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Primer—The State of the Union for Working People

In preparation for President Trump’s State of the Union speech, the Economic Policy Institute has assembled research from the last year that examines the real state of the union for working people

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In preparation for President Trump’s State of the Union speech, the Economic Policy Institute has assembled research from the last year that examines the real state of the union for working people on wages, manufacturing and trade, taxes, labor standards, housing, and immigration.

Wages and employment

  • 2019 had solid job growth, but wage growth slowed. Average monthly job creation has held remarkably steady for the past nine years, but it did soften in the last year, from 223,000 in 2018 to 176,000 in 2019. Wage growth slowed for much of the year, providing further evidence that we are not yet at genuine full employment. After hitting a recent high point of 3.4% year-over-year wage growth, the growth rate has measurably decelerated and wage growth closed out the year at only 2.9% in December.
  • Wage growth for low-wage workers has been strongest in states with minimum wage increases
  • More on longer wage trends in our Nominal Wage Tracker.

Manufacturing and trade

Taxes

  • Tax Cuts and Jobs Act (TCJA) has been a policy failure. Notably, business investment contracted for the third straight quarter—the first time this has happened since the Great Recession in 2009. Given that boosting business investment was the primary stated goal of the Tax Cuts and Jobs Act (TCJA) passed in 2017, this seems like an unambiguous policy failure.:
  • On its second anniversary, the TCJA has cut taxes for corporations, but nothing has trickled down

Labor standards

Housing

Immigration

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Posted February 4, 2020 at 5:00 am

The State of the Union for Black Workers

Myths and facts

 

As President Trump prepares to deliver his State of the Union address, here are three charts that show why the economy is still not “working great” for all black workers in America.


Myth: The black unemployment rate is at an all-time low, and that means the economy is “working great” for all black workers.

Reality: Too many black workers are still out of work—black workers are twice as likely to be unemployed as white workers.


Even with a historically low average annual black unemployment rate of 6.1% in 2019, black workers are twice as likely to be unemployed as white workers overall and are more likely to be unemployed than white workers at every education level. Only black workers with some college or more education have an unemployment rate lower than the overall unemployment rate of white workers.

 

Black workers are more likely to be unemployed than white workers at every education level Unemployment rates by race and education, 2019

Education Black White, non-Hispanic
All 6.1% 3.0%
Less than high school 14.7% 8.3% 
High school 8.3% 3.9% 
Some college 4.9% 2.9% 
College 3.4% 2.2% 
Advanced 2.3% 1.7%
 
 
 
 

Updated with Jan.–Dec. 2019 data, from Black Workers Endure Persistent Racial Disparities in Employment Outcomes, Economic Policy Institute, 2019.

Source: EPI analysis of U.S. Census Bureau data

 

Myth: If black workers had better skills, they would have better employment outcomes.

Reality: Having a college degree doesn’t guarantee a college-level job, especially for black workers.


It is true that workers with higher levels of education have better employment outcomes. But in today’s economy getting a college degree doesn’t provide the universal boost that it used to. We have a high underemployment rate—a high share of college graduates who are working in jobs that do not require a college degree. And as the chart shows, black college graduates are more likely than white college graduates to be employed in occupations that do not require a college degree.

 

Black college graduates are more likely than white college graduates to be underemployed when it comes to their skills

Share of workers with a college degree who are not employed in a college occupation, by race, 2019

Race/ethnicity Rate
Black 39.4%
White non-Hispanic 30.9%
 
 
 

Adapted from Black Workers Endure Persistent Racial Disparities in Employment Outcomes, Economic Policy Institute, 2019.

Source: EPI analysis of U.S. Census Bureau data

 
 

Myth: The strong economy and historically low unemployment must mean historically strong wage growth among black workers, and especially among highly educated black workers.

Reality: Wages for black college graduates have actually fallen in the current recovery.


In a recovery, as the unemployment rates falls, you expect wages to grow. But in that respect this current recovery significantly lags the recovery of the late 1990s. Both recoveries have had similar declines in the unemployment rate, but wages today have not grown nearly as fast or as evenly across race and gender as they did during the late 1990s. Today, workers with bachelor’s degrees are not seeing nearly the level of wage growth that this group saw in the late 1990s. In fact, wages fell for black college graduates between 2015 and 2019, even as unemployment rates were falling significantly.

 

Wage growth was stronger among workers with bachelor’s degrees in the late 1990s than during the current expansion

Real average wage growth, workers with bachelor’s degrees, 1996–2000 and 2015–2019

Demographic 1996–2000 2015–2019
Men 10.9% 7.8%
Women 9.8% 3.0%
White 10.6% 6.6%
Black 11.5% -0.3%
 
 

Adapted from Wage Growth Is Weak for a Tight Labor Market—and the Pace of Wage Growth Is Uneven Across Race and Gender, Economic Policy Institute, 2019.

Source: EPI analysis of U.S. Census Bureau data