Let’s get straight to it: the U.S. economy’s jobs situation is not as rosy as mainstream narratives suggest. Today’s Monthly Payroll Report from the Bureau of Labor Statistics (BLS) highlights a disconcerting trend: a shrinking full-time workforce despite bullish headlines.
The Troubling Divergence
The discrepancy between jobs and employment has been continuing for seven months now. While the unemployment rate hovered at a low 3.5% last month, it increased slightly today. But this noise veils an unsettling reality: Full-time employment is down 572,000 since May, whereas nonfarm payrolls have increased by over 2.4 million since March. This contradicts the belief that the labor market is tightening in favor of workers.
The discrepancy is not marginal; it’s massive. A study by the Economic Policy Institute showed that 53.7% of underemployed workers were searching for full-time jobs but could only find part-time work, suggesting that the labor market may not be as healthy as the government claims.
A Tale of Two Metrics
There are two main ways to measure employment—through the Establishment Survey and the Household Survey. According to the latest BLS report, nonfarm payrolls increased by 261,000 to 153,308,000 as per the Establishment Survey. On the other hand, employment as gauged by the Household Survey fell by 328,000 to 158,608,000. Both can’t be right at the same time.
James Sherk, a Research Fellow in Labor Economics at The Heritage Foundation, has pointed out that the Household Survey is generally more accurate for capturing small business hiring and self-employed workers. In a labor market as complex as the United States, this disparity raises questions.
Part-Time Jobs: The New Normal?
The numbers on part-time work tell a concerning story. Voluntary part-time work has increased by 41,000, but involuntary part-time work has decreased by 183,000. Does this mean that people are opting for part-time work willingly? Not necessarily. In the context of an economy where full-time work has been declining, these figures may imply that people are settling for part-time work because they can’t find full-time positions.
A study published in the Journal of Labor Economics found that “underemployment” affects future career paths, often trapping individuals in a cycle of low-wage, unstable jobs.
Wage Stagnation Despite Headline Gains
At face value, wages seem to be doing well. Average hourly earnings for all nonfarm workers rose by $0.12 to $32.58. That’s a 4.7% increase from a year ago. However, when you factor in inflation, which according to the U.S. Inflation Calculator has been about 5.4% for the past year, real wages have actually decreased.
This is not just an American phenomenon. The International Labour Organization (ILO) released a report stating that wage stagnation is a global problem, affecting developed and developing countries alike.
Retirement, Not by Choice
There’s another hidden component: forced retirement. Many of those who are leaving the job market are not doing so willingly. A study by ProPublica found that over half of older U.S. workers are pushed out of longtime jobs before they choose to retire, substantially affecting their financial stability and adding hidden pressures to the employment data.
What Lies Ahead
The signs point to an economy resting on shaky grounds. While the stock market might be soaring, employment, a key indicator of economic health, is teetering. We must consider the real dynamics at play rather than rest easy with flashy headlines about job growth.
Final Take
This is no time for complacency. As we look ahead, it’s important to question the employment data presented and dig deeper into what it signifies for the everyday American. The statistics may be buoyed by part-time jobs and disguised by manipulated metrics, but the reality remains that full-time employment is on a worrisome decline.
