Businesses Are Rapidly Hiring And Wages Are Up — But There Still Aren't Workers
ARI SHAPIRO, HOST:
Businesses are hiring at a rapid clip. U.S. employers added 850,000 jobs last month. Wages are also up. For President Biden, it's cause for celebration on the eve of the July Fourth weekend.
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PRESIDENT JOE BIDEN: More jobs, better wages - that's a good combination. Put simply, our economy is on the move, and we have COVID-19 on the run.
SHAPIRO: As fear of the pandemic fades, Americans are spending freely, so businesses need more help. But not everyone is rushing back to work. NPR's Scott Horsley, who is at work, joins us now. Hi, Scott.
SCOTT HORSLEY, BYLINE: Good to be working with you, Ari.
SHAPIRO: June saw the strongest month of job growth since last summer. What does that tell us?
HORSLEY: It tells us the economic recovery is picking up steam. Job gains have increased in each of the last two months as businesses try to ramp up to keep up with this surge of demand from consumers, many of whom are now eager to put the pandemic behind them and go back to doing the things they used to do, whether that's going to restaurants or movies or ballgames. So that's encouraging.
But even as the job market is improving, it's still a long way from fully healed. We are still short about 6.8 million jobs from where we were before the pandemic. And the unemployment rate actually inched up a bit last month to 5.9%. What's more, as strong as the job gains were in June, many employers say they would have liked to have hired even more people, but they just didn't have enough applicants.
SHAPIRO: And so what does that mean for their business? How are they coping?
HORSLEY: Well, in some cases, employers have had to turn away business because they just don't have enough workers to meet demand. They're also, in some cases, offering bonuses and incentives to attract more workers. Wages in the private sector are up about 3.5% percent from a year ago. And in the leisure and hospitality sector, which is especially hungry for workers right now, wages have gone up about 7% in the last year.
You know, thanks in part to a more generous government safety net, workers don't necessarily have to jump at the first job opportunity that comes along. So employers are, in a way, competing in some ways against that safety net. As far as the White House economist Cecilia Rouse is concerned, though, that increased worker bargaining power is a feature, not a bug.
CECILIA ROUSE: Employers are having to increase wages, provide better working conditions. They're offering bonuses in order to attract workers. What it's saying is that workers have choices, and that's a good thing.
HORSLEY: Now, some employers are starting to acknowledge they have to do better. They can't just take it for granted that when they hang out the help wanted sign, workers are going to come running.
SHAPIRO: Of course, not all employers are the same. So which industries are seeing the biggest swings in employment?
HORSLEY: Once again, bars and restaurants were at the top of the list. They accounted for more than 20% of all the job gains last month. Hotels and recreation centers were also staffing up. Retailers were adding jobs. But there's a shift now from early in the pandemic. Now it's clothing stores that are hiring, not grocery stores. So we're dressing up and going out. We're not doing as much home cooking. Factories added 15,000 jobs last month. That's been held in check by the semiconductor shortage that's been plaguing automakers. Factories are also having to compete now with other industries for workers.
A couple of encouraging signs - the U.S. added 25,000 child care jobs last month and also a lot of jobs related to in-person schooling. And both of those should make it easier for parents who've been busy looking after their kids to find jobs in the months to come.
SHAPIRO: And as we said, the economy's not fully recovered. So far, the U.S. has about 7 out of 10 of the jobs that were lost during the pandemic. What - when should we expect to get the rest back?
HORSLEY: Well, if hiring continued at the pace it was in June, it would take about eight more months. It could happen faster if more people come into the workforce. That could happen this fall when more schools reopen and when the enhanced unemployment benefits are set to run out nationwide. Forecasters at the Congressional Budget Office said they think we'll be back to pre-pandemic levels of employment by the middle of next year. That's about two years sooner than they were predicting in February. And there are a number of things driving that improved outlook - aggressive federal spending, the much-improved public health picture and stronger spending by consumers, many of whom saved up a lot of money during lockdown, and now they're ready to celebrate.
SHAPIRO: NPR's Scott Horsley with some good news. Thanks, Scott.
HORSLEY: You're welcome. Transcript provided by NPR, Copyright NPR.