Below, EPI economists offer their initial insights on the October jobs report released this morning. After disappointing job growth numbers in August and September, a solid 531,000 jobs were added in October.

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Over the last couple of months, the resurgence of the Delta variant has made it abundantly clear that the ebbs and flows of the pandemic continue to exert powerful effects on the labor market. After increasing, on average, over 1 million jobs in June and July, job growth slowed to less than 300,000, on average, for August and September. While COVID-19 caseloads have slowed between September and October, they continue to be higher than experienced in June and July, suggesting that we will see a mild improvement—not a huge windfall—when the latest employment data are released on Friday.

For the reference week of the October jobs data, average daily COVID-19 caseloads stood at 78,987. This is a significant (43.5%) improvement over the average daily COVID-19 caseloads during the September reference week: 139,920. All else equal, this should translate into economic growth, as workers begin to feel it is safer to resume in-person job search and employment and consumers become more willing to purchase in-person services. The decline in October COVID-19 caseloads, however, does not mean we are back to the levels earlier in the summer. October’s levels were over twice as high as the average daily caseloads during the reference week in July (33,711 cases).

Similarly, OpenTable shows mild improvement in restaurant customers between September’s and October’s reference weeks. While seated diners in September were down 12.6% compared with the same week in 2019, the number of diners was down 8.4% in October. Although the 8.4% drop in seating relative to the pre-pandemic period is less than what we saw in September, it is still not as promising as the smaller 5.7% drop in July’s reference week compared to July 2019. This likely means the October labor market did not see the kind of growth we experienced in June or July, but some improvement from the disappointing September level is likely.

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In previous work, Adam Hersh highlighted how the Infrastructure Investment and Jobs Act (IIJA) and the Build Back Better Act (BBBA) could provide a backstop against the possibility that economic growth slows due to slack in aggregate demand for goods and services in the next couple of years. Over the past few months, a pronounced uptick in inflation convinced far too many that the U.S. economy actually faced the opposite problem of macroeconomic overheating—an excess of aggregate demand.

But late last week, the Bureau of Economic Analysis (BEA) released data making it clear that the U.S. economy is not overheating and that aggregate demand support in 2022 and 2023 could be vital to continued economic growth. Given this, the macroeconomic boost provided by the BBBA in coming years could be valuable indeed.

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This week, researchers at the Federal Reserve Bank of Minneapolis released two analyses of the economic impact of several recent increases in the separate citywide minimum wages in Minneapolis and Saint Paul. The authors of the two separate, but linked, analyses interpret their findings as suggesting that the series of minimum wage increases reduced employment in the Twin Cities, but this conclusion is not supported even by the results presented in their own reports. 

The data and methodology used in the study are simply not sufficient to distinguish between the effects of the minimum wage increases and other changes in employment happening around the same time. Even more problematic are the studies’ unsuccessful attempts to estimate effects through 2020, when the study’s methodology is unable to separate the effects of the minimum wage from the devastating impact of the pandemic on the two cities’ service-sector workforces. In fact, the studies’ findings implausibly suggest that the entire decline in restaurant employment during the pandemic is due to the minimum wage increases, as opposed to lockdowns, curfews, and pandemic-related declines in consumer spending on eating out.

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October 21 is Latina Equal Pay Day. Last year, a typical Latina worker who worked full-time, year-round earned only 57 cents for every dollar earned by white, non-Hispanic men. This means that Latinas on average must work nearly 22 months to earn what white, non-Hispanic men earn in 12 months.

The infographics below take a closer look at average hourly wages of Latinas and non-Hispanic white men employed in major occupations at the center of national efforts to address COVID-19, based on our previous analysis of Current Population Survey data from 2014-2019. These occupations include front-line workers in health care and essential businesses like grocery stores, those who have borne the brunt of job losses in the restaurant industry, and teachers and child care workers. We found that Latina workers make between 6% to 32% less than non-Hispanic white men in these occupations.

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Congress may have bought itself another month to negotiate over the Biden-Harris administration’s Build Back Better (BBB) agenda, but one thing is clear: Further reducing the scale and scope of the budget reconciliation package unequivocally means the legislation will support far fewer jobs and deliver fewer benefits to lift up working families and boost the economy as a whole.

How much will such compromise cost the U.S. economy? We crunched the numbers to find out what compromising on the BBB plan will mean for every state and congressional district in the United States. If the budget reconciliation package is cut from $3.5 trillion to $1.5 trillion—as Sen. Joe Manchin (D-W.V.) has called for—nearly 2 million fewer jobs per year would be supported.

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On Friday, the Bureau of Labor Statistics (BLS) will release September’s numbers on the state of the U.S. labor market. August employment growth came in lower than June or July due in part to the Delta variant spreading quickly. Another sign of weakness in the August job report was the rise of Black unemployment, which remains significantly higher than other groups. The August jobs report showed us, once again, just how much the ebbs and flows of the pandemic are the dominant influence by far on trends in the labor market.

This pronounced August slowdown also came after more than half of all states prematurely ended the pandemic unemployment insurance (UI) programs. All of the pandemic programs ended in early September.

While no longer accelerating, COVID-19 caseloads were still high in mid-September compared with the early summer months, so that may once again slow the recovery. In this jobs report, one indicator I’m going to be paying close attention to is public-sector employment, specifically public-sector education employment.

Overall government employment is still down 790,000 jobs since February 2020—the third largest employment deficit in any economic sector—but this shortfall is entirely in state and local employment and much of those losses were in education employment. Local education employment—think the public K-12 school system—cratered in the spring of 2020, experiencing losses in excess of those suffered in the Great Recession and, as of mid-August, remained 219,600 short of its pre-pandemic level.

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In a political system beset by many stupid and destructive institutions, the statutory limit on federal debt might be the worst. The debt limit:

• Measures no coherent economic value. The measure of debt it targets is not inflation-adjusted, would perversely make the debt situation look worse if there was a reform to Social Security that closed that program’s long-run actuarial imbalance, and ignores trillions of dollars in assets held by the federal government.
• Has no relationship to any economic stressor facing the country. Over the past 25 years, as the nominal federal debt rose from $5 trillion to $22.7 trillion, debt service payments (required interest payments on debt) shrank almost in half, from 3.0% of GDP to 1.8%.
• Can cause real damage if it’s not lifted in the next couple of weeks. It would only take a couple of months of missing federal payments due to the debt ceiling to mechanically send the economy into recession—and that’s without assessing damage it would cause from financial market fallouts.
• Has been used time and time again to enforce misguided austerity policies. The 2011 Budget Control Act (BCA) grew directly out of a GOP Congress threatening to not raise the debt ceiling absent spending cuts. The BCA provided an anti-stimulus about twice as large as the stimulus provided by the American Recovery and Reinvestment Act (ARRA—commonly known as “The Recovery Act”) and is largely responsible for the sluggish recovery from the Great Recession.

Given all of this, the debt ceiling should be abolished or neutralized in absolutely any way politically possible. It serves no good economic purpose and plenty of malign ones. Below we expand on these points.

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According to a new report released yesterday from the Bureau of Labor Statistics (BLS), just over three-quarters (77%) of private-sector workers in the United States have the ability to earn paid sick time at work. But, as shown in Figure A below, access to paid sick days is vastly unequal, disproportionately denying workers at the bottom this important security. The highest wage workers (top 10%) are nearly three times as likely to have access to paid sick leave as the lowest paid workers (bottom 10%). Whereas 95% of the highest wage workers had access to paid sick days, only 33% of the lowest paid workers are able to earn paid sick days.

Low-wage workers are also more likely to be found in occupations where they have contact with the public—think early care and education workers, home health aides, restaurant workers, and food processors. Workers shouldn’t have to decide between staying home from work to care for themselves or their dependents and paying rent or putting food on the table. But that is the situation our policymakers have put workers in. Meaningful paid sick leave legislation is incredibly important for low-wage workers and their families and important to reduce the spread of illness. At the same time, access to paid sick days has positive benefits to employers as it reduces employee turnover with no impact on employment. 

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Congress and the Biden-Harris White House have let expanded unemployment benefits expire in the middle of the ongoing COVID-19 pandemic, even while employment is still well below pre-pandemic levels. As a result, annual incomes across the U.S. will fall by $144.3 billion and annualized consumer spending will drop by $79.2 billion, according to the best available evidence on the effects of recent unemployment benefit cuts.

In March 2020, as the economic impact of the pandemic spread quickly, Congress critically expanded unemployment insurance (UI) benefits by providing $600 (and later, $300) monthly supplements, extending benefit periods, and making previously excluded workers—such as independent contractors and those with low incomes—eligible for UI.

However, about half of states prematurely terminated these programs between June and late July 2021, and then, by letting the federal law expire in September, Congress and the White House cut off pandemic UI entirely. In total, more than 10 million workers lost all of their unemployment benefits because of either the state-level program terminations or the September program expiration.Read more

The Census Bureau report on income, poverty, and health insurance coverage in 2020 reveals an expected shock to median household income relative to 2019 resulting from the COVID-19 pandemic and recession. Across all racial and ethnic groups, median household income either declined or was statistically unchanged from the previous year.

While Census cautions that the 2020 income estimates may be overstated due to a decline in response rates for the survey administered in March of this year, real median income declined 4.5% among Asian households (from $99,400 to $94,903), 2.6% among Hispanic households (from $56,814 to $55,321), 2.7% among non-Hispanic white households (from $77,007 to $74,912), and was statistically unchanged for Black households (from $46,648 to $46,600) as seen in Figure A.

In 2019, Black American households finally surpassed the median income peak they achieved prior to the Great Recession of 2008-2009. In 2020, however, the pandemic recession cut that long recovery short.

In 2020, the median Black household earned just 61 cents for every dollar of income the median white household earned (unchanged from 2019), while the median Hispanic household earned 74 cents (unchanged from 2019).

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Increasing income inequality has been at the forefront of economic policy conversations in the United States since at least the 2008 financial crisis. The roots of that inequality stretch back much further, though. Growing employer opposition to unions and the shift from manufacturing toward finance as a major growth industry over many decades has resulted in a separation between worker pay and productivity that has persisted to this day.

There has been growing concern about the wage stagnation faced by the typical American worker, and increasing attention paid to the need to rectify this—to ensure that workers reap the gains associated with their increased productivity.

However, there has not been as much attention paid to the distinct divisions that exist even among the generally undercompensated working class. While the typical worker has not seen their fair share of wage increases relative to the increase in productivity over the past 40 years, Black and Hispanic workers saw even smaller wage gains relative to their white counterparts.

These racial disparities in pay add another dimension to conversations about gaps between pay and productivity, and about income inequality in general. While policies designed to link the typical worker’s pay more closely with productivity are necessary to reduce income inequality overall, the persistence of disparities even within the working class shows us that targeted policies will be required in addition if we want to achieve the goal of true equity across the board.Read more

A path to citizenship for unauthorized immigrants is not “merely incidental” to the American economy—it’s primarily intended to provide labor and political rights and create the positive economic gains that come with it.

That’s why the Senate parliamentarian should rule to include immigration reform in the current $3.5 trillion budget resolution, which aims to provide a pathway to citizenship for many of the current unauthorized immigrants residing in the United States.

The Senate parliamentarian heard arguments about the inclusion of a pathway to citizenship from Democratic legislators on Friday, and on the same day, the House Judiciary Committee posted its version of the immigration provisions for the budget resolution. The following Monday, the Judiciary Committee voted to approve the immigration language, allowing it to be included in the overall budget resolution. Included in it are provisions that would put immigrant Dreamers, Temporary Protected Status and Deferred Enforced Departure recipients, farmworkers and certain workers deemed to have been employed in “essential” occupations during the pandemic onto a path to citizenship, as well as recapture unused immigrant visas from prior years, among other reforms.

Using reconciliation to pass these reforms would allow the Democrats to bypass Senate Republicans using the filibuster to prevent the legislation from passing. The Democrats’ budget resolution is an essential piece of legislation that must pass: It has the potential to make historic improvements in bolstering the social safety net, fighting climate change, and creating jobs. However, if it leaves millions of unauthorized immigrants without the civil, human, and workplace rights they would gain if they had a path to citizenship, the plan would fail to achieve its full potential.

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Even in normal times, public safety net spending and social insurance programs are effective policy tools to reduce poverty and alleviate the economic distress of families. Census data released today also show that these programs kept tens of millions of people from severe economic deprivation during the first half of the ongoing COVID-19 pandemic. Remarkably, poverty rates were significantly lower last year than they were in 2019, after accounting for the scale of public assistance provided in 2020.

The poverty rate reduction highlights how much poverty the nation and its policymakers tolerate is a choice. It should not have taken a pandemic to make us realize this.

Last year, Economic Impact Payments (stimulus checks) and unemployment insurance (UI) benefits played larger than usual roles in reducing poverty. The Census Supplemental Poverty Measure (SPM) data show that the first two Economic Impact Payments and UI benefits reduced poverty by 11.7 and 5.5 million people, respectively (see Figure A).

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This morning, the Census Bureau released its report on income, poverty, and health insurance for 2020. These data provide insights into the effects of the COVID-19 pandemic on earnings and incomes as well as the vital measures put in place to reduce economic insecurity during the steep economic downturn.

Median household income fell 2.9% as millions lost their jobs and poverty rose by 1.0 percentage point. The losses to income and increases in poverty would have been far worse if not for the rapid and large boosts to vital safety net programs legislated by Congress in 2020. The stimulus payments moved 11.7 million people out of poverty and unemployment insurance—expanded in 2020—lifted 5.5 million out of poverty in 2020.

Overall, median earnings for full-time workers rose 6.9% largely in response to a composition shift in who was more able to retain employment (and who did not). Since a disproportionate share of workers who lost their jobs were lower paid, the remaining workers in the economy are higher paid, on average, leading to a mechanical increase in earnings. This does not reflect an increase in living standards for those working, rather it’s just a quirk of arithmetic.

Here are some key takeaways from the 2020 report.

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Below, EPI senior economist Elise Gould offers her initial insights on today’s release of the Jobs and Labor Turnover Survey (JOLTS) for July. Read the full Twitter thread here. 

Hires ticked down slightly in July but remains up 645k since May. Total separations rose for two months running due to an increase in both layoffs and quits. Quits are high by historical standards as workers may be concerned about rising covid cases or are finding better jobs. pic.twitter.com/H1likO3kS6

— Elise Gould (@eliselgould) September 8, 2021

Using the last three months of data by sector to smooth data volatility, it’s clear that there are still many sectors with more unemployed workers than job openings. To be clear, these comparisons only include those who are in the official measure of unemployment. pic.twitter.com/r6C1aR3NX1

— Elise Gould (@eliselgould) September 8, 2021

#JOLTS provides a different picture of the labor market, with its data on job openings, hires, quits, and layoffs, but it is decidedly a bit out of date as fast changing as the recovery and pandemic has been the last year and a half. https://t.co/zBNnd11mGR

— Elise Gould (@eliselgould) September 8, 2021

Below, EPI economists offer their initial insights on the August jobs report released this morning, which showed an increase of 235,000 jobs—a notable slowdown from June and July.

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The growth of inequalities is the central driver of the widening gap between the hourly compensation of a typical (median) worker and productivity—the income generated per hour of work—in recent decades. Specifically, this growing divergence has been driven by the growth of two distinct dimensions of inequality: the surge of compensation received by the top 10%—particularly the top 1.0% and top 0.1%—and the erosion of labor’s share of income and the corresponding growth of capital’s share. This post documents these trends by presenting an updated account of the U.S. productivity-pay divergence originally analyzed in both Mishel and Gee 2012 and Bivens and Mishel 2015. 

The key metric, as explained below, is the lag between the growth of net productivity (taking into account depreciation and evaluated using consumer prices) and hourly compensation (wages and benefits) of a typical or median worker. Between 1979 and 2019, net productivity grew 59.7% while a typical (median) worker’s compensation grew by 15.8%, a 43.9 percentage point divergence driven by inequality. The effects have been felt broadly: During this period, 90% of U.S. workers experienced wage growth (26%) far slower than the economywide average, while workers in the top 1% (mostly highly credentialed professionals and corporate managers) saw 160% wage growth (Mishel and Kandra 2020) and owners of capital reaped large rewards made possible only by this anemic wage growth for the bottom 90%.

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While the official pandemic recession ended two months after it began, it is clear that the pandemic is not behind us and its ebbs and flows exert powerful effects on economic growth. The seven-day moving average of U.S. COVID-19 cases rose more than fivefold, from 24,000 per day to 126,000 per day between July 12 and August 12, 2021, roughly representing the reference period for each month’s labor market report. The economic effects of this surge will likely be reflected in the jobs numbers we receive on Friday as segments of the U.S. workforce still face health and safety risks of continuing to work in person. This emphasizes the importance of continuing to provide a safety net for workers and their families—including by keeping in place federal pandemic unemployment insurance (UI) benefits—as health and safety-related closures and protective measures are reinstated.

While the job growth numbers in June and July (938,000 and 943,000, respectively) provided strong evidence that the labor market is revving back up in response to fiscal stimulus and widespread vaccinations, it is likely that the August job growth numbers may be more muted. The fivefold increase in COVID-19 cases is likely one of the reasons that restaurant seating appears to have softened between July and August.

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Unions across the country are working on doing what’s right for society and their members when it comes to COVID-19 vaccine mandates. But there has been some misplaced criticism directed toward unions, especially public-sector unions who engage in “impact bargaining” with their employer over COVID-19 vaccine mandates.

To put it all in perspective, Dave Kamper, senior state policy coordinator for the Economic Analysis and Research Network (EARN) at the Economic Policy Institute, took to social media to break down the mandate issue and also to explain how impact bargaining isn’t about refusing to follow mandates, but about how changes are implemented and how they impact working conditions.

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Thousands are expected this week in the forested hills of southern West Virginia to commemorate the 100th anniversary of the Battle of Blair Mountain—a key conflict in labor history.

In the late summer of 1921, at least 7,000 coal miners affiliated with the United Mine Workers of America (UMWA) fought for their rights and their livelihoods in a weeklong fight against a private army that was raised by the coal companies and supported by the National Guard and the U.S. Army Air Force. The battle was the climax of two decades of low-intensity warfare across the coalfields of Appalachia, and it remains the largest battle on U.S. soil since the end of the Civil War.

The battle is also a stark reminder of the importance of protecting workers’ right to organize. It’s not simply about balancing the economic scales; it’s about power. When workers do not have power—when they have no voice in their workplace and no voice in how the nation is governed—exploitation and violence by the state are the inevitable result.

Today, workers still face a lack of power. A great way to empower workers would be through passing the Protecting the Right to Organize (PRO) Act, which is currently being considered by Congress and was renamed after former UMWA President Richard Trumka following his passing earlier this month. The story of the Battle of Blair Mountain demonstrates how, a hundred years on, workers are at the mercy of the powerful unless they have unions and power of their own.

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The July state employment and unemployment data released Friday by the Bureau of Labor Statistics (BLS) showed that the strong job growth reported earlier this month in the national jobs data was widespread throughout the country. And, notably, the states that chose not to cut pandemic unemployment insurance (UI) benefits have experienced, on average, greater job growth in recent months than states that cut benefits to unemployed workers. 

Over the last three months (from April to July), all but three states—Alaska, Kentucky, and Wyoming—added jobs, with particularly strong growth in Hawaii (4.0%), Vermont (3.5%), North Carolina (2.7%), Arizona (2.6%), and New Mexico (2.5%). Figure A shows each state’s July unemployment rate and the change in employment over the past three months, 12 months, and since February 2020 (the month before the recession.) 

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The labor movement lost a giant last week. Richard Trumka was a champion for workers’ rights and a passionate leader of the labor movement. In addition to serving as President of the AFL-CIO, Trumka served as Chairman of EPI’s board of directors since 2012. Under President Trumka’s leadership, EPI and AFL-CIO have shared an unwavering commitment to advancing workers’ rights and strengthening unions.

For President Trumka, “the next frontier” for U.S. workers was the Protecting the Right to Organize (PRO) Act. Passing the PRO Act would restore workers’ ability to organize with their co-workers and would allow them to negotiate for better pay, benefits, and fairness on the job. Passing the PRO Act would also promote greater racial economic justice because unions and collective bargaining help shrink the Black–white wage gap.

Every day, corporations openly bust unions and retaliate against working people without consequence. President Trumka spent his career fighting these attacks on working people’s right to organize and collectively bargain. We need meaningful policy changes to restore a fair balance of power between workers and employers. That is why Congress must pass the PRO Act.

As President Trumka said on June 29, “the single best agent for change is the PRO Act.” We at EPI will honor his memory by continuing to advance policies like the PRO Act that are critical to workers and a fair economy.