Overview
Later this week, the U.S. Bureau of Labor Statistics will release data on February 2023 job growth through its Employment Situation Summary. It will also release information on job openings, hires, and separations during the month of January 2023 through its Job Openings and Labor Turnover survey. As new economic data are published and the U.S. labor market continues to recover from the COVID-19 recession, one important underlying dynamic that economists and policymakers alike need to heed is the relationship between employment growth, job switching, and wage disparities in the U.S. labor market.
Topline economic indicators show that the U.S. labor market is remarkably strong. Over the past 3 months, the U.S. economy added an average of 356,000 jobs. The national joblessness rate, at 3.4 percent, is currently at a 50-year low. Almost all major industries have surpassed their pre-pandemic employment levels. And the quits rate continues to be near record highs—a sign that U.S. workers are confident in the labor market and in finding new and better employment opportunities.
Underlying these strong positive trends are several key developments that are shaping the recovery from the short but deep COVID-19 recession of 2020. One is the real wage gains experienced by workers at the bottom of the wage distribution. Another is the high rates of quits among these workers and U.S. workers overall. And a third development is the positive relationship between these two dynamics.
This issue brief will detail these three trends to put into perspective the importance of the stronger bargaining power experienced by low-wage workers in the wake of the most recent recession, as well as the key social infrastructure investments and policies that need to be undertaken in order to maintain and strengthen the gains workers made over the first 2.5 years of the economic recovery.
The topline U.S. labor market indicators
Let’s first set the…
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