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Job market stumbles to end 2021

By Masao Suzuki |
January 9, 2022
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San José, CA - On Friday, January 7 the U.S. Department of Labor released its last report on the 2021 job market. There were only 199,000 new jobs created, less than half of what economists and the business media expected. Most types of jobs showed slower growth, and there were 10,000 jobs lost by local governments. Despite strong job growth in 2021, there were still 3.6 million fewer jobs in December as compared to February 2020, right before the last recession began.

The official unemployment dropped 0.3% to 3.9%. Normally this would be getting close to full employment, which has only happened five times in the last 100 years. But since the start of 2020, almost 4 million Americans no longer counted as part of the labor force as they are neither working nor looking for work. If these people were looking for work, the unemployment rate would be about 5.4%.

Workers’ earnings have also been falling behind rising prices. Through November of 2021, average weekly earnings (including both rising wages and more hours of work) were up 4.7% from a year earlier. But over the same time, inflation as measured by the consumer price index went up 6.8%. This means that the purchasing power of an average worker fell about 2%, despite higher money-wages.

Inequality also increased as the unemployment rate for whites fell 0.5% to 3.2%. But the unemployment rate for African Americans rose 0.6%, to 7.1%. This increased the gap between white and Black Americans in terms of unemployment, to more than 2:1 ratio. For the last 50 years the unemployment rate for African Americans has been twice that of white Americans, or more, showing the persistence of the national oppression of Blacks in the labor market. Since the recession in 2020, the gap has actually grown larger, showing that the rising tide of jobs has not lifted all boats.

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