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Labor Market Insights and Public Opinion on Work in the United States

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Labor Market Insights and Public Opinion on Work in the United States

The recently released Bureau of Labor Statistics (BLS) data for the U.S. labor market in November, outlined in their report (https://www.bls.gov/news.release/pdf/empsit.pdf), revealed noteworthy figures:

  • New job additions: 199K compared to 150K in October (forecast was 180K). 
  • Private sector growth: 150K compared to 85K, with a forecast of 153K (we consider Private sector dynamics more representative of the overall situation).
  • Unemployment rate: 3.7% compared to 3.9% the previous month, with a forecast of 3.9%.
  • Wage growth: 0.4% MoM and 4.0% YoY compared to 0.2% MoM and 4.0% YoY in October. Forecast: 0.3% MoM and 4.0% YoY.
  • Participation rate: 62.8% compared to 62.7% the previous month.

These statistics surpassed the earlier ADP figures, which reported only +103K new jobs on Wednesday. It's important to note that the lower figures from the previous month (150K) were partly attributed to a one-time effect caused by a major strike at the United Auto Workers company.

Unemployment has slowed down, and wage growth rates have slightly increased. However, the data doesn't provide significant grounds for a softer Federal Reserve stance.

Two consecutive independent surveys conducted in the U.S., one by The Wall Street Journal and the other by NBC, revealed that more than half of Americans believe that wage labor cannot provide workers with a standard of living that allows them to keep up with rising prices without falling into poverty.

Furthermore, respondents noted, for the first time in many generations, that children are living poorer lives than their parents. Worse yet, the new generation has fewer opportunities to achieve success through the traditional "work hard and you will be rewarded" principle that has been a cornerstone of Western (specifically, Protestant) ethics for centuries.

Sociologists draw the conclusion that shifts in the labor market pose a threat not only to the economy but to society as a whole. The erosion is undermining the religious and moral foundations of the "American Dream" and fueling radical left-wing ideologies like cancel culture. Sociologists emphasize that this identified trend is not temporary; the socio-economic system in the U.S. has evolved in such a way that social elevators, which previously allowed people to theoretically move "from rags to riches," no longer function.

Experts point out that individuals are now permanently tied to the social class of their parents. This applies equally to dishwashers and top managers, albeit with opposite final outcomes. As one analyst at the Brookings Institution in Washington put it, "both wealth and poverty stick equally firmly to the feet of their bearers."

According to the surveys, fewer than a fifth of respondents (18% for WSJ, 19% for NBC) agreed that wage labor could support the standard of living they desire, while more than a third disagreed. This represents the lowest level of social optimism in the past 30 years.

The remaining respondents took an undecided position, stating that while this ethic was theoretically correct and justified in previous years, it no longer holds true today.

The strengthening disillusionment with honest work is evident when comparing the results of the current surveys with those conducted in 2016. Seven years ago, 48% of respondents still believed in the feasibility of the "American Dream" (the survey was conducted by PRRI at that time).

However, sociologists clarify that responses depend on the current socio-financial situation of the respondent. For instance, recent immigrants and individuals from Latin American countries still have a high belief in the feasibility of the "American Dream" — 61% believe they can provide themselves and their children with a decent life (at least compared to life in their historical homeland).

This phenomenon is referred to as the "low start" effect. Consequently, the positivity level of the children of recent immigrants, given the current economic trends, is gradually moving towards the national average, i.e., downward.

Sociologists also note that women, in general, perceive the current and future labor market situation more pessimistically than men.

The results of the latest surveys haven't shocked sociologists; they align with the consensus in interpreting the results of these studies. Analysts have long pointed out that the increasing income gap between the rich and the poor, coupled with the thinning of the middle class — the social base of public stability — is the cause of public disappointment in "mainstream" work ethics.

This gap is most pronounced in the United States among all OECD countries, as highlighted in a 2022 report from the Brookings Institution. According to the report, 1% of American families currently possess 31% of the national wealth (in 1989, the last figure was 24%).