Job Machine Hits Higher Gear
In latest sign of prosperity, living standards rise as record number of adults find work.
The United States has reached a new economic threshold: Proportionately more American adults are working than at any time in history.
Moreover, their wages have gone up enough to substantially beat inflation. As a result, living standards are rising - especially for families at lower income levels, giving many extra money for a new car or dinner out.
"Most of my friends have gone back to work," says Rhonda Coulon, a single mother in San Pedro, Calif., who rejoined the labor force last May after four years on welfare.
Ms. Coulon, a counselor for those trying to get rid of drug habits, can now afford to take her two toddler boys out for treats. "We can go out as a family once a week and do something for the children," she says. "Our Christmas was incredible."
It's not just welfare moms who are pushing up the percentage of working adults. It is older men, married women with or without children, teenagers 16 and over, Hispanics, and especially blacks.
* The percentage of working adults hit 64.2 percent last month, up from 62.5 percent a year earlier - considered a dramatic jump.
* Some 59.2 percent of adult blacks were working in January, up from 56.5 percent a year earlier.
* Among those with a college education, more than three-quarters - 78.7 percent - are working. The ratio drops decidedly for those with less education.
All are taking advantage of the tightest labor market in decades, one that could get tighter. Federal Reserve Chairman Alan Greenspan warned Feb. 24 that the nation "will gradually run out of new workers who can be profitably employed" unless the economy slows or productivity accelerates.
Manpower Inc., in its quarterly hiring outlook survey, found that 30 percent of businesses expect to recruit additional workers during the second quarter of this year. That's up from 28 percent for the same period last year. Moreover, only 5 percent of the 16,000 employers polled by the Milwaukee-based temporary-help company anticipate staff cuts.
For workers, that's great news.
"People benefit from having more jobs available and being able to bargain for better conditions," notes Helene Jorgensen, an economist with the AFL-CIO, the labor federation in Washington.
The real hourly wages of the median worker - the individual at the level where as many employees are paid less as are paid more - was 2.2 percent higher in 1997 than in 1996. The person whose wage was 10 percent above the bottom did even better. His or her wage was up 3.2 percent, perhaps helped by an increase in the federal minimum wage level.
The majority of workers have had their first "meaningful" wage growth since 1989, says Jared Bernstein, an expert at the Economic Policy Institute, a Washington think tank. At the top of the wage scale, the gain was only 1.5 percent.
This is a reversal of the income-distribution pattern of the past two decades or so, when the rich were getting richer and those with moderate and low incomes suffered wage losses or no gains. "There is still catch-up to do," says Mr. Bernstein. The median hourly wage after inflation remains 3.2 percent below its 1989 level.
Part of the recent wage gains may be the result of longer work hours. The average middle-class family with two children put in 19 percent more hours in 1996 than in 1979. In some cases, that's because more family members work. "This family is working harder," says Bernstein.
Give me time at the beach
This does cause hardships. In many families, women especially complain that between the office and housework they have little time for relaxing.
"It's like working two jobs," says Coulon. "We take care of our job and then we come home and take care of our families. I get up at 5 o'clock in the morning and work until 11 o'clock at night. But I feel good about it."
With so many women and other family members working, child care is getting more difficult to get. An AFL-CIO survey of working women found 40 percent saying "affordable" child care was harder to find than a few years ago, which is one reason President Clinton has been trumpeting the issue in Washington.
Still, in general, economists see benefits in the tight labor market:
* More workers appear to be moving out of so-called nonstandard jobs - such as contract work, self-employment, and temporary positions - into more "regular" occupations. Workers with nonstandard jobs make up 30 percent of the labor force, according to the Census Bureau.
Most of these contingent workers are women. Most get paid about 20 percent less and get fewer health and other benefits than regular, full-time employees.
* The economy seems to be absorbing new workers without adding to inflation. Many laborers are getting the work experience and training that can boost productivity and thereby hold back price increases, notes Gordon Richards, chief economist of the National Association of Manufacturers.
* James W. Blair contributed to this article from Los Angeles.