For the first time in years we can declare the latest jobs report a near-unmitigated success.
Employers added 321,000 jobs, a figure that far exceeded the consensus forecast of economists, who expected 228,000. Hourly wages rose 0.4 percent, the largest gain in 17 months. The average length of the workweek ticked up to 34.6 hours. The median number of weeks of unemployment fell to 12.8, the lowest since the recovery began. The labor force participation rate remained near historic lows, but its decline seems to have finally leveled off.
So why did we say near-unmitigated? Tami Lubhy, writing for CNN, gives us the answer:
Young workers still struggle: While hiring is picking up, many of the jobs aren’t high-paying ones. Millennials, in particular, have lost ground, according to a new report from the Young Invincibles, an advocacy group for that generation.
Median annual wages have fallen in nearly all of the most popular industry sectors that employ 25 to 34-year-olds over the past decade.
In retail and wholesale trade, which employs the largest share of these older Millennials, median wages plummeted 15% to $25,000. Wages in the leisure and hospitality industry fell 5% to $18,000. Only healthcare, the second most popular field, saw wages grow, albeit by a paltry 2% to $30,000.
That problem becomes compounded by the fact that Millennials are job-hopping at historically low levels. While employers may be happy by the apparent loyalty of their young workers, it’s actually a very bad sign for the economy.
The decision to stay in a job can be read as an indicator that young adults still lack a viable job market. Jonnelle Marte reports for CNN:
Job hopping, when it’s possible, has emerged as one of the few ways to escape those lower wages, especially since the rewards that companies have historically offered for employee loyalty — pensions and pay raises — continue to diminish.
Take raises, for instance. Wages are projected to grow by 0.3 percent in the fourth quarter from a year ago, according to PayScale, a company that tracks salary information. That is down from the 2.9 percent increase seen in the fourth quarter of 2007.
And traditional pensions, once a bastion of retirement security offered to long-term employees, are now only offered to new hires by seven percent of Fortune 500 companies, down from about 50 percent in 1998, according to benefits consulting firm Towers Watson. All of that means that employees don’t get as much for staying with the same company for long.
Rather than continue to move up the salary ladder or seek to fill in skill gaps by regularly leaving for higher paying jobs, young adults appear stuck in entry-level work like retail or hospitality. That decision could lead to a generation of “lost” workers, an entire group of people who will never fulfill their career or earnings potential. Numerous studies have shown that entering the job market in a recession, especially in a low wage jobs, has negative effects on a person’s income, even a decade after the end of a recession. Of course, that also has the impact of sucking their buying power out of the economy.
Fortunately, things tend to be looking up. The Republican majorities in the House of Representatives have been able to add a much-needed dose of tax and regulatory stability, two of the key factors to boost hiring. And further reinforcements, in the form of a Senate majority, could help to further create a policy environment conducive to hiring and growth.
If so, expect the recent string of positive jobs reports to continue, a hopeful sign that jobs will become more plentiful and that the market for talented employees will become more competitive. Only then will some Millennials feel comfortable taking the risk to walk away from the comfortable, but low-wage job they have now.