Watch Burnes Center for Social Change Senior Fellow Seth Harris in conversation with Alicia Modestino, Associate Professor at Northeastern University, and Elise Gould, Senior Economist at the Economic Policy Institute, as they discuss the Bureau of Labor Statistics’ jobs, wages, and unemployment report for June 2023. This conversation was aired live on the homepage of the blog at 8:45 AM ET on Friday, July 7—just 15 minutes after the release of the report.
Listen to the podcast, here.
Headline Numbers
Seth kicked off the conversation with the highlights from this month’s report:
- Unemployment rate fell slightly from 3.7% to 3.6% in June.
- The U.S. economy created 209,000 jobs in June, a decrease from May’s 306,000 jobs and April’s 217,000 jobs
- Job growth has slowed in 2023. The average increase in jobs by month in 2023 has been 278,000 jobs. The average monthly increase in 2022 was 401,000 jobs while the average increase over the last 12 months was 304,000 jobs.
- Wage increases remained strong in June. Average hourly earnings increased in June by $0.12, a slight raise from the $0.11 increase we’ve seen in the last months
- Wage increases exceeded the last inflation reports. Consumer price index rose 0.1% in May and the personal consumption expenditure index also rose 0.1%. So, workers seemingly experienced an increase in “real wages” — that is, purchasing power.
Is This Report Good for Workers, Bad for Workers, or is it a Mixed Bag?
Alicia says the report is “good for workers”:
- Overall this report is good for workers. Even if it’s not the same wild jobs growth we’ve seen over the last few months/years, it’s a straight-down-the-middle jobs report. Growth also is in line with what we saw in payroll reports (209 in household report, 273 in payroll report)
- Wages growth slowed a bit, but workers are still progressing and keeping pace with inflation.
- Right now, the employment-to-population ratio (the percentage of adult Americans who are working) is the highest it’s been since 2001.
Elise agrees that the report is “good for workers”:
- There are some things we need to watch, but when we have job growth over 200,000 it’s a positive sign.
- Echoing Alicia’s employment-to-population ratio point, prime age employment-to-population ratio and women’s prime age employment-to-population ratio are in very good shape, with the latter reaching a record high.
- On the negative side, we need to pay attention to the rise in Black unemployment, and young adult unemployment. Both also saw an increase last month.
- We also need to wait for the inflation report to be released to see if these wages are still beating inflation.
Seth made the panel’s “good for workers” verdict unanimous:
- Wages are rising faster than the inflation rate, so workers are doing better.
- Jobs were created not just in low-wage industries, but also in middle class jobs like construction.
- Labor force participation numbers remain strong. We are continuing to see new people coming into the labor force to secure well-paying jobs.
- In the Obama administration, we would have touted this month’s numbers as an incredible success story.
- Part of the problem is the way the press has been writing about this economy. “They write as though workers are holding onto the edge of a cliff with their fingernails.” “We see these stories where the words ‘recession’ and ‘inflation’ appear more than ‘jobs’ and ‘real wages,’” he said.
STATISTIC OF THE DAY
Elise opens the segment to highlight three key statistics of the day:
- Public sector employment saw the second highest gain in this month’s data; adding 60,000 jobs in June. This increase put a serious dent in the deficit that’s been steady for a while.
- Women’s 25 to 54 year old employment-to-population ratio is at historically high levels.
- On the flip side, the Black unemployment rate is very concerning. But one thing to note is that there is a lot of volatility in the survey, so we don’t want to read too much into one month’s numbers. However, if there is going to be an employment downturn, these historically disadvantaged workers and young workers are going to be the “canary in the coal mine,” — that is, they will be the first to experience it.
Alicia follows up with her two statistics of the day:
- Teen employment — this is the time of year when young people are seeking jobs. We need to keep an eye on black and Hispanic teens relative to white teens. We saw a much larger increase in unemployment for black teens (11.7% to 15.6%) compared to Hispanics (less than 1%) and white teens (even less). “Even if it’s a strong labor market right now, it’s not a rising tide that lifts all boats equally,” said Modestino.
- The quit rate from BLS’s JOLTS report has fallen to where we were pre-pandemic, particularly for industries like hospitality and retail. This suggests a sense from both workers and employers that we’re not sure what’s around the corner so people are staying put.
Seth concluded the segment with two final key statistics of the day:
- This month, the number of workers who are not in the labor force but would like to work went down slightly. This figure had bumped up in May, so the June decrease suggests that some workers may have abandoned their job hunts.The number of workers who are working part time involuntarily went up by 452k. This suggests softening demand among employers for full time workers — that is, employers are not able to or willing to give those full-time hours to workers. When we explore whether demand from employers can be matched by supply from workers, these are the figures that we want to look at. And right now these numbers may be signaling that demand for workers is slowing down.
Does This Increase or Decrease Worker Power?
Alicia starts off with her opinion:
- We need to take a step back from the month-to-month reports and look at the bigger picture to assess worker power. A paper recently published by David Autor and Arin Dube explored what bottom-line wage increase and increase in overall employment increases does to income inequality. There has been a tremendous increase in income inequality since the 1980s. That trend has been partially reversed and that’s a sign of increased worker power.
- This paper suggests that at least one-quarter of that inequality has been reversed over the last two years. So, how can we sustain that/maintain that shift? We have a way to go, but recent numbers make me optimistic, and we’ve seen a tremendous boost in worker power over the past two years.
Elise offers her thoughts:
- Worker leverage is not as strong as a year ago, but it is still fairly strong, especially for low-wage workers.
- Continued wage growth is promising
- But there are concerns:
- e.g. we haven’t done anything policy-wise to lock in some of these changes; thus workers might feel insecurity even if they have more leverage
- Also wage levels are still incredibly low
Seth closed out this discussion with his take:
- For right now, worker power remains quite strong
- Measure of worker power is whether it delivers results for workers. We are seeing real results.
- Wages are up, including real wages, and that’s a tangible measure of worker power.
- Workers are able to quit their jobs and find better jobs. That’s another measure of worker power.
- We’re also not seeing significant increases in layoffs or an increase in people filing for unemployment. That’s a contributor to workers' power.
- But we’re going to get a clearer picture of worker power this month when the Teamsters do or do not settle with UPS.
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