No matter how dismal the monthly Bureau of Labor Statistics jobs reports, the financial media invariably presents them as positive, hopeful, or trending in the right direction. After all, Federal Reserve officials like to boast that the economy is at or near full employment.
But ask any of the millions of unemployed and under-employed Americans struggling to find a job, and they’ll give you a more realistic answer. In August, Amazon held a jobs day fair at 12 of its warehouses with the goal of hiring 50,000 new employees nationwide. The positions Amazon wanted to fill were relatively low-paying, between $12 and $15 hourly. But the physically demanding jobs also offered health care, a perk not normally included in low-paying jobs.
In Baltimore, for example, thousands lined up for the chance at a face-to-face interview including a mother of three who has been laid off eight times since 2008. Lisa Pendry told the Washington Post that “It doesn't matter what it is anymore, I just need a job.” But Pendry never got an interview; she left after spending five hours in a line that had at least four more hours to go before she’d get to the head.
Marshall Steinbaum, research director at the liberal Washington D.C. Roosevelt Institute, said that the Amazon experience proves that despite many economists’ claims the labor market has not recovered.
Steinbaum: "Fed officials are talking about full employment, but that is a misdiagnosis of the current state of the economy. The wage data is what should rule here, and the wage data do not suggest an economy at full employment."
Although today’s headlines read that the unemployment rate is the lowest since 2000, 4.1 percent, the October BLS report confirms Steinbaum’s theory. The overall data was miserable: the economy created a lower than anticipated 231,000 jobs, less than Wall Street’s 300,000-plus projection. Worse, the October labor force participation rate declined to a four-decade low from last month’s 63.1 percent to 62.7 percent. The number of people who exited the labor force last month soared by a near-record 968,000, the third highest in history, and pushed the numbers of people detached from the labor force to an all-time high 95.4 million. Last month, the civilian labor force shrunk by a staggering 765,000 in one month, and employed Americans dropped 484,000.
The BLS statistics showed that part-time, low-paying restaurant industry jobs were the biggest contributor to employment growth, 89,000, while better paying manufacturing and construction payrolls increased by 24,000 and 11,000 respectively. Wages, Steinbaum’s gauge for a healthy labor market, were a dismal failure—0.2 percent month over month uptick.
The Trump administration, in addition to supporting the RAISE Act that would gradually cut legal immigration from one million annually to 500,000 and in the process reduce the numbers of legally authorized works, needs to re-evaluate the wisdom on non-immigrant employment- based guest worker visas. The last thing American workers need is more job competition.