Tight labor market rising wages and the great

Tight labor market, rising wages, and the great stabilization Consensus Economic Forecasting Commission October 27, 2017 Glenn Mills Chief Economist Center for Workforce Research Maine Dept. of Labor www. maine. gov/labor/cwri Glenn. mills@maine. gov 207 -621 -5192

Unemployment remains historically low, at or below 4% for 24 months through September

The cyclical effects from the downturn on labor force participation are mostly over; the structural effects of an advancing population age structure will limit the rise

Payroll job growth continues, though it has slowed since unemployment reached very low rates

Job growth since 2000 has been historically low, reflecting the lack of young people aging into the workforce Nonfarm Payroll Jobs (in thousands) 650 600 2017 2016 550 2010 500 2000 450 1990 400 1980 1970 350 1960 1950 300 1940 250 200 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

In the 1990 s most job growth was in healthcare and professional & business services, offsetting manufacturing declines 110 000 100 000 Manufacturing 90 000 Retail Trade 80 000 Healthcare Leisure & Hospitality 70 000 Local Government 60 000 Professional & Business Services 50 000 Financial Activities 40 000 State Government Construction 30 000 Trans, Warehouse, Utilities 20 000 Educational Services Wholesale Trade Federal Government 10 000 0 Information янв- янв- янв- янв 90 91 92 93 94 95 96 97 98 99

In the 2000 s growth in healthcare slowed and manufacturing declines accelerated 110 000 100 000 Healthcare 90 000 Retail Trade 80 000 Local Government Leisure & Hospitality 70 000 Manufacturing 60 000 Professional & Business Services 50 000 Financial Activities 40 000 State Government Construction 30 000 Educational Services 20 000 Trans, Warehouse, Utilities Wholesale Trade Federal Government 10 000 0 Information янв- янв- янв- янв 00 01 02 03 04 05 06 07 08 09

This decade has been the great stabilization in most sectors, including manufacturing for the first time in four decades. We largely expect this trend to continue for the next several years. 110 000 100 000 90 000 80 000 Healthcare Retail Trade Leisure & Hospitality Professional & Business Services 70 000 Local Government 60 000 Manufacturing 50 000 Financial Activities Construction 40 000 State Government 30 000 Wholesale Trade 20 000 10 000 0 янв-11 янв-12 янв-13 янв-14 янв-15 янв-16 янв-17 Educational Services Trans, Warehouse, Utilities Federal Government Information

A record $26. 4 billion in wages were paid in the year through June $25 $23 $21 $19 2017 Q 2 $ Current $ $17 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 $15 2001 Total Wages Paid (in Billions) $27

Inflation-adjusted wages are up sharply to an average of $43, 500 per job in the year through June $43 000 $42 000 $41 000 $40 000 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 $39 000 2001 Average Annual Wage in 2017 Q 2 $ $44 000