The December 2011 jobs report came out today from the Federal Government.
The Bureau of Labor Statistics compiles and reports this data to us each month. Today’s news was better than much of the recent jobs news we have gotten. We saw an increase of 200,000 jobs in December.
This means that America produced 200,000 more jobs than she lost across the 31 days of December. It has been a very difficult few years for job creation. Those of us who work for a living are producing more and faster. We are not seeing our wages rise with our productivity. We are working harder and making/doing more. What we are paid is not really rising. Wages, salaries and benefits have not done well since 2008.
The December jobs report shows us that new job creation was centered in the service sector.
More than 80% of the jobs we did create were in the service industry. The national average unemployment rate fell from 8.6% to 8.5% in December.
The Hispanic unemployment rate fell from 11.4% to 11% in December 2011. The Hispanic unemployment rate is down 2% from December 2010 to December 2011, falling from 12.9% to 11%. In short, there was considerable good news in the latest job report. Sadly, the prices of the things we buy are rising more rapidly than our wages are rising.
This chart above shows the average wage that the average private sector worker took home each December since 2001. You can see that there has been very little change in what we make per hour over the least 4 years.
Unfortunately, the prices of things we buy have risen. Gas, electricity, food, insurance, rents, mortgages and car payments don’t stay the same just because our wages do. High rates of unemployment and very low rates of wage growth have made many people feel poorer. People likely feel less affluent because they can buy less with their earnings. Our real wages are falling.
Real wages measure how fast our wages go up less the increases in prices. In the 12 months between November 2010 and November 2011, real wages were down 8 of 12 months.
The recent jobs report is positive. It does not address this issue of stagnant wages. Many of us wont feel the recovery until our real wages start rising.'
Max Wolff is Chief Economist for GreenCrest Capital and teaches economics at the New School University Graduate Program in International Affairs. His work can be seen on Bloomberg, Reuters, NPR, BBC, The Huffington Post, The Wall Street Journal and other outlets.