clock menu more-arrow no yes mobile

Filed under:

April jobs report: tons of new jobs and teeny-tiny pay raises

These numbers explain why so many workers are going on strike.

A worker is seen on the construction site of the new Statue of Liberty Museum currently being built on Liberty Island on July 2, 2018 in New York City. - The new 26,000-square-foot museum will celebrate the Statue of Libertys history, influence, and legac
A construction worker takes a break from building the new Statue of Liberty Museum on July 2, 2018, in New York City.
Angela Weiss/AFP/Getty Images

Employers added a solid 263,000 new jobs to the US economy in April — once again surpassing economic forecasts, according to the latest jobs report from the Bureau of Labor Statistics.

All the new hiring in April, plus an increase in people leaving the labor force, pushed the already super-low unemployment rate down even further, to 3.6 percent. That’s the lowest rate of unemployed Americans recorded since December 1969.

Yet the smaller pool of available workers didn’t translate to much higher pay: Workers only got an average hourly pay raise of 6 cents in April. A month earlier, wages rose a meager 4 cents.

The new jobs report shows that the US economy is continuing to expand, but without middle- and working-class families seeing much of the benefit. Job security is the one advantage employees can count on these days.

Low unemployment and high job creation means that nearly every American who wants to work and is able to has snagged a job by now. And those who lose their jobs, or decide to leave, probably won’t have a hard time finding another position.

Most of the new jobs created in April were positions in business services, construction, health care, and social assistance.

While all the new hiring is good, the numbers are not as great as last year. The average monthly job growth in the past three months was about 169,000, which is lower than the 223,000 monthly average during the same period in 2018. The drop isn’t alarming; it just suggests that the current labor shortage is making it hard for employers to fill all the open positions.

But with such a tight labor market and rising productivity, workers should expect much bigger pay raises than they’re getting.

Businesses are being super stingy

Even though Americans are finding jobs pretty easily, they still aren’t seeing the so-called “economic boom” reflected in their pocketbooks.

April was another month with disappointing wage growth.

Private sector workers (excluding farmworkers) got an average 6-cent hourly raise, adding up to an average hourly pay of $27.77. In the past 12 months, average hourly earnings have only increased by 3.2 percent, and that doesn’t even take inflation into account.

The latest pay data suggests that workers and labor unions will continue to strike to force businesses to boost wages.

Slow income growth has been the weakest part of the US economy in its recovery from the Great Recession. Wages have barely kept up with the cost of living, even as the unemployment rate dropped and the economy expanded.

April’s 6-cent average hourly wage hike suggests more of the same, despite a surprising 10-cent jump in February.

Over the past year, the cost of food and housing has gone up, so paychecks have had to stretch further. But because of recent falling gas prices, the annual inflation rate has fallen to 1.9 percent, compared to a high of 2.4 percent in 2018 (based on the Consumer Price Index).

So when you take inflation into account, workers’ real wages only grew about 1.3 percent within the past year. That’s faster than they’ve been growing since the recession started in 2007, but it’s still pitiful when you compare it to the sky-high payouts corporate CEOs are getting.

Frustration over stagnant wages is also the major underlying factor behind widespread worker strikes across the country in places like California, Illinois, and Missouri. Last month, 31,000 supermarket employees went on strike in the Northeast to reverse proposed pay cuts and rising insurance premiums. The Stop & Shop strike in mid-April was the largest private sector work stoppage in years. After eight days with empty supermarkets, the company agreed to scrap its plan.

Some economists are confident that wages will start to pick up if this trend continues. “[T]he sharp increase in the number of working days lost to strikes over pay and benefits over the past year suggests that employees increasingly recognize that the balance of power has shifted in their favor,” Ian Shepherdson, chief economist for the research firm Pantheon Macroeconomics, wrote Friday in an analysis.

The widespread labor unrest underscores how the Republican tax cuts did little to help working-class families, despite all the promises from congressional Republicans.

In response, voters in some states have forced businesses to give low-paid employees a raise.

In November’s midterm elections, voters in Missouri and Arkansas overwhelmingly approved ballot measures that will raise the minimum wage for nearly 1 million workers across both states. And as a result of the new laws, low-wage workers in 19 states got pay raises on January 1.

Those laws have helped boost wages so far in 2019, but not enough.

Sign up for the newsletter Today, Explained

Understand the world with a daily explainer plus the most compelling stories of the day.