Admittedly I don’t know a ton about economics — I actually got a D in Micro frosh year of college — so I’m not really that strong on all the different indicators of an economy’s health. I can tell you it’s obviously a very politically-positive thing to be able to say that you, as a legislator/executive, created “job growth.” People love the term “job growth.” It implies that their families will have jobs to enter into whenever they need to do so, be it now (they’re unemployed) or later (their children). Job growth is a great concept. It’s not whole picture though.
You see this at the micro level, too — down with the organizations. A lot of CEO types love to increase headcount, because that’s a sure sign — to investors, to whoever else — that you’re growing and doing/getting better, because you have the ability to take on more people. There’s usually a bad flip side to that, but that’s easily glossed over.
Same kind of thing at the macro level, when addressing the whole economy: job growth is up, yes, but wages are down. Wages rose six cents on average in November, then declined about 5.5 cents on average in December — basically going back to where we were in October, and wages had been stagnant much of this year as well.
Hourly earnings in December rose 1.7% year-over-year, which is barely ahead of inflation. There’s this, too: when the unemployment rate falls — as it did in 2014, from 6.7% to 5.6% — economists typically expect a rise in wages. The theory is that you’re depleting the pool of existing workers, leading to more competition. That hasn’t happened this time.
The reality is probably that companies are still keeping belts tight because of recent economic downturns — and the possibility of another one in 2015 or 2016.
The problem is, it seems like we’re putting people into jobs with no real opportunity for advancement/promotion/more money. It’s good that they have a job — believe me, there was a period last May where I thought I might not have a job for a year or so, and the idea was terrifying — but maybe we should temper our excitement over the job growth and start looking at ways to encourage employers to consider driving up wages a little bit too. We want to believe people get jobs, work hard, and succeed upwards — that’s part of the notion of the middle class being built, right?
It just seems like constantly talking about “job growth” without the context of other aspects of the jobs picture is a fool’s errand, right?