Winners and Losers in the November Jobs Report

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A surprisingly strong jobs report last week had workers, economists and labor attorneys cheering at the promising trend in employment figures.  Yet as the U.S. job market improves, its basic character is also changing, creating new winners and losers.

Warehouses and trucking companies are employing more holiday workers than the stores they serve. Factory workers are receiving more overtime, while wages have stayed flat for employees in the hotel and restaurant sector. And finally, retirement-age Americans are keeping their positions at work, while folks who’ve been unemployed for more than six months are facing increasingly grim prospects for returning to the workforce.

Here’s a snapshot of 5 key trends we can see in last Friday’s November employment report:

HOLIDAY SHOPPING

Hiring typically gets a significant bump during the holiday season. But online shopping has altered the game. Just consider transportation and warehouse employment: according to the Labor Department, these sectors added 30,500 jobs in November. That’s 50% more than the November increase from the previous year. These are primarily FedEx and UPS positions—seasonal workers who bring the deluxe DVD edition of “Downton Abbey” to your doorstep.

Amazon itself planned to hire 20,000 extra holiday workers for 2013. Last month, the shipping sector increased its workforce at a much higher rate than brick-and-mortar companies did. Meanwhile, stores themselves boosted their employment numbers by 24,800 – only half as many people as they added the previous year.

However, enthusiastic job-seekers might want to hold off on getting a commercial driver’s license. If Amazon CEO Jeff Bezos can make his dream a reality in the years to come, products will be delivered to shoppers’ doorsteps by Amazon drones.

DECLINE OF FACTORIES GREATLY EXAGGERATED

In recent years we’ve heard endless doomsdaying about the death of manufacturing. And even in the past few months, government reports show that factory orders have fallen off. But industry studies indicate that assembly lines are still cranking away.

Friday’s jobs report show that factory production is buzzing away. Manufacturers added 27,000 jobs, which tipped total factory employment over the 2 million mark for the first time since 2009. Even better, factory workers are averaging 4.5 hours of overtime each week, which is a 10% increase over 2012. And of course with the production of more cars, more steel, and more machinery we also can expect more spillover effects in other sectors like transportation and technology.

OLDER WORKERS

The unemployment rate is only 4.8% for adults over 65, compared with 7% for Americans as a whole. Dating back to December 2012, the number of senior citizens who are either employed or seeking work has grown by nearly half a million.

In some cases, these employees have held onto their jobs after reaching retirement age because their savings were wiped out during the financial crisis. But there are other factors as well, primarily Social Security. To collect full Social Security benefits, Americans must now wait until age 66 instead of 65.

STAGNANT PAY FOR LOW-INCOME WORKERS

During the pat year, roughly 16% of new jobs were in the restaurants and hotel industry. Unfortunately, as we have explained in previous posts, these industries are notorious for low wage jobs for their waiters and cleaning staff. Fast food chains like McDonald’s have become a flashpoint for debates over reconsidering the minimum wages, with employees across the U.S. staging walkouts last week

Restaurants and hotels added another 360,000 employees in 2013. And basic economic theory tells us that higher demand for workers usually leads to higher pay. So how much did this sector have to raise pay to lure in workers?  Only 15 cents per hour, bringing the average up to a mere $11.80. Since the average number of working hours is less that 40 per week in this industry, that wage translates into poverty-line-earnings for the average fast-food worker with a single child. In fact, since September, leisure industry wages have actually fallen by 3 cents an hour.

LONG-TERM UNEMPLOYED

Even as the total number of unemployed Americans has dropped by 350,000 over the past 60 days, the level of long-term unemployed has barely budged. This group numbers over 4 million. And long-term prospects do not look cheerful. Companies are shifting away from hiring workers with long gaps in their employment history.

Over 37% of unemployed Americans in November reported that they’d been out of work for six months or more, a higher rate than in October. Until we make a commitment to viewing these Americans as equally unemployable, the phenomenon will continue to stunt economic growth.

White House officials and Congressional Democrats have made a case that this shows serious need for extended unemployment benefits, which are currently set to expire at the end of the year. An extended benefits program would mean 28 extra weeks of help in most states (which would come on top of the 26 weeks typically available).

Yet if lawmakers allow the program to expire, 1.3 million Americans will immediately lose benefits. An additional 800,000 would have benefits cut off in the first two months of 2014. The workers’ compensation attorneys and L&I lawyers at Emery Reddy urge readers to contact their Congressional representatives and insist that they extend these benefits to unemployed workers until the economy further recovers and more jobs are available to out-of-work Americans.

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