The job losses reported in April were unprecedented in modern times with regard to the magnitude thereof, and surpassed anything seen in the Great Depression period with respect to the speed of the decline.
NEW YORK (PRWEB) May 08, 2020
Following the release of the Employment Situation Report for April 2020 by the U.S. Bureau of Labor Statistics (BLS), the U.S. Private Sector Job Quality Index (JQI)® has been revised to a level of 79.11, down by -0.16% from its revised level one month earlier and reflecting a slightly higher proportion - relative to the prior month - of U.S. production and non-supervisory (P&NS) jobs paying less than the mean weekly income of all P&NS jobs (“Low Quality Jobs”), relative to those jobs paying above such mean.
The JQI going forward will be heavily and uncharacteristically impacted by the unprecedented loss of 18.1 million production and non-supervisory jobs (17.1% of all such jobs) during the month of April due to the COVID-19 global pandemic, with regard to which the following additional special factors should be noted:
- the reference period for the April BLS Employment Situation Report was the pay period ending on the 17th of the month, the impact of job losses through the balance of April are not reflected in the data released today;
- the COVID-19 related job losses reported for April were (as reflected in JQ-Instant™ reading, below) very heavily concentrated in sectors offering Low Quality Jobs, thus dramatically increasing the average hourly wages, average hours worked and, thus, the mean weekly incomes for the group of production and non-supervisory jobs that remain; and
- although not yet reflected in today’s revision of the JQI (due to the one month data lag and the three month rolling average method of reporting the index) the JQI may rise for a period to the extent that such large numbers of Low Quality Jobs have been substantially eliminated, as offset somewhat by the significantly higher benchmark mean weekly income used in computing the index.
The mean weekly wage income of all P&NS jobs as of the current reading (which reflects the level as of March 2020) was $801.80, a change of -0.42% from its revised level the month prior. The JQ-Instant™ preliminary read of the unprecedented 20.5 million decrease in all private sector, non-farm payrolls in April 2020 shows that approximately 79.27% of the loss of such private sector jobs was in industry sectors offering P&NS jobs with an average weekly income below the mean weekly income of all P&NS jobs (i.e. “Low Quality Jobs”). The JQ-Instant read shows that the COVID-19 crisis through mid-April caused widespread losses in Low Quality Jobs, but that job losses in April had extended further into the higher-wage/higher hour sectors than those of the prior month (especially in construction and transportation manufacturing).
Daniel Alpert, co-creator of the U.S. Private Sector Job Quality Index, said, "The job losses reported in April were unprecedented in modern times with regard to the magnitude thereof, and surpassed anything seen in the Great Depression period with respect to the speed of the decline. The details of these job losses lay bare the dependence of the U.S. employment situation on low-wage/low-hour employment with nearly 80% of the losses in April coming from sectors offering such jobs. This produced bizarre statistical outcomes like month-over-month increases in average hourly wages and weekly incomes of 4.7% and 5.0%, respectively, during this debacle, as low paying jobs were eliminated by the tens of millions since February."
For an explanatory video on the JQI, please see: http://www.vimeo.com/jqi.
This news release presents data from the most recent JQI reading calculated through the month immediately prior to the month covered by this release. The JQI assesses job quality in the United States by measuring desirable higher-wage/higher-hour jobs versus lower-wage/lower-hour jobs. The JQI offers a near-real time analytical tool to policymakers, researchers and financial market participants with relevance to a variety of trends in the economy at large. The JQI analyzes a representative sample of the economy using production and non-supervisory job (P&NS) data from 180 different industry groups spanning across all 20 super-sectors into which the BLS groups establishments. The principal data utilized is contained in the Current Employment Survey (CES, also often referred to as the establishment survey) P&NS data on average weekly hours, average hourly wage and total employment for each given industry group (seasonally adjusted, in all cases). The JQI is updated on a monthly basis contemporaneously with the release of new CES data from the BLS.
The JQ-Instant reading is for the month covered by this release and has implications for the likely direction of the JQI itself in future months. As the JQI is reported as a three-month rolling average of actual monthly readings, significant imbalances (readings varying from an even distribution between high and low quality jobs) in the JQ-Instant results would suggest future JQI readings moving in the direction of the dominant side of such distribution.
The U.S. Private Sector Job Quality Index (patent pending) is a joint development of the Program on the Law and Regulation of Financial Institutions and Markets at the Jack G. Clarke Institute of Cornell Law School, the University of Missouri Kansas City Department of Economics, the Coalition for a Prosperous America, and the Global Institute for Sustainable Prosperity.
For more information, and to read the full report, visit https://www.jobqualityindex.com/.
©2020 JQI IP Holdings LLC. “Private Sector Job Quality Index” and “JQI” are registered trademarks of JQI IP Holdings LLC. The Private Sector Job Quality Index is patent pending, application number US 62/900,923. Cornell logo and Cornell Law School and Jack G. Clarke Program names and references used with permission.