A quasi-healthy job market for 2015
The economy is now consistently producing more than 250,000 jobs per month. Unemployment hit 10 percent at the pit of the recession, but it has now fallen to 5.6 percent – and there’s no reason to think it won’t keep improving for a while.
Yet the labor market still has some pain points: Long-term unemployment is higher than at any time since World War II, millions are not even looking for work and real wages are stagnant for most Americans.
Still, it’s hard to call it a “sick” or “still-recovering” economy with unemployment this low and job-creation this strong.
“Unfortunately, for many, the purpose of work is survival,” says William Rodgers, a Rutgers University economist who studies the changing American workforce. The economy is producing too many jobs that pay the bare minimum, Rodgers says, and don’t offer a way up the economic ladder. Work should offer more, he says.
“If we’re creating workplaces where people aren’t paid enough to meet their families’ needs, aren’t able to enjoy themselves, be creative – that’s lower productivity, that’s lower economic growth,” Rodgers says.
The post-recession employment landscape has been fundamentally altered because of the financial crisis, labor-saving technology and perpetual corporate cost-cutting, according to Susan Lambert, a University of Chicago professor of social work.
One key change, Lambert says: the rise of part-time low-paid jobs, often temporary, with unpredictable schedules and too few hours. She says this “just in time” type of staffing is spreading in retail, manufacturing, academia, journalism and beyond.
“People have a greater sense of insecurity,” says Lambert. “It makes it very difficult for people with unpredictable, unstable schedules to maintain employment. Because at some point often they have to decide: their kids or their job.”
But these employment trends are not some post-recession “new normal,” counters Douglas Holtz-Eakin, an economist with the American Action Forum.
“The degree to which the world is fundamentally different – this gets floated about every five years, and it’s always overstated to a great extent,” Holtz-Eakin says. “A very bad recession and financial crisis didn’t change the fundamentals of how economies grow and the way people benefit from economic growth.”
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