U.S. Job Market’s Strength Is Allowing More to Share in Pay Gains

1/5/18
 
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from The New York Times,
1/5/18:

The bustling United States economy is beginning to benefit some American workers who have not gotten a taste of the recovery and have been most in need of relief.

That picture was reinforced by a report on Friday from the Labor Department, which showed an increase of 148,000 jobs last month. The figure fell short of economists’ expectations, but some of the most impressive job gains in the past year were in blue-collar and service industries that pay a decent salary.

Over all, average hourly earnings were 2.5 percent higher in December compared with the year before, scarcely keeping up with inflation. But other data shows that wages have increased most for the least-educated workers and for people in many industries that are generally low-paying.

“Growth is strong, and the benefits of this growth have been widely shared,” Jed Kolko, the chief economist for Indeed.com, a job-search site. “This has been a year in which some of the gaps in the economy that had been growing narrowed a bit.”

Manual-labor positions are the kinds of jobs that President Trump has promised to bring back in droves, so progress could be politically important. Hiring picked up fastest in construction and mining. Manufacturing, which lost jobs in 2016, expanded last year at a respectable clip, part of a global resurgence.

Most economists say presidents do not generally determine the economy’s course, and it is too early to measure the hiring effects of the tax cut signed into law last month. But Mr. Trump’s agenda may be having an impact on the economy in other ways. His push to dismantle regulations on businesses seems to have emboldened corporations to start putting more money into machines and plants, the kind of spending that drives broad growth.

A separate survey of manufacturers released on Wednesday suggested that American factories have picked up their orders, production and hiring over the past year.

Democrats offered a less sanguine view of the labor market…

There are signs beneath the surface, though, that more widespread wage growth may be around the corner.

The security industry, for example, where pay is below average, showed a 7 percent increase in hourly earnings in November from a year earlier. Workers in clothing stores and food services — two huge, generally low-paying businesses — saw wages rise by around 4 percent in that period.

In areas where unemployment has dipped below the national rate, pay has begun to accelerate. Cities where joblessness is 3.5 percent or lower have had an impressive 4 percent year-over-year increase in earnings, said Ian Shepherdson, chief economist of Pantheon Macroeconomics.

In Indianapolis, where unemployment reached 3.1 percent in November, wages for jobs in the private sector rose by nearly 5 percent in the second quarter compared with a year earlier.

The tight job market has been especially tough on Bob Peterson, the chief executive of Melton Truck Lines, because he requires a drug test for everyone who comes through the door. Many fail, especially after several states legalized marijuana for medical or recreational use.

“There’s guys and gals that like to smoke weed, but they can’t drive a commercial vehicle because it’s prohibited,” Mr. Peterson said. “Some people get here and we find out, oops, they have been smoking or injecting.”

“No one is having an easy time hiring blue-collar workers today,” Mr. Peterson said.

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