What the latest jobs report doesn’t tell you: Chipping away at income

That’s why we can’t have nice things.

Look at the current job situation in the country and what do you see? An unemployment rate at its lowest level in 54 years. Almost two vacancies for every unemployed person. More than 500,000 jobs were created in January alone, beating most experts’ estimates.

But take a closer look, like I did at the US Census Bureau’s Household Pulse Survey in February, and what do you see?

One in nine adult Americans, or nearly 12 percent, suffered a loss of job income in January. How is this possible in the current market that favors workers so heavily? With a labor shortage that has left millions more job openings than unemployed, companies are desperate for employees. As a partial result, wages are expected to rise by 4.6 percent in 2023. Most people would assume that the employee has all the leverage here.

“When you look at it, it’s pretty hard to poke holes in this report,” economist Dan North told CNBC of the January jobs report, which showed a net gain of 517,000 nonfarm payrolls.

But my analysis of the census data suggests shots have been fired and holes abound.

In states like California, Nevada, New Jersey and Tennessee, up to one in seven adults suffered a loss of job income in January. In 36 states, at least one in ten had to accept a loss of income from work. And it’s the same people who keep hearing about record-low unemployment, rosy job postings, and comfortable hiring incentives.

So what gives?

For one thing, many people are technically “busy” according to the US Bureau of Labor Statistics’ definition, but barely meet the definition in practical terms.

The labor shortage has resulted in reduced opening hours in the restaurants and retail spaces, which in turn eats into the paychecks of the hourly workers employed there.

A childcare crisis in the US is throwing working parents out of their jobs. COVID-19, flu and RSV continue to keep workers at home, either because they or their children are affected.

About 40 percent of Americans have a second income, many of whom just need it to make ends meet. Side hustles can be fleeting, especially after the holiday season.

Persistent supply chain problems are taking jobs away from contractors and others who rely on materials to do their jobs. And inflation has limited spending, which can dampen earnings for small business owners and the self-employed.

This mirage of low unemployment and an abundance of vacancies diverts our attention from the larger economic problems at play. Income inequality and the wealth gap are becoming more extreme every year. US companies and their shareholders benefited from record-high profits during a deadly pandemic and crippling inflation. And despite promises, many companies are still not paying a living wage.

More than 60 percent of Americans live paycheck to paycheck. Almost as many Americans have savings of less than $1,000. The cost of living exceeds wages and census data shows that one in four adults is using external funds to meet their spending needs, e.g. B. Credit cards, borrowing money from friends and family or receiving government assistance.

Don’t get me wrong: we should all welcome the low unemployment rates, especially among women and minorities. We should breathe a sigh of relief at the promising job report. We should feel a lot of optimism about our job security.

But we should not forget that things are not always the same and sometimes a closer look at the data is enough. For a while, one side of the fence may be bulletproof, the other will get holes.

Christian Worstell is a Senior Writer at HelpAdvisor.com, focusing on finance, health and lifestyle issues affecting everyday American life. He is the author of the recent work analysis “1 in 9 Americans experience a loss of job income despite record-low unemployment rates.”