Jobs Report: March Springs Back
The Labor Department released the March jobs report and the results were good: 216,000 non-farm jobs were added in the economy and the unemployment rate dropped to 8.8 percent. Since November 2010, the rate has dropped a full percentage point.
The trend is moving in the right direction, as the total number of unemployed persons dropped to 13.5 million from 13.7 million in February and for the first quarter of the year, the US economy created an average of 159,000 a month. The economy needs to create about 125,000 jobs a month just to keep pace with new entrants to the work force, so it's important that we string together a bunch of these +200,000 jobs a month to really put a dent in the unemployment rate.
While I am pleased about the positive developments, another trend is reasserting itself in the American economy: pay disparity. It never really went away, but the Great Recession inflicted pain across the board. In 2010, one group is back with a vengeance: CEOs.
USA TODAY conducted an analysis of data from GovernanceMetrics International and found median CEO pay at 158 S&P 500 companies jumped 27 percent in 2010, while the rest of us working schlubbs in private industry saw compensation grow just 2.1 percent in the 12 months ended December 2010, according to the Bureau of Labor Statistics.
Median CEO pay in 2010 was $9 million, just shy of the record-setting $9.2 million in 2007 and up from from $7.1 million in 2009. Many CEOs and their enabling boards, claim that they are due this pay hike because the captains of these companies boosted the price of the stock. Of course they were the very same folks who were watching the store when the stocks plunged, but that's a mere detail, right?
The disparity between income seems even worse, because the rising tide has not exactly lifted all boats. While there have been employment gains over the past year, the situation remains grim for many Americans. 7.7 million jobs have vanished during the recession; there are 13.5 million Americans currently unemployed; 8.4 million are working part time for economic reasons, and about 4 million more workers have left the labor force.
Simply landing a job may not be enough for some Americans. As Motoko Rich reports in the New York Times, many of the 1.5 million positions that have been created in the last year "are unlikely to pay enough for workers to cover the cost of fundamentals like housing, utilities, food, health care, transportation and, in the case of working parents, child care."
Rich's article builds on a new study, commissioned by the nonprofit, Wider Opportunities for Women, which seeks to determine how much income it takes to meet basic needs without relying on public subsidies. The BEST Index, Wider Opportunities for Women shows that single workers need $30,012 a year - nearly twice the federal minimum wage - to cover basic expenses. Here is the chart that accompanied the NYT story:
I didn't mean to bring you down, amid all the hoopla surrounding the report, but it bears noting that when you see gains of 37,000 in the leisure and hospitality industries, its important to know that many of those positions are low-paying, which is a better hardship than no job at all, but a hardship nonetheless.
Here are the highlights of the March report:
- March Jobs: +212,000
- February Jobs: +194,000 from +192,000
- January Jobs: +68,000 from +63,000
- Total Jobs created since Feb, 2010: 1.5 million
- Unemployment Rate: 8.8 percent, from 8.9 percent in February
- Unemployed persons: 13.5 million, from 13.7 million
- Long-term unemployed (jobless for 27 weeks and over): 6.1 million, which represents 45.5 percent of the total unemployed
- Part-timers (hours cut for economic reasons): 8.4 million
- Average Hourly Earnings: unchanged at $22.87 (Over the past 12 months, average hourly earnings have increased by 1.7 percent)
- Average Workweek: 34.2 hours (unchanged)
- Leisure and Hospitality: +37,000
- Temporary Services: +29,000
- Health care: +37,000 (Over the prior 12 months, +283,000 jobs, or an average of 24,000 jobs per month)
- Government: -14K (all at the state and local level, fifth consecutive month of job losses. 391,000 total government jobs lost since peak in September 2008)
- Manufacturing: +17,000 (+212,000 jobs since December 2009)
