American Jobs Picture is Bright

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The New York Sun

This week the Bureau of Labor Statistics will release employment information for the month of September, the last set of employment numbers before the election. The new BLS numbers, combined with a series of positive results from recent months, may put to rest the fading campaign theme of a “jobless recovery.”


Although accurate employment forecasts are rare, economists are expecting the economy to create another 150,000 payroll jobs and the unemployment rate to rise slightly to 5.5%.


Just last month the unemployment rate declined to 5.4% and the economy created another 144,000 jobs – making August the 12th straight month of job growth, with a total of 1.7 million new jobs created since August 2003.


Hurricanes Charley, Frances, and Ivan may influence the September employment numbers in an unpredictable fashion. Hurricane Ivan hit Florida and Louisiana just at the time the employment figures were being calculated, and could potentially result in 50,000 fewer jobs. On the other hand, Charley and Frances could have offsetting effects, as additional workers were employed repairing their damage.


Official measures of changes in employment in the United States are estimates subject to revision. BLS will also release this week preliminary changes to the April 2003 through March 2004 payroll jobs numbers. The revised estimates may show that total employment grew more over the past 18 months than had been previously recorded. New figures could bring this total closer to 2 million.


Although current estimates peg the beginning of the job recovery at August 2003, the new BLS numbers could also show that employment in the United States began increasing perhaps as early as April 2003. These changes would suggest that we are in a longer and more mature job recovery than previously believed.


Not only are more Americans working, but the unemployment rate – those seeking work but unable to find a job – is remaining at low levels. Unemployment is dropping across all age and educational attainment categories, and in all regions of the country. Whether a worker is in a low-skill, entry-level job or a high-skill, high paying job, there is more opportunity than ever before.


Naysayers will try to dismiss the good news by asserting that we are merely replacing high-wage manufacturing jobs with low-wage “service” positions. Never mind that many of the most highly compensated jobs in America are in such “service” sectors as medicine, finance, and law.


The pessimists will persist that 30 million Americans are stuck in low wage jobs without any prospect of upward mobility.


This oft-repeated fallacy is not only at odds with our country’s long history of creating abundant opportunities for upward mobility, it is also out of step with reality.


Workers in low-wage jobs migrate to higher-paying positions over time – especially if they are able to obtain training and education that prepare them for new opportunities. A 2001 study co-authored by Federal Reserve economist Bruce Fallick found that most workers who begin their post school careers in jobs that pay at or just above minimum wage quickly move into higher pay ranges within a few years.


In the current job recovery, we have witnessed a marked increase in employment in many industries that pay above-average wages. In the past 12 months, 191,000 jobs have been created in construction – a blue-collar field that pays higher than average wages and offers long-term career opportunities. In fact, employment in construction is now at its highest point in American history. Education and health services have added 367,000 jobs over the past 12 months and 1.6 million jobs since January 2001.


What about the claim that people who have transitioned to new jobs are getting paid less?


At all times, some individuals change jobs and receive lower compensation while others receive higher compensation. The government does not keep track of compensation for new jobs, but total average compensation – including wages, pensions and health benefits – has risen by 5.5% since the end of 2000. Job changers on average are likely to be doing better as well.


Evidence indicates that workers in America are doing well: low unemployment, job growth in high paying industries, rising compensation, and an economy that continues to welcome and provide opportunities for newcomers. The employment numbers show that these trends are real.



Mr. Furchtgott-Roth is a former FCC commissioner. He can be reached at hfr@furchtgott-roth.com.


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