This is why we can’t have nice things.
Look to the country’s current job situation and what do you see? An unemployment rate that’s at its lowest point in 54 years. Nearly two open jobs for every one unemployed worker. More than 500,000 jobs created in January alone, crushing the estimates of most experts.
But take a closer look, as I did with February’s U.S. Census Bureau’s Household Pulse Survey, and what do you see?
One out of every nine American adults, or nearly 12 percent, experienced a loss of employment income in January. How is that possible in the current market that so heavily favors employees? Companies are desperate to hire amidst a worker shortage that has left millions more open jobs than unemployed workers. Wages are expected to increase 4.6 percent in 2023 as a partial result. Most people would assume the employee has all the leverage here.
“When you look at this, it’s pretty hard to shoot any holes in this report,” economist Dan North remarked to CNBC about the January jobs report that showed a net gain of 517,000 non-farm jobs.
But my analysis of the Census data suggests shots have been fired and holes are abound.
In states like California, Nevada, New Jersey and Tennessee, as many as one in seven adults experienced a loss of employment income in January. In 36 states, at least one in 10 experienced a loss of employment income. And it’s those same people who keep hearing about record-low unemployment, rosy jobs reports and cushy hiring incentives.
So, what gives?
For one, many people are technically “employed” by the definition of the U.S. Bureau of Labor Statistics but hardly meet the definition in more practical terms.
The worker shortage has led to reduced operating hours in the restaurant and retail spaces, which in turn cuts into the paychecks of the hourly workers they employ.
A U.S. childcare crisis is tearing working parents away from their jobs. COVID-19, flu and RSV continue to keep workers at home, either because they or their children have been affected.
Around 40 percent of Americans have a second source of income, many of whom need it just to get by. Side hustles can be fleeting, especially post-holiday season.
Lingering supply chain issues are taking work away from contractors and others who rely on materials for work. And inflation has limited spending, which can curb revenue for small business owners and the self-employed.
This mirage of low unemployment and a buffet of open jobs is diverting our attention from the larger economic issues at play. Income inequality and the wealth gap continue to widen to more extreme measures every year. U.S. companies and their shareholders benefited from record-high profits during a deadly pandemic and crippling inflation. And many companies are still not paying a living wage despite pledges to do so.
More than 60 percent of Americans are living paycheck-to-paycheck. Nearly as many Americans have less than $1,000 in savings. The cost of living is outpacing wages, and the Census data revealed that one in four adults are using outside funding to meet their spending needs, such as credit cards, borrowing money from friends and family or using government assistance.
Don’t get me wrong: We should all applaud the low-unemployment rates, especially among women and minorities. We should breathe a sigh of relief at the promising jobs report. We should feel plenty of optimism in our job security.
But we should not forget that things are not always as they same, and sometimes all it takes is a closer look at the data. For a while, one side of the fence may be bulletproof, the other is taking on holes.
Christian Worstell is a senior writer at HelpAdvisor.com with a focus on finance, health and lifestyle topics affecting everyday Americans. He is the author of the recent labor analysis, “1 in 9 Americans Experiencing a Loss of Employment Income Despite Record-Low Unemployment Rates.”