakers have finally increased government spending. Expansionary fiscal policy, particularly spending, works to boost the economy.
Furthermore, nominal wage growth continues to show promise, increasing 3.1 percent over the year. This is the first time we’ve hit at least 3 percent wage growth since April 2009. This is definitely a strong signal that workers are finally beginning to see an improving economy reach their paychecks. However, until nominal wages are rising by at least 3.5 percent—and for a sustained period—there is no threat that price inflation will begin to significantly exceed the Federal Reserve’s 2 percent inflation target and the Fed should act accordingly by letting the economy continue to strengthen. While today’s numbers are a significant improvement,
it will take stronger and sustained wage growth for workers to begin to reap the benefits of economic growth—and to achieve a genuine recovery from the Great Recession.
This is all the more important for workers and their families who still have much to gain from a genuine full employment economy. Yesterday’s Latina Equal Pay Day highlighted just how different outcomes are in the economy for different people. The benefits of a growing economy must be allowed to reach all corners of the labor market, black and Hispanic as well as white, young as well as prime-age, and high-school-educated as well as college-educated.
12 states and D.C. have a black unemployment rate at least twice that of white unemployment
The highest African American unemployment rate is in the District of Columbia at 12.4 percent
In a state-by-state breakdown of unemployment rates by race and ethnicity for the third quarter of 2018, Economic Analyst Janelle Jones shows that, while there have been nationwide improvements in prospects for black and Hispanic workers, their unemployment rates remain high relative to white workers in every state.
Of the states for which data are available, the highest African American unemployment rate was in the District of Columbia (12.4 percent), followed by Illinois (9.3 percent), Louisiana (8.5 percent), Alabama (7.1 percent), and New York (7.0 percent).
The highest Hispanic state unemployment rate is in Nebraska (5.9 percent), followed by Connecticut (5.7 percent), Arizona (5.6 percent), Pennsylvania (5.6 percent), and Washington (5.6 percent). In two states, the Hispanic unemployment rate was lower than the white unemployment rate. In Colorado, Hispanic workers’ 2.3 percent unemployment rate was lower than the 2.9 percent rate for white workers (a ratio of 0.8-to-1.) In Georgia, Hispanic workers’ unemployment rate was 2.8 percent vs. 3.0 percent for white workers (a ratio of 0.9-to-1). The ratio of Hispanic unemployment to white unemployment was highest in Nebraska (3.0-to-1), Idaho (1.9-to-1), and Virginia (1.9-to-1).
Meanwhile, the highest white state unemployment rate is 5.0 percent, in West Virginia, and lowest (1.2 percent) in Hawaii.
Among states, the unemployment rate for African Americans was lowest in Massachusetts and Virginia (3.8 percent), and highest in Illinois (9.3 percent); in the District of Columbia, it was 12.4 percent. The District of Columbia also had the highest black unemployment rate during the previous eight quarters.
“As the economy continues to recover, all racial and ethnic groups are making employment gains,” said Jones. “But policymakers should make sure that the recovery reaches everyone before taking their foot off the gas.”
Massachusetts had the smallest black–white unemployment rate ratio in the third quarter of 2018—black unemployment in Massachusetts was only 1.1 times the white unemployment rate. Meanwhile, as in the previous eight quarters, the largest gap was in the District of Columbia, where the black unemployment rate was 6.2 times the white rate. The next highest unemployment ratios were in Illinois (3.0-to-1), Louisiana (2.8-to-1), South Carolina (2.7-to-1), and Alabama (2.4-to-1).
Nationally, in the third quarter of 2018, African American workers had the highest unemployment rate nationally, at 6.3 percent, followed by Hispanic (4.5 percent), white (3.2 percent), and Asian workers (3.0 percent).
EDD receives $7.7 million to help re-employ 1,100 laid-off workers
Workers in 15 counties who lost jobs due to trade and automation to receive training for jobs in high-growth industries
SACRAMENTO – The California Employment Development Department (EDD) announced it received a $7.7 million Trade and Economic Transition Dislocated Worker Grant from the U.S. Department of Labor to help re-employ 1,100 unemployed workers in 15 counties. The funds will provide job training and support services to workers who have lost jobs in industries affected by trade or automation and prepare them for careers in high-growth industries.
“When businesses close, we put a priority on getting Californians back to work in growing industries,” said EDD Director Patrick W. Henning. “Rapid business growth in California requires employees with specialized skills, and we urge affected workers to take advantage of the training and career services that can lead to good jobs in growing business fields.”
The grant funds will support efforts in seven local workforce development areas to retrain workers who have lost jobs in industries that were severely impacted by new trade, automation or technological advances. Examples include retail stores that have closed in the wake of growing competition from internet sales, manufacturing companies that have moved operations, and quickly-evolving technology companies that require workers to continually adapt to changing skill demands.
Employment services will help laid-off workers develop the skills necessary to compete for current and sustainable careers in high-growth industries. Affected workers will be provided career counseling, skills assessment, occupational training, and paid on-the-job training opportunities.
Each of the workforce areas has targeted in-demand industries where employers are looking to hire skilled employees. These industries include transportation, operations and maintenance, construction, manufacturing, healthcare, energy, administrative and support services, value-added agriculture, and professional, scientific and technical services.
Counties served by the workforce grants include Alpine, Colusa, El Dorado, Glenn, Kings,
Los Angeles, Placer, Sacramento, San Bernardino, San Joaquin, San Mateo, Santa Clara, Sutter, Yolo, and Yuba.
EDD recommends that all individuals interested in receiving employment assistance register at local America's Job Center of California SM locations, which also offer no-fee employment services and training resources.
News from EPI
A ruling against state and local government unions in Janus will have negative consequences for public services as well as workers
IIn a new issue brief, EPI Director of Policy Heidi Shierholz and Director of Labor Law and Policy Celine McNicholas outline the profound negative consequences that a ruling for the plaintiff in Janus v. AFSCME Council 31 will have on public sector workers’ wages and job quality, as well as on the critical public services these workers provide.
Shierholz and McNicholas provide a breakdown of the state and local government workers whose wages and job quality are at stake. Workers in education make up more than half of all state and local government workers, with elementary and secondary school workers alone making up nearly 40 percent. In addition, millions of state and local workers work in justice, public order, and safety activities (primarily police officers and firefighters); hospitals; individuals and family services; public transportation, museums and similar institutions; libraries; home health care services; waste management services; and child day care services.
“These workers are the backbone of our communities. The critical public services they provide are put at risk as attacks on collective bargaining erode their compensation and job quality,” said Shierholz. “The stability and experience of state and local government workers—and the quality of services they provide—is one of the things that is at stake in the Supreme Court’s decision in Janus.”
The authors show that state and local government workers earn less than similar private-sector workers. Comparing the hourly wages of state and local government workers with those of private-sector workers after controlling for education, age, gender, race, ethnicity, and other factors known to affect pay, workers in state and local government make between 3.7 and 8.2 percent less on average than their private-sector counterparts.
However, state and local government workers who are represented by a union earn substantially more than similar workers who are not. A careful analysis of wage data shows that state and local government workers who are covered by a union contract earn between 10.7 and 13.6 percent more in hourly wages than their nonunion counterparts with the same level of education and experience.
“The recent teachers’ strikes in states such as West Virginia and Oklahoma provide examples of the effect of denying working people access to effective collective bargaining,” said McNicholas. “It is likely that other state and local government workers would be forced to resort to similar tactics following a Supreme Court decision in favor of the Janus plaintiffs. This means that more communities may face disruptions in everything from education to child and elder care services, public safety services, and municipal services.”
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