Economy 101: High unemployment holds down pay
By CHRISTOPHER S. RUGABER, AP Economics Writer Christopher S. Rugaber, Ap Economics Writer – Fri May 7, 2010 4:54 pm ET
WASHINGTON – Employers are finally ramping up hiring, but they're not paying their existing workers much more.
Hourly pay barely rose last month, according to the Labor Department's April jobs report, as employees have little bargaining power to demand higher wages. That's partly because there are still 15.3 million unemployed workers who would happily switch places, economists say.
Average hourly earnings rose by a penny to $22.47 in April. That's after falling two cents in March and is only two pennies higher than January's $22.45 figure.
In the past year, hourly wages are up only 1.6 percent. That's less than the rate of inflation, which rose 2.3 percent in the 12 months ending in March, mostly due to rising gas prices.
Excluding the volatile food and energy categories, the consumer price index rose 1.1 percent in the year ending in March.
Wage gains are likely to remain weak in the near future because there is so much competition for jobs, economists say. There are about 5.5 unemployed people, on average, for each job opening.
These and other details can be found in the government's latest jobs report.
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HIRING PICKS UP ...
290,000: Jobs added in April
230,000: Jobs added in March
39,000: Jobs added in February
___ ... BUT UNEMPLOYMENT RATE RISES...
9.9 percent: Unemployment rate in April
9.7 percent: Unemployment rate in January, February and March
10 percent: Unemployment rate in December and November
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... AS WORKFORCE GROWS
805,000: New jobseekers in April
398,000: New jobseekers in March
342,000: New jobseekers in February
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THE JOBLESS OLYMPICS: LATEST UNEMPLOYMENT RATES
(Source: Organization for Economic Cooperation and Development)
3.8 percent: South Korea
5 percent: Japan
7.8 percent: United Kingdom
7.3 percent: Germany
9.9 percent: United States
19.1 percent: Spain
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STILL LOOKING
45.9 percent: Proportion of unemployed out of work six months or longer, highest on records dating back to 1948
33 weeks: Average length of unemployment in April, also a record
6.7 million: Number of people jobless for six months or longer, also a record 1.3 million: Number unemployed for that long in December 2007, when the recession began
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WHERE THE JOBS ARE
44,000: Jobs added in manufacturing
21,000: Jobs in restaurants and bars
20,100: Jobs added in hospitals, nursing and other health care sectors
14,000: Jobs added in construction
12,400: Jobs added by retailers
7,300: Jobs added in computer services
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WHERE THEY'RE NOT
-21,000: Job losses in couriers and messengers
-6,000: Job losses in state and local government
-700: Job losses in air transportation
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UNDEREMPLOYED
9.2 million: Number of part-time workers who would have preferred full-time work
2.4 million: People without jobs who want to work but have stopped looking
17.1 percent: "Underemployment" rate in April if you include the above two categories
17.4 percent: Underemployment rate in October, the highest on record dating to 1994
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APRIL UNEMPLOYMENT RATE BY GROUP
11 percent: Female heads of households 6.8 percent: Asians
9 percent: Whites
12.5 percent: Hispanics
16.5 percent: Blacks