It’s JOLTS day again today – the day the Labor Department releases its new data on turnover in the American labor market. This morning’s results could be more important ever, because these numbers measuring job openings and business hirings and employee voluntary departures (quits) are reportedly among those relied on most heavily by Federal Reserve Chair Janet Yellen in determining the employment scene’s health. And that judgment in turn will surely bear heavily on the Fed’s widely expected decision next month on raising interest rates.
All the smart money, of course, is expecting the rate controlled directly by the Fed to get hiked above the zero level for the first time since the end of 2008 – at the nadir of the financial crisis. But if the JOLTS data really is so crucial, that smart money may not be so confident. For the new JOLTS figures on job openings keep intact the longstanding story of the American jobs market as an increasingly low-wage jobs market.
As with previous posts on the subject, I get to this conclusion by looking at job openings in the economy’s lowest wage sectors as a share of the total. These industries include retail trade, leisure and hospitality, and the low-wage portion of the big but incredibly diverse professional and business services. That latter number isn’t published as such, but I assume (reasonably) that the low-wage share of professional and business services openings is the same as those sectors’ share of that category’s total employment.
The new report – with preliminary September data – shows that the low-wage share of openings hasn’t changed much in recent months. The final figures for July, and August were 33.75 percent and 32.94 percent, respectively, and it rose to 33.80 percent in September.
But these shares are higher than they were at the onset of the last recession (30.46 percent) and at the downturn’s end (29.48 percent). So although the total number of openings in September was just off the historic high (set in July), and therefore reflects some labor market vibrancy, it’s clear that, during the recovery, more and more have been for positions that no parent would want their child to be stuck in.
Another reason for concern flowing from the new JOLTS report is how openings in the government-subsidized private sector keep burgeoning, too. September’s preliminary figure was 18.96 percent – the highest share in recent months. That’s a good deal higher than at the December, 2007 beginning of the recession (17.74 percent). And even though it’s much lower than the 21.98 percent level hit when the recovery technically began in June, 2009, bear in mind that, at that point, these government-subsidized portions of the economy (especially healthcare services) were still virtually the only hiring games in town.
It’s entirely possible that Yellen and her colleagues at the Fed won’t especially care either that so many of the economy’s job opportunities continue to be lousy job opportunities, or that they keep coming in sectors heavily dependent on government spending decisions for their vigor. But if that’s the case, it would indicate that the JOLTS data, and especially the critical internals, aren’t so important to the Fed chair after all.