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The U.S. economy added 2.6 million jobs overall in 2015, part of a two-year gain that was the best since the late '90s. Yet wage growth remained relatively slow. Secretary of Labor Thomas Perez explores the final jobs report of last year and more with Judy Woodruff.
The final jobs U.S. report for 2015 helped finish the year off with solid growth. Overall, the economy added 2.6 million jobs last year. Combined with 2014, that led to a two-year gain in jobs that was the best since the late '90s.
And, yet, wage growth remained slow or modest at best for the year, around 2.5 percent.
Tom Perez is the secretary of labor, and he joins me now.
And welcome back to the program.
THOMAS PEREZ, Secretary of Labor: Pleasure to be with you and all your viewers.
So, this is a strong year of growth. I saw one report that said it's — called it a red-hot hiring spree.
What's behind this? What was driving this?
Well, your introduction is really spot on.
When you look at the last two years, not simply the last month — and, by the way, the best month of — the best quarter of 2015 was the last quarter of 2015 — when you look at the last two years, this is the best two-year stretch we have had since the late '90s.
You look at auto sales. Last year was the hottest year for auto sales in history. You look at the — you look at the fact that this six-year stretch of auto sales is the best stretch we have had since the end of World War II. And you look at not only the quantity of jobs, Judy, but the quality of jobs, because what we're seeing over the last two years is not only good numbers, but very good quality.
And you look at, for instance, professional and business services. That's been the biggest growth area over the last two years. These are good jobs. Construction had a good year last year. And with the infrastructure bill that passed at the end of last year, I expect construction will continue to do well.
Health care, notwithstanding the truth deniers who say the ACA is a job killer, the health care has been a recession…
The health care law.
That's been a recession-proof industry.
So, quantity and quality has been moving forward, and that's a good thing.
Well, much of the underlying data is strong, Mr. Secretary, but there still are some signs of concern.
And I want to ask you if it's concern. It looks as if jobs that pay at the higher end, people earning more, are doing better than those in the middle- and lower-income levels. Wage — as we just mentioned, wage growth is stagnant.
How do you explain that persistent stubbornness in terms of getting wages higher?
Well, what invariably happens in a recovery is the jobs that come back first are the lower-paying jobs, and that's what happened in this recovery.
Now what you're seeing in recent years, which is a good thing, is that more jobs that pay better are coming back. And that's what I was mentioning about the last two years. The challenge of wage stagnation is an undeniable challenge and it predates the great recession.
Last year's real wage growth of 2.1 percent was the best we have had since the recovery began. And so that's solid, but that's not enough. And, again, this issue dates back to really the late '70s. And for decades after World War II, productivity and real wage growth went hand in hand. Americans helped bake the pie of prosperity and they shared in those benefits.
And then it became delinked starting in the late '70s, with the exception of the end of the Clinton administration. And so we still have real work to do on real wage growth. That's the unfinished business.
But it sounds like something, though, that you expect to continue, the slow wage…
Well, last year, again, was the best year we have seen in the recovery.
And in the end of the Clinton administration, the unemployment rate was 4 percent. And so one of the things we can do to put upward pressure on wages is to continue to have tight labor markets. Another thing we can do is to raise the minimum wage. Another thing we can do is the regulations the president has directed us to do to make sure that people who work overtime get paid overtime.
And then investing in skills is a tried-and-true method of helping people get access to those middle-class jobs that are out there in I.T. and other sectors.
Broaden this out for us. We know that, globally, China is slowing down. We have done a lot of reporting on that, what's happening to China's market. That's having global repercussions.
And then you have oil, the price of oil, at record lows.
How much do you worry about the effect of things like that on the U.S. economy and U.S. jobs?
Well, the price of oil as it is now for consumers is an unmitigated boon.
You go to a gas pump, and you're paying less than $2 a gallon. The average family last year had about $500 to $800 of additional money in their pockets. That's good for consumers. And what do they do with that money? They spend it. And so you see very good numbers on consumer spending in the United States.
Unless you're working in the oil industry.
And, of course, the challenge for those working in the sector — and we have seen that impact in the mining sector, which is where the oil jobs are found.
And, certainly, the headwinds from China, and others in the strong dollar, it's more difficult to manufacture, and so the manufacturing numbers in 2015 weren't as good.
But, again, we had these headwinds in 2015 as well. I did a lot of numbers days interviews when people said the market was volatile over the last two weeks. Isn't — isn't — the job numbers, aren't they going to go down?
And you look, and you see we have had two years in a row of north of 200,000 jobs a month on average. That's solid.
One other thing I want to ask you about, Mr. Secretary, is the labor force participation rate. It continues at what I understand to be a four-decade low. What is it, 62 percent of Americans who want to be or would like to be in the labor force actually have a job.
So how do you — what's the prospect for the future for people who want to work, either don't have the job they want or don't have any job?
Well, the labor force participation rate over the last year has been basically the same. It's about 62.6 percent.
And it's been a very narrow band. And the reason it has gone down from, say, 10 years ago, 15 years ago, even five years ago, the primary reason it's gone down is because of the aging of the population. Economists say that roughly 50 percent of the reduction in labor force participation is attributable to demographics.
The main thing that we could do to increase labor force participation at a policy level is to enact federal paid leave. The countries that have enacted paid leave laws — and Canada is a great example. In 2000, the female labor force participation in the U.S. and Canada was identical.
Because of their investment in paid leave, they are now 8 percent ahead of the United States. If we had kept pace, we would have 5.5 million more women in the workplace, making the Silicon Valley and Wall Street look more like America, making our Medicare trust fund and Social Security trust fund more secure.
And a big debate about that right now out on the campaign trail.
Labor Secretary Tom Perez, thank you very much.
Always a pleasure.
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