Unemployment Down – So Too Is Wages!
According to the Bureau of Labor Statistics, the U.S. economy added 214,000 jobs in October. This has resulted in the unemployment number inching down to 5.8 percent, the lowest in six years.
The Financial Times’ Eric Platt noted that this is the ninth straight month in which employers added 200,000 jobs or more. The last time the economy experience such long spell was between 1993-1995 and lasted 19 months.
Unemployment Rate in the United States averaged 5.83 Percent from 1948 until 2014, reaching an all-time high of 10.80 Percent in November of 1982 and a record low of 2.50 Percent in May of 1953.
Based on the BLS numbers, the unemployment rate among the various worker groups reflects the following, whites declined to 4.8 percent in October. The rates for adult men (5.1 percent), adult women (5.4 percent), teenagers (18.6 percent), blacks (10.9 percent), and Hispanics (6.8 percent) changed little over the month. The jobless rate for Asians was 5.0 percent (not seasonally adjusted), little changed from a year earlier.
However, although unemployment has shown a steady decline over a relatively long period, wage freeze continues across various business sectors, much to the chagrin of many employees in the labor force.
Huffington Post’s Ben Walsh pointed out that pay rose a paltry 0.1 percent in October and is up 2 percent in the past year. This he asserted that that’s just 0.3 percentage points above inflation, which is currently rising at an annual rate of 1.7 percent.
He further noted that there are lots of potential explanations for why unemployment keeps dropping without driving wages higher. The number of Americans sitting on the sidelines of the job market is still relatively high, for one thing.
“The negatives of lousy wage growth are obvious. There are positives, too, though they’re a lot less obvious: With wage growth stagnant, there is no indication that inflation is going to rise anytime soon. That means there’s no pressure – aside from ideology – for the Federal Reserve to raise interest rates to slow down the economy,” reported Walsh.
Yvad Billings, Readers Bureau, Fellow
Do you want to add feedback to this story? Please add comment in box below.
Like our Facebook page https://www.facebook.com/TheReadersBureau
Follow us on Twitter https://twitter.com/readersbureau21