Addressing The State Of The Union's Job Market

On the occasion of the July jobs report, Ari Shapiro speaks with Labor Secretary Thomas Perez about the growth in hiring and what that means for the U.S. labor market.

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ARI SHAPIRO, HOST:

And we're joined now in the studio by Labor Secretary Tom Perez. Welcome to the show.

TOM PEREZ: Always a pleasure to be with you, Ari.

SHAPIRO: So all in all, a good unemployment report, but 6.2 percent unemployment is still higher than we would expect to see in a healthy economy. Is this the new normal, or how much farther is there still to go? What's the baseline that you're looking for?

PEREZ: Well, this isn't the new normal but it's important for listeners to appreciate that we've come a long way. The last two months of the Bush administration we lost 1.5 million jobs total. We now have six months in a row of growth over 200,000 jobs. That hasn't happened since 1997. You look at where the growth is - the industry cluster that has seen the most growth in the last year has been professional and business services. These are architects, engineers - well-paying jobs. Manufacturing is continuing to see very solid growth. So we have broad-based growth, but we still have work to do. And one area where we have work to do is to make sure we're growing wages because too many people are working hard but falling behind.

SHAPIRO: One weak spot in this latest job report is part-time workers who want full-time work and can't find it - more than 7 million Americans are in that position. What can be done for the group of people?

PEREZ: Well, the number of Americans who are working part-time and want to work full-time has actually gone down by about 600,000 in the last year, but it's still too high. And, you know, an example of something I want to see moving forward, and I watch very carefully, is in the manufacturing sector because right now we have 42 hours a week on average in the manufacturing sector. In other words, folks on average are working overtime. What I want to see happen is I want to see that number come down to, say, 40 hours because what that means is that people are hiring more folks because they have a confidence that they can take on a full-time employee. And when that happens, then more part-time workers will move up to full-time work.

SHAPIRO: What percentage unemployment rate does that start to happen? We're at 6.2 percent now. When do you expect to start seeing the kind of changes you're talking about?

PEREZ: Well, I think it's going to happen and it is happening in various sectors. But, you know, different sectors have a different level of robustness right now. And so, you know, the construction sector for instance - we've had a good last year, but we've only recovered roughly 30 percent or so of the jobs that were lost in the great recession. So we have work to do. So there are too many construction workers that are out of work. That puts downward pressure on wages. In other sectors we've recovered quite a few more. And in the manufacturing sector, as a result of our investments in things like apprenticeship, we're building that cadre of middle-class jobs that are paying a middle-class wage right now.

SHAPIRO: Your administration colleague, Jason Furman, who runs the Council of Economic Advisers gave a speech couple of weeks ago where he said the fact that the African American unemployment rate is 87 percent of the way back to it's prerecession level is of little comfort when that prerecession level averaged 9.8 percent. Does the government have a duty to target job creation measures specifically for those demographic groups that had higher unemployment rates before the financial crisis hit?

PEREZ: Well, I think we want to get a job for everybody, and that's been our focus. And what we need to understand is you take the job-seeker as you find them. And by that I mean there are some people that walk into an American job center, and they have a college degree, and they need a little help dusting off their resume - getting a few job leads. There are other people who walk in and they have other barriers. In 1950 the labor force participation of young African-American men - that's aged 16 to 24 - 65 percent were working. In 2012 that figure was 37.3 percent. That's unconscionable. And...

SHAPIRO: Why is that?

PEREZ: Because public policy has created a subclass here in so many cases where you see the public policy that's resulted in the unnecessary incarceration of African American men. You see the K-12 education system has failed communities of color.

SHAPIRO: So this is obviously a much broader conversation than just jobs. But from your position, as the Secretary of Labor, do you think the government has an obligation to target job creation measures specifically to these groups?

PEREZ: Well, we target our job creation measures to have an acute appreciation for what the barriers are. So for instance, the My Brother's Keeper Initiative is expanding opportunity for so many people by, for instance - you know, when you address the crack-powder disparity as Congress did in a bipartisan fashion, you help a broad array of people but you disproportionately help African-Americans and Latinos because their incarceration rates are so high. Through these targeted investments, I think we're going to grow our economy. And it's a demographic imperative because we can't leave African-American kids and Latino kids and Asian kids and kids who reside in rural America - we can't leave them at the side of the road.

SHAPIRO: Labor Secretary Tom Perez, thanks very much.

PEREZ: Thank you.

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