Missing economic ingredient: Higher paychecks
The U.S. economy added 214,000 jobs in October, slightly lower than economists expected, but the unemployment rate ticked down a bit to 5.8 percent, the Labor Department reported Friday.
One thing that continues to disappoint is wage growth -- a mere uptick of 0.1 percent, or 3 cents, to $24.57 in average hourly earnings.
The falling jobless rate is the latest sign the U.S. economy has been improving for Americans. Stocks closed at fresh all-time highs on Thursday, the national average for a gallon of gas has recently fallenbelow $3 for the first time since 2010 according to AAA, and unemployment continues to get closer to its pre-recession norm.
Yet CBS News exit polls this week found 78 percent of voters are worried about the direction the economy is going.
The jobs market explains this disconnect, according to Daniel Alpert, managing partner at Westwood Capital and an economics fellow at the Century Foundation.
"We look every month at job formation and see 200,000-plus jobs being created and think things must be going well," Alpert said. "When you look under the hood on those statistics though, you are also looking at a market that is employing many fewer people as a percentage of the total population [than previous decades] ... and added to that, you have enormous pressure on wages."
Alpert argues in his book The Age of Oversupply that a global glut of labor has kept economies like the U.S. struggling with underemployment
CBS News exit polls this week found 77 percent of voters making less than $50,000 a year said that their family finances have been largely stagnant or have gotten worse compared to two years ago.
Other statistics show incomes haven't recovered since the recession, which ended in 2009. Median household income was $51,939 in 2013, with no meaningful improvement over the prior year, and it's actually 8 percent lower than in 2007 before the country fell into a recession, according to the Census Bureau.
Can Americans finally expect to see a lift in their wages and salaries?
When it comes to pay at the lowest-end, President Obama has been pushing to raise the federal minimum wage from $7.25 to $10.10, without success. But a number of states have been taking action. On Tuesday, five states -- Alaska, Arkansas, Nebraska, South Dakota and Illinois (in a non-binding measure) -- voted to increase the minimum wage within their borders. They joined more than a dozen states that have reportedly made similar moves in the last few years.
Alpert says raising the floor for wages will help low-income workers, but won't do much to boost pay for people higher up the income ladder because there's still too much slack in the labor market.
Overall though, most economists do expect annual wage growth, which this year has been stuck at about 2 percent, to accelerate next year as the labor market tightens.