Happy Headlines, Grim Reality: The Jobs Report for October 2021

After slow jobs growth in September, the government’s October survey of non-farm organizations showed that job totals increased by 531,000. That is close to the monthly average for the year. The household survey found that unemployment fell again, this time from 4.8% to 4.6%.  That’s close to what some mainstream economists consider virtually full employment. But there are problems with conventional definitions of overall unemployment. And there is plenty of evidence of pain in the Bureau of Labor Statistics’ standard numbers for specific populations. Official unemployment rates were 9.1% for disabled workers and 16.1% for Black teens. The white rate, the Asian rate, and the Latino rate were good to fair–at 4%, 4.2%, and 5.9%–but the rate for African Americans was still high at 7.9% 

As to the government’s underestimate of 4.6% for the national unemployment rate, the Full Count by the National Jobs for All Network (NJFAN) adds part-timers who want full-time work and people who want jobs but haven’t searched recently. The NJFAN Full Count shows that real unemployment was 10.6%–a far cry from full employment. And job growth may slow if the Federal Reserve trims its stimulus programs and if Biden’s reconciliation bill is not passed soon. 

The Myth of the ‘Spoiled’ Worker 

There are those who want to blame workers for high joblessness. In August (the latest numbers) there were 10 million job vacancies. And average pay, leaving aside inflation and purchasing power, is on the rise. Despite these encouraging conditions, quite a few people have not gone back to work. Many who have jobs are quitting–some for better jobs, others to go home and regroup, some to get better jobs. There’s a lot of churn in the labor force. And a lot of serious thinking by workers about what they want in a job. 

The horrors of the COVID plague and the shock of the pandemic recession caused workers to pause and reflect. For many years, there have been subterranean waves of working-class anger and resentment.  And those waves broke in the crises of the last year and a half. From on-line complaints and fairly high worker quit-rates, it is clear that millions of people do not want to return to lousy jobs. Lousy jobs mean low pay, low-to-no benefits, hard-to-find child care, arbitrary schedules, COVID threats, and autocratic bosses. Federal subsidies have helped people stay away from work, and the high number of job vacancies–what employers call a “labor shortage”–gives people confidence that they can find a job when they must have one. But high vacancies also lead employers to load more work onto their reduced staff (and themselves, too) and that must  increase job burnout and, eventually, add to quit rates.  

But more people are returning to work every month–and in most job sectors. In October, food services and drinking places added 119,000 jobs and retail trade added 35,000. Manufacturing counted 60,000 more jobs and construction 44,000. There were exceptions, notably in government work. Employment in state and local education programs fell by 65,000. I’d have thought that number would rise as schools got underway. The number of Postal Service employees fell by 2,400, whether as part of Postmaster General Louis DeJoy’s plan to cut the department, the service’s inability to find workers, or some statistical anomaly. 

Overall, job growth in October was okay, but we are nowhere near real full employment (RFE). We’ve a long way to go–perhaps seven million more jobs–just to get back to where we would now be if we’d continued the trend line of early 2020. And that would not be RFE as defined by NJFAN.

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Things to Watch For 

Will more workers return to work at a higher rate in the coming months, and will job vacancy rates fall?  I think the answer to both questions is affirmative. Clearly, in the United States the number of employed people is increasing all the time. 

-Will wage increases outpace inflation increases? It is not happening now. While hourly money wages in October were 6.9% above their level of a year ago, what you see is not what you get. After accounting for the effects of inflation, real pay for rank-and-file workers fell 1.1% over the last twelve months. If productivity is rising–and it is–employers need not raise prices so much. And if extra-high profit rates, especially for big companies, were limited, prices could moderate. Good luck with that.

-Will the Big Rethink have a lasting impact on the workplace itself? For example, in the future, will employees be more likely to quit their jobs than they were before the pandemic, as long as jobs are not really scarce and unemployment is not too high? 

-Will collective activity–strikes, informal job actions, unionization drives, and union membership–increase in the next few years?