Skip to content

Jobs Gains Ease Wage Pressure — on Congress

The gradually building recovery in the labor market may be one reason for the lack of urgency on Capitol Hill for action on the minimum wage.

Bureau of Labor Statistics data for October show hiring is on a steady upswing — the 214,000 net job growth marked the first time since the 1990s the economy has produced more than 200,000 jobs for nine straight months — and that the unemployment rate is at its lowest level since 2008.

But the report also showed few signs of wage increases, the element that has been lacking in the improving employment picture.

Higher wages are a sign that employers are having a harder time finding qualified workers, which would indicate workers are more in demand and can therefore ask for higher wages.

Pressure may be growing to increase wages, particularly if the economy adds jobs at its current pace. The unemployment rate for the short-term unemployed is down to its pre-recession level. The long-term unemployment rate, which spiked during the recession, has been drifting down slowly but remains high. There are still almost 3 million people who have been out of work for more than six months, more than at any point before the recession. And there are still 7 million part-time workers who would rather have full-time work and 2.2 million workers who have given up looking for work.

Until more of these workers and long-term unemployed workers find good full-time jobs, we likely will not see significant pressure on wages.

Minimum wage advocates, however, say they will not stop pushing for legislation, even if the economy improves.

“If you see a small uptick, that will be important and necessary for the American people,” said Anna Chu, director of the Middle-Out Economics project at the Center for American Progress. “That said, we need to do more. Congress needs to do more.”