By: National Employment Law Project

Washington, DC – The economy added 115,000 jobs in April, according to the Bureau of Labor Statistics’ monthly jobs report released today.  April marks the second straight month of disappointing growth, following a promising winter.  The unemployment rate ticked down to 8.1 percent, largely because people left the labor force.  At this rate, it will be years before the economy can close the jobs deficit, which remains at nearly 10 million jobs, and return the 12.5 million unemployed to work.  With so many still out of work and so few opportunities, wage growth remains weak, raising further concerns of a flagging recovery.

“April’s employment growth of only 115,000 jobs, along with a decline in labor force participation, is sobering news for workers and the economy,” stated Christine Owens, executive director of the National Employment Law Project.  “The economy needs a boost, with more investment to create jobs and higher wages for workers to stimulate greater demand.”

April’s employment report by the numbers

April is the second month of jobs gains under 200,000.  This brings down average growth over the first four months of 2012 to 201,000 jobs.  Whether this trend will continue into May and develop into an official slowdown remains to be seen, but April’s report reminds us that a sustained and robust economic recovery is still far from reach.  More must be done by policymakers to create good jobs.  The following are items of interest in this month’s report:

•  Public sector job losses.  Public sector job-loss increased in April to 15,000.  Since the official end of the recession in June 2009, the public sector has lost 601,000 jobs on net.
• Employment and labor force participation.  The share of the working-age population with a job edged down in April, to 58.4 percent, as did the share of Americans in the labor force, to 63.6 percent.  These are both discouraging signs.
• Long-term unemployment.  The duration of unemployment is still very long: on average, unemployed workers were out of work for 39.1 weeks, or for about 9 months, in April.  Over four in ten (41.3 percent) unemployed workers have been out of work for six months or more.
• Underemployment.  Underemployment continues to affect a significant share of the labor force.  In addition to the unemployed, 7.9 million are working part-time involuntarily.  An additional 2.4 million want to work and are available for work, but have given up their search.  Together, this means that 22.8 million are either unemployed or underemployed, resulting in a “real” unemployment rate of 14.5 percent.
• Signs of future hiring.  Signs of a hiring picked up in April when hiring in temporary help services, normally a predictor of future hiring, increased by 21,100.  Average hourly wages ticked up by $0.01 while the average workweek stayed the same at 34.5 hours.
• Jobs deficit.  The economy needs stronger, sustained growth to close the jobs deficit, which still stands at 9.8 million jobs as of April.  This represents the nearly 5.0 million jobs lost on net since the start of recession, as well as the 4.8 million jobs the economy should have added over this period in order to account for normal labor force growth.

April’s employment report in focus: Declining wage growth

As April’s employment report demonstrates, average hourly wages are increasing, but at a far slower pace than before the recession.  A new issue brief from NELP explains how decelerated wage growth and declining real wages undermine our economic recovery.  Specifically, NELP finds that:

• Growth in average hourly wages has slowed since before the recession, and the value of wages adjusted for inflation has fallen over the past year.
• Lower wages have been fueled by expansive growth in low-wage occupations.
• Wages for entry-level and reemployed workers coming off a jobless spell are declining.  And, higher shares of continuously employed workers are experiencing no growth.
• Workers earning the minimum wage have historically low spending power.

“Increasingly, Americans are finding that low-wage jobs are their only option.” stated Owens.  “While solutions such as the restoration of organizing and bargaining rights, stronger enforcement of wage laws, and a renewed social compact among corporations and their employees are powerful and necessary antidotes for the troubling erosion of wages, a critical first step we could take right now is to raise the minimum wage, close loopholes like the excessive employer tip credit, and index the rate to inflation so that it keeps pace with the rising cost of living.”

Recent legislation introduced by Senator Tom Harkin (D-IA) would raise the federal minimum wage from the current $7.25 to $9.80 by 2014 and index it to inflation.  In the absence of federal action, a growing number of states and cities are making a fair minimum wage a legislative priority.  Higher wages for the nation’s lowest-paid workers puts money in the pockets of individuals likely to spend it quickly and directly in their local economies, boosting demand that in turn encourages more hiring.  Moreover, given the severe erosion in value of the minimum wage since the late 1960s and recent and predicted explosive growth in low-wage occupations, raising the minimum wage is the only way to ensure that millions of Americans who work for a living will be able to make a living from work.

The National Employment Law Project is a non-partisan, not-for-profit organization that conducts research and advocates on issues affecting low-wage and unemployed workers. For more about NELP, visit www.nelp.org.