Tags: Wilson | unemployment | underemployment | wages

EPI's Wilson: Unemployment, Underemployment Pressure Wages

By    |   Wednesday, 19 November 2014 09:40 AM

Many economists have waxed enthusiastic about the labor market, as non-farm payrolls have risen more than 200,000 for nine straight months, the longest streak since 1995.

But trouble lurks beneath the surface.

The number of Americans tied to part-time jobs that they don't want totals almost 7 million, The Wall Street Journal reports. And while, unemployment has dropped to a six-year low of 5.8 percent, that still means that more than one in 20 Americans actively seeking a job can't find one.

Meanwhile, the Economic Policy Institute (EPI) says another 6.3 million "missing workers" aren't being counted as unemployed.

"These are people who would either be working or looking for work, and thus counted in official labor market stats, if job opportunities were stronger," Valerie Wilson, director of the EPI's program on race, ethnicity and the economy, tells CNBC.

"Beyond employment, another factor at play in the public's perception of how they are or are not experiencing the recovery is stagnant wage growth," she notes.

"The fact that there are so many unemployed and underemployed is one of the factors in why wages have not grown in this recovery. With so many still looking for work, there's little pressure on employers to bid up wages to get and keep the workers they need."

Average hourly wages rose only 2 percent in the 12 months through October.

Some of the labor market problems may last a long time.

"The situation of so-called involuntary part-time workers — those who would prefer to work more than 34 hours a week — has economists puzzling over whether a higher level of part-time employment might be a permanent legacy of the Great Recession," writes Journal reporter Nick Timiraos.

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Many economists have waxed enthusiastic about the labor market, as non-farm payrolls have risen more than 200,000 for nine straight months, the longest streak since 1995.
Wilson, unemployment, underemployment, wages
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2014-40-19
Wednesday, 19 November 2014 09:40 AM
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