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Job gains continue, so why are wages stubbornly stagnant?

February’s labor report came in with stronger growth than expected, with 295,000 jobs added last month and the lowest unemployment rate since the 2008 financial crisis. But wage growth continues to lag, with hourly earning rising just one tenth of a percent. Secretary of Labor Thomas Perez analyzes the numbers with Judy Woodruff.

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  • JUDY WOODRUFF:

    The February jobs report came in stronger than expected, with more than 200,000 jobs a month being added for the past year, the best pace since 1995. The unemployment rate has fallen to its lowest point since the financial crisis of 2008.

    Still, it has not translated at some levels. Wage growth remains sluggish. Hourly earnings were up just a 10th-of-a-percent last month. And the civilian labor force, people who are working or actively looking for work, shrank in February.

    Thomas Perez is the U.S. secretary of labor, and he joins us now.

    Welcome to the program.

    THOMAS PEREZ, Secretary of Labor: It's always a pleasure to be with you.

  • JUDY WOODRUFF:

    So, break these numbers down for us. Who is creating these jobs? Who's getting them?

  • THOMAS PEREZ:

    Sure.

    Well, as you correctly said, this is the best 12-month period we have had in decades. We haven't seen 200,000 or more jobs for 12 months in a row literally in decades. And the nice thing about this report and the nice thing about this about what we have seen over the last year, Judy, is it is broad-based growth.

    The biggest job creator is business and professional services. Those are well-paying jobs and consultants, accountants, things of that nature. Then we have health care, which has really been recession-proof. Construction is doing very well. The average person in manufacturing is working 42 hours a week.

    So, not only are the quantity of jobs increasing, but the quality of jobs over the last year has been much better.

  • JUDY WOODRUFF:

    Well, at the same time, your friends the Republicans on the Joint Economic Committee in the House in the Congress are saying, still, at this rate, you need to create over 400,000 jobs a month in order to close what they call the job gap under this president.

  • THOMAS PEREZ:

    Well, it's hard to listen to that without wondering what they're doing.

    I mean, if we had — my biggest frustration, Judy, is we're at 5.5 percent unemployment right now. We could be at 5 percent if we did things that have been tried and true in a bipartisan fashion in the past, transportation infrastructure, the minimum wage, immigration reform.

    The Congressional Budget Office looked at the bipartisan immigration bill from the last Congress. It lifted wages, it creates jobs, it helps sustain the Social Security trust fund. So we could be doing even better if we could get some help from the Republican leadership in Congress right now.

  • JUDY WOODRUFF:

    Well, you mentioned wages. Let's talk about that. We said they're growing slowly. We said how little it was last month, 2 percent a year. The Brookings Institution says, right now, almost two-thirds of American households earn less money today than they did in 2002.

    How do you explain that to the American people?

  • THOMAS PEREZ:

    Well, the issue of real wage growth is one of the most important pieces of unfinished business from the great recession.

    I mean, our — we have a wind at our back, but what we have to do — and the difference between now and the late '90s was that the growth we saw in the late '90s resulted in greater shared prosperity. The rising tide lifted more boats. And what we have to do now is make sure that our tailwind results in shared prosperity.

    And the issue of the stubborn growth of wages isn't simply an issue that is a function of the great recession. This has been a problem and a challenge for literally 30 years. With the exception of the late '90s, we have seen great productivity growth, but it hasn't translated into real wage growth. And for the decades before that, productivity growth and wage growth went hand in hand.

  • JUDY WOODRUFF:

    So, is this a structural problem? Because we have been hearing for some time that the wages are going to come, the wages are going to come, but they're still not coming. And I think the American people are saying, you know, when is this going to happen? It's not translating into a better life, a better life for me, for ordinary people.

  • THOMAS PEREZ:

    Well, for those who are long-term unemployed and are now back to work, it is translating into a better life. And I have met so many people who are in that boat.

    For others, they haven't had a meaningful raise in years. And I refuse to believe that — when I hear the word structural, I think that is frankly all too frequently an excuse for people who don't want to do anything. There's a lot we can do to ensure shared prosperity. And that is why, for instance, we're using our regulatory authority to address the issue of people who work overtime who ought to be compensated for that.

    And that's going to help millions of people. We helped two million home health workers. We're continuing to work in a number of areas to make sure that when people are helping to bake the pie of prosperity in this country, that they share in that prosperity, and it's not fair that we have record profits on Wall Street, but then workers aren't sharing in that profit.

  • JUDY WOODRUFF:

    Well, and what about this other troubling part of all these numbers? And that is the so-called labor participation rate. The percentage of Americans who could be working continues to drop. What's behind that? What's happening and why is this so hard to turn around?

  • THOMAS PEREZ:

    Well, actually, if you look at the last year — and this is actually, I think, a piece of good news.

    Over the last year, the labor force participation rate has been basically flat. It has literally gone between 62.7 percent and 62.9 percent. So you have a flat labor force participation rate, and yet we still see the unemployment rate going down 1.2 percent. And what that means is that the reason why — the main reason why the unemployment rate dipped was that more unemployed people got work.

    If the labor force participation rate had dipped precipitously and we had seen low unemployment rate, that would be a lower unemployment rate for bad reasons. But we have had basically a flat labor force participation rate over the last year. And we see our unemployment rate going down. And, again, the main reason is because more unemployed people are getting work. And that's good news.

    And they're getting work in good jobs. We have more people who are voluntarily quitting their jobs than we have had in years. And that's a good sign, because people only quit their job if they feel confident they can get a better job. And we had something like 2.8 million people voluntarily quit their job last year. It was roughly half of that during the depths of the great recession.

    We have five million openings right now. And that's a sign of a good, robust labor market, with the churn that we need to get people back to work.

  • JUDY WOODRUFF:

    Well, I know it's a picture everybody wants to understand better. And we thank you for coming in to talk to us.

  • THOMAS PEREZ:

    Always a pleasure.

  • JUDY WOODRUFF:

    Thomas Perez, U.S. secretary of labor, thanks.

  • THOMAS PEREZ:

    Always a pleasure to be with you and your listeners.

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