The April jobs report – 215,000 jobs added in March, with official unemployment ticking up to 5 percent – shows an economy enjoying its 73rd straight month of private sector jobs growth. The U.S. recovery is the best among developed countries.
But workers still see little benefit. Wage growth continues to disappoint – with average hourly wages up for the month, but only up 2.3 percent over the past year.
Wages remain disappointing because employers still don’t see the need to lift them to attract or keep workers. Nearly 16 million workers are still in need of full-time work. The workforce participation rate is at 63 percent, “little changed” from the previous month. For those 25-54, the rate remains at levels not seen since the 1970s, when women started entering the labor force in larger numbers. The percentage of the population that is employed or looking for work is mired at a disappointing 59.9 percent.
The U.S. economy continues to grow despite facing rising adverse tides. As Federal Reserve Chair Janet Yellen summarized while reporting the Fed would slow its plans to raise interest rates, the economy is “restrained” by “weak foreign activity,” dollar appreciation, a slow pace of household formation that depresses homebuilding, and weak productivity growth. Translated, this means, China is in trouble, Europe is stagnant; U.S. trade deficits are going back up as countries run their currencies down hoping to export their way out of trouble; young adults laden with college debts or lousy jobs aren’t getting married and buying homes. Companies aren’t investing; they are taking on debt, buying back stock to boost prices and bonuses.
We experienced jobs growth in retail trade, construction and health care, but lost manufacturing jobs again last month (down 29,000). The economy keeps getting better, but most Americans don’t experience it.
There is no way out in the current arrangement. Interest rates are near zero across the world, with some 40 percent of the world's gross domestic product in countries with negative interest rates (including Europe and Japan). The U.S. is faring the best in the developed world, but the only raise workers experience is from the decline in gas and energy prices.
As Nobel Prize winner Joseph Stiglitz puts it, "The American economy is a failed economy," he said. "We have to once again rewrite the rules of the economy for the 21st century." That means breaking up the big banks, cracking down on perverse CEO pay policies, lifting the floor under workers, reviving worker rights to organize, reviving antitrust enforcement to go after monopolies, cleaning out our politics. It requires a large-scale investment in rebuilding our decrepit infrastructure, providing world-class education to our children, leading the green industrial revolution. It requires balanced trade policies that curb the hemorrhaging of good jobs. It requires comprehensive immigration reform that brings millions out of the exploitation of the shadow economy.
The U.S. is rich enough to insure everyone has a basic right to health care, to a living wage, to family and parental leave, to public education from pre-k through college. But we can’t get there without taking on the perverse levels of inequality we now see, and without fixing the rules that have been rigged to benefit the few.
Stiglitz says, “Bernie Sanders is right about that.” It will take an agenda as ambitious as Sanders – the ideas scorned as “pie in the sky” by Hillary Clinton – to make this economy work for working people once more. The current presidential campaign has opened that argument. What’s clear is we won’t see our way out of this hole without the political revolution necessary for that argument to rule.