More Recovery and Reform, Please!
The Employment Situation—December 2021
By FRANK STRICKER
Here are four key points to consider about the December 2021 Jobs report.
1. Just Pretty Good. This is not a bad job report. Even though we in the National Jobs for All Network believe it is a serious undercount, a 3.9% unemployment rate is historically quite a low official unemployment rate. And it’s a plus for employee bargaining leverage.
But the report is not as “overwhelmingly positive” as one of our friends described it. The job additions from the survey of business and government organizations were very low--just 199,000. That number will increase as more data come in, but the final count won’t be good.
Other concerns? The December report does not reflect the impact of the omicron strain. The report for January will show the effects of more people getting sick and not coming to work. More school kids at home could also depress employment levels.
Among other negatives in the Employment Situation (ES) is the fact that while the white unemployment rate fell from 3.7% to 3.2% and the rate for Latinix fell from 5.2% to 4.9%, the African-American unemployment rate rose from 6.5% to 7.1%. And the reason was not a surge in the number of black people searching for jobs. Also, the black teen unemployment rate was down a point but still very high at 21%.
2. Real Wages. Wages have been rising over the last year: 5.8% for average workers. But that percentage omits the effect of inflation on buying power. We’ll get the new real earnings report soon, but last month’s issue showed that while hourly wages for average workers rose 5.9% from November to November, consumer prices rose faster. So the purchasing power of an average hour of work fell 1.6%. It is true that wages in the lowest sector, Leisure and Hospitality, have increased much faster than inflation, but they are still lousy. Yes, $16.97 an hour is 16% over December of 2020, but it is still hard to live on. And millions of people earn less than the average.
3. Inflation. The inflationary surge is harmful in several ways. It eats away at real wages and it may push important reform initiatives to the back burner. Are there effective ways for government officials to deal with it? They can continue to tell people to hang on: high inflation is a mainly a supply-chain issue and things will eventually iron themselves out. But more is needed. Explain that high inflation and supply-chain issues are evidence of positive policies--government spending that promoted job recovery and also helped people buy a lot of stuff even when they were unemployed. The Biden administration should more frequently deploy its best economics communicators to explain these things to the people. Also, Democrats should strive to legislate individual parts of the Build Back Better program. The improved Child Tax Credit would provide a partial cushion against higher prices.
Regarding anti-inflationary programs, some cures are worse than the disease. The Federal Reserve intends to trim the money supply and lift interest rates. Meanwhile, centrist and right-wing politicians resist federal spending for working-class households. But higher interest rates and less federal spending mean fewer jobs, fewer job vacancies, more unemployment, and the end of an unusual period of rising employee bargaining leverage.
4. Wanted: Seven to Fifteen Million New Jobs. We have not completed the recovery from the Pandemic Recession, and, as NJFAN’s Full Count shows, we are miles away from real full employment. Millions of potential workers are still on the sidelines. Even by conventional measures we are 7 million jobs short of where we would have been today if we had not had the COVID recession.
Frank Stricker is on the Board and Executive Committee of the National Jobs for all Network and a member of Democratic Socialists of America. He is emeritus history professor, California State University, Dominguez Hills. His book, American Unemployment: Past, Present, and Future (2020).--shows that excessive unemployment, not real full employment, has been the rule for most of the last century and half.
In case you missed it: Frank Stricker's analysis of the November jobs report
Also see the December 2021 NJFAN Newsletter Democratizing Work, and Why the Definition of Full Employment Matters!!
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