Labor Secretary: Job Growth Is Good, But Wages Need Help

Dec 5, 2014
Originally published on December 5, 2014 5:30 pm
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MELISSA BLOCK, HOST:

And U.S. Labor Secretary Thomas Perez joins me here in the studio to talk about those new jobs numbers. Welcome back to the program.

U.S. LABOR SECREATRY THOMAS PEREZ: Melissa, it's always a pleasure to be with you.

BLOCK: In this latest jobs report - one of the best we've seen in quite some time. How do you account for that?

PEREZ: Well, we've seen broad-based growth for a while. This is now the 10th month in a row - over 200,000 jobs. So the economy has been moving in the right direction for some time. And what's nice about this report, for me, is it's broad-based growth. This is not a holiday hiring blip. This is growth across many sectors. Construction's doing well. Manufacturing's doing well. The sector that's doing the best right now and has been for the last year or so is business and professional services. We saw wage growth last month that was significant. And so we're seeing things moving in the right direction, and we're on pace for the best year of job growth since the late '90s.

BLOCK: Now, you mentioned, Secretary Perez, significant wage growth. And let's talk about that because there has been a pretty long-standing problem of wage stagnation. So here's the relevant number for December - a 9-cent-per-hour increase in the average hourly wage. You call that significant. How do you read it?

PEREZ: Well, average hourly earnings went up about 0.4 percent, which was twice what the economists had predicted. And what we see in wage growth is that when labor markets get tighter then employers have to pay more. And so we're moving in the right direction, but it's undeniable that we're not moving fast enough. And I speak to so many people in my travels across the country who haven't gotten a meaningful raise in years. And I think one of the biggest pieces of unfinished business in this recovery is to make sure that the shared prosperity means that people can get a meaningful raise.

BLOCK: And let's talk about why that hasn't happened 'cause we've been seeing solid growth in jobs but really puny growth in wages, right? - about 2 percent growth year to year, just barely outpacing inflation. Why so little improvement up to now?

PEREZ: Well, it's frustrating. You look at productivity growth since the late '70s and we've seen productivity growth of over 90 percent. And you look at wage growth, and you see real wage growth that's been something like 2, 3 percent. And what's frustrating for American workers - and I share that frustration - is that they helped bake the pie of increased productivity, but they're not sharing in the spoils of that.

BLOCK: And why is that?

PEREZ: And so that's why - well, I mean, I think there are a number of forces here. And what we're doing as an administration is focusing on really a number of areas to make sure that we lift wages. We have transformed our system for how we train people in America. What I hear from employers day in and day out is, I need to make sure I have that skilled workforce to compete. And so we've been able to help so many people punch their ticket to the middle class by transforming our workforce development system for advanced manufacturing jobs and other critical jobs that exist right now.

Another area is to make sure that we enforce laws that are on the books. Just yesterday, we released a report in California and New York alone - minimum wage and overtime violations amounted to losses of over $1 billion in wages. And if you extrapolate nationally, we're talking about, in any given month, over 2 million workers are being ripped off in the wage and hour context.

BLOCK: You're saying this is money to which they're entitled that they're not getting?

PEREZ: Absolutely. And enforcement matters. And this president has been very vigilant in giving us those resources. And so there's no one magic bullet that is going to address the issue of making sure we lift wages. The thing that will help as much as anything is to continue to pick up the pace of growth.

BLOCK: If you had to choose one, Secretary Perez, between further declines in the unemployment rate or wage gains - and I know you're going to want to say both. But if you had to choose one of those two, which would it be?

PEREZ: I think that's actually a false choice because as the labor market tightens because more people have jobs, then an employer has to give more wage incentives to hire the people that he or she needs. You know, 70 percent of GDP growth is consumption. One of the best ways to grow this economy is to put money in people's pockets. And so that's why the president advocates so vigilantly for raising the minimum wage. That's why we're working overtime to put in overtime regulation in place because that is about putting money in people's pockets. Job creation is really a joint venture between businesses and consumers. And one of the most frequent things I hear, Melissa, from business owners when I ask the question, what can we do to help? What do you need? The answer is, I need more customers. And when people have more money in their pockets, they buy more things.

BLOCK: Secretary Perez, thanks for coming in.

PEREZ: It's always a pleasure to be with you, Melissa.

BLOCK: Thomas Perez is the U.S. secretary of labor.

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