By: Jade Gardener
On March 21 Aida Munoz, 28, of the Bronx rejoined the job market. The single mother of an elementary aged boy, Ms. Munoz considered herself under employed. As a member of the local metal lather unit 46, Munoz is now not only employed full time but also now a woman in the male dominated construction industry and has job security as part of a union. Aida’s job is apart the nearly 200,000 jobs estimated to have hit the job market this March. Economists believe that this rise in jobs will congruently result in the growth of the labor market.
Overall most economists anticipate a conservative drop in the unemployment rate. “There are now more jobs and people are being hired. So we will see labor participation rates go up,” said Steve Blitz, chief economist at ITG Investment Research. However, Blitz would consider the fortune of Ms. Munoz rather rare. Although, there are more jobs being added, unfortunately it is in the low wage sector. Ms. Munoz’s hiring in the construction sector is a positive sign for Blitz, as he believes, these jobs provide higher wages to their employees and employees with transfer this income back into the economy.
The average low wage worker is employed by a store or fast food restaurant. These workers in New York make nine dollars an hour compared to the now little below fifty dollars Ms. Munoz now makes. This disparity between the low wage and the middle class wage earned is draws a distinct line in the sand allotting financial freedom to only one group.
There is plenty of data about the once unemployed to now employed to be referenced, however there are some discouraged workers missing from the data. Elise Gould, Economist at the Economic Policy Institute, encourages us to look closer at the data. The new numbers on labor participation will contain data on what are known as missing workers. These workers have for various reasons not actively looked for a job for 4 weeks to up to a year. The newest unemployment numbers will reveal these missing workers as a subset of the discouraged workers often a heavy concern with unemployment numbers.
Gould reveals that if these missing workers return to the labor market then that is one of the strongest signs that the economy is improving. Gould however reveals, that the labor force rate has actually begun to bottom out creating an environment where millennials and those fifty and over are competing in the low wage space. As a result there are more employees than employers and this shift make employers more powerful. This power and base minimum wage, according to Gould creates competition where maturity and experience win out. Gould further points out that the increase in the labor force that we will see will be about 2.2%, but this in itself is not enough for the FED to be encouraged.
As a result of the slow growth in participation in the labor market all economist consulted believe that that FED will delay raising interest rates in April or May.
This minor growth may appear as a scary sign that the economy is headed backwards. Robert Hughes, Senior Research Fellow at the American Institute of Economic Research, believes this disposition however, is all for nothing. Hughes states”, since the recovery started in 2008, it may appear that job growth is flattening out. This is because the economy can’t keep growing at such a high rate. It appears as though we are losing steam because numbers are pacing closer to what makes for full employment in this climate.”