Tags: Labor | participation | wage | gains

Low Labor Force Participation Helps Limit US Wage Gains

By    |   Monday, 09 February 2015 11:16 AM

Job growth is soaring, with non-farm payrolls rising more in the past three months than in any other similar period over the last 17 years.

But wages—not so much. They climbed only 1.7 percent last year and 2.2 percent in the 12 months through January.

One problem is that millions of Americans have stopped looking for work, economists say. The labor force participation hit a 36-year low of 62.7 percent last year and stood at only 62.9 percent in January.

Then there's shrinking union membership, Richard McGahey, an economist at the New School, tells International Business Times.

Finally, Richard Wolff, an economist at the University of Massachusetts, tells the news service, "There has been for the last 40 years, at least, a major relocation of capitalist enterprises out of the United States and into Latin America, Asia and elsewhere."

U.S. companies "just aren't interested in the American labor force the way they once were," he says.

The problem isn't a lack of available jobs. "America currently has 5 million vacancies waiting to be filled," writes Mike Cassidy of The Fiscal Times. "So where are these 5 million jobs hiding?"

What we have is a "disconnect—persistent unemployment and underemployment despite lots of vacancies," he says.

It's largely a matter of the field in which you're searching for a job. "Goods-producing construction and manufacturing sectors are the worst places to be looking for work," Cassidy states.

"By contrast, high-skill, white-collar sectors are doing quite well. In finance, there’s enough job openings for every job candidate." The difference is reflected in wages too, Cassidy explains. "Once again, the winners are high-skill sectors, such as information and finance."

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Finance
Job growth is soaring, with non-farm payrolls rising more in the past three months than in any other similar period over the last 17 years. But wages-not so much.
Labor, participation, wage, gains
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2015-16-09
Monday, 09 February 2015 11:16 AM
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