Today’s jobs report was almost all good news. The economy added 211,000 jobs, which is a huge improvement over the dismal numbers in March. Jared Bernstein summarizes the rest.
The overall jobless rate, at 4.4%, is the lowest since May 2007; the underemployment rate, at 8.6%, is about at the level I consider to be consistent with full employment. Long-term unemployment–which was very highly elevated throughout earlier years of this recovery–is back down to about 1 percent of the labor force; that’s the lowest since May 2008 and almost back to its pre-recessionary low point. The number of involuntary part-timers–the group that, along with the unemployed, drives the underemployment rate–is down almost 4 million from its peak.
The only caveat is that the Labor Force Participation Rate remains relatively low, but that is likely a result of aging demographics, more young people attending college and the secondary impact of mass incarceration.
What this suggests is that, when it comes to jobs, we are pretty close to where things were prior to the Great Recession. That is why, while I appreciated a lot of what Kevin Drum wrote earlier this week about Democratic messaging to the so-called “Obama-Trump voters,” I think he chose the wrong focus.
What should Democrats do about it? Here’s my take: above all, these folks want steady, secure jobs. Health care is great. Free college is great. Childcare is great. All that stuff is great, but it’s not fundamentally what drives the votes of these party switchers. What they want to hear about is jobs.
Perhaps he’s right and what these voters want to hear about is jobs. But the truth is that we’re now back to the issue that was affecting working Americans prior to the recession – stagnant wages and a proliferation of low-wage jobs, which drives income inequality. While more jobs are supposed to put upward pressure on wages, that assumption has been tested recently and isn’t providing the boost that it used to.
Democratic responses to the problem of wage stagnation have traditionally been:
- Raise the minimum wage
- Enhance collective bargaining power
- Fund higher-wage jobs via things like infrastructure spending
These are the kinds of things that need to be brought to the fore right now – along with any other pragmatic ideas about how to boost wage growth, like apprenticeships, access to technical training and debt-free college. It is important to remind voters that it was President Obama who implemented a rule that would have boosted the overtime pay of millions of hourly wage earners, while Republicans challenged it in court and the Trump administration let it die by refusing to defend it.
It’s not that Democrats haven’t been talking about these issues. But as we approach what economists call “full employment,” it’s time to get ahead of the curve and make wages the priority.
The one caveat I’ll add is that this is the case unless/until Trump and Republicans do something stupid to tank the economy – which is certainly not out of the question. Then it would be back to jobs, jobs, jobs.