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August Jobs Report Shows Recovery Is Finally Trickling Down to Least-Educated Workers

For the first time, there is evidence that the rising economic tide is lifting up even the least-educated workers.
Thanks to hard-working American employees (plus flat wages and low energy costs), the U.S. is No. 2 is global manufacturing, a new study shows.
Thanks to hard-working American employees (plus flat wages and low energy costs), the U.S. is No. 2 is global manufacturing, a new study shows. CHRISTOPHER ALUKA BERRY / Reuters

Coming on the heels of a higher-than-expected GDP growth figure for the second quarter, the August jobs report gave more validation to the continued strength of a historically long economic recovery. For the first time, there is evidence indicating that this rising tide is lifting up even the least-educated workers.

Overall, the Bureau of Labor Statistics showed an increase of 156,000 jobs and downward revisions of both June and July, for an average of 185,000 new jobs a month over the past three months. The overall unemployment rate ticked up by one-tenth of a percentage point to 4.4 percent.

“At this pace, unemployment, which is already low, is going to fall lower and it’s on track to go below 4 percent by this time next year,” said Mark Zandi, chief economist at Moody’s Analytics.

“Although the top line figure was slightly short, the labor market is fundamentally strong,” said Andrew Chamberlain, chief economist at “Viewed in the broader context of other labor market indicators, today’s report should generally be seen as positive.”

Behind those moderately encouraging numbers, another story emerged: August was a boon for the least-educated sector of the labor market. The unemployment rate for workers with less than a high-school diploma fell to 6 percent from 6.9 percent in July. Economists caution against reading too much into a single month’s data, but in this case, a year-over-year comparison also shows steady improvement, with the unemployment rate falling from 7.3 percent from August 2016.

“That’s a quite significant drop, even for folks that have faced structural problems” reaching full employment, Harry Holzer, a professor of public policy at Georgetown University, told NBC News.

The types of jobs that were added in August could hold a clue to the improving fortunes of this segment of the workforce. According to the BLS, manufacturing added 36,000 jobs in August, construction employment rose by 28,000 and mining jobs grew by 7,000. Even retail, a category that has taken a beating in recent months, got a breather. Retail jobs were mostly flat for August on the strength of increased employment at building material, garden supply and furniture stores, which contributed nearly 8,000 jobs.

Released two days earlier, ADP’s monthly payroll report yielded similar findings. Although ADP charted a slight drop in natural resources and mining jobs, the goods-producing category overall rose by 33,000 for the month, buoyed by gains of 18,000 and 16,000 in construction and manufacturing, respectively.

“They are consistent with the story that many parts of the labor market are tightening up and demand is strong, and construction and manufacturing, as we know, are relatively good paying jobs for non-college workers,” Holzer said. “You hear reports of employers having difficulty hiring in those sectors.”

An Uptick in Blue-Collar Jobs

Elise Gould, senior economist at the Economic Policy Institute, said there is still room for improvement, though, pointing to recent slides in the gains made by young workers and black workers.

“When you think about wanting to reach all corners of the labor market, you think about… those people that historically have had elevated unemployment rates,” she said. “Those are the ones that are batted around the most, and those are the ones that stand to gain the most,” she said.

There are some nascent signs that these gains might finally be coming in the form of higher wages.

Overall, BLS data shows wage growth stuck at an annualized rate of 2.5 percent. “I think that’s slowly picking up — it just takes time,” Zandi said. “Workers are out of practice asking for pay increase.”

Even with sluggish overall wage growth, though, data from shows that jobs with the fastest wage growth today are often blue-collar occupations.

Pay for truck drivers and baristas are both up 5.7 percent, year over year. Wages for cooks and servers have gone up 4.7 percent and 3.3 percent, respectively, and cashier pay has risen by 3.7 percent.

“For low-educated workers, certainly workers without a degree would be disproportionately represented in construction and trades,” Chamberlain said. “That’s generally a very positive sign that we’re seeing some of that today.”

But Is it a Trump Bump?

Economists said it was too early to credit Donald Trump and Congress for the increases, given the near-gridlock on many flagship legislative goals.

“Clearly the new administration wants to bring jobs home,” said Scott Wren, senior global equities strategist for Wells Fargo investment Institute, but he cautioned that success in this area should be viewed as a marathon rather than a sprint.

“To reverse the trend is going to take some time, and I think it’s going to be an uphill battle,” he said.