Red States Lag Blue in Opportunity Work, Muting Impact of Job Gains Nationally

Indeed chief economist Tara Sinclair previews the upcoming jobs report and shares how opportunity jobs are distributed across the US.

We expect Friday’s jobs report to show continued strength in employment gains, but will these added jobs satisfy and provide opportunity to American workers in the long run?

Last month, the US economy added a surprising 287,000 jobs and promisingly, we saw roles being added in areas with higher wage growth and salaries, namely, healthcare and financial services. There were job gains in other areas, like hospitality, which is good, but these roles tend to be lower paying, so the lasting impact on the economy is less strong.

If the upcoming report shows that we added over 150,000 jobs, a figure we’ve been able to post regularly since the end of the recession, that will show continued strength in the US labor market. But to see gains in jobs where people can have well-paying, sustainable jobs will be even better. In an election season, this is all the more important.

Blue states have better job opportunities than red states

Addressing the strain of worker discontent around slow wage growth and relatively low salaries is a significant piece of both the Democratic and Republican party platforms this year.

In fact, when we look at jobs where there has been wage growth and strong salaries — what we call opportunity jobs — we find there are notable differences along electoral lines. Strikingly, the so-called blue states have a larger share of opportunity job postings than the red states, and the swing states fall in the middle.

 Red StatesBlue StatesSwing States
Share of opportunity jobs (weighted average)32.8%41.4%35.1%

In short, the balance is off, and may impact not only how workers are feeling in these states but how they will vote in November.

Our latest research estimates that, as of last year, only 15% of the US workforce are in jobs where wages have grown in pace with inflation over the past decade and where annual pay is at least above the median income of US households in 2000. These are our opportunity jobs, which overall face less automation and surprisingly less competition per role.

Good jobs are there, but filling them is the challenge

While only 15% of current employment demonstrate high and rising pay, our recent report shows that these same jobs account for a whopping 35% of job postings.

In the research, we argue that job seekers, employers, and policymakers must keep working to connect people to these roles — further demonstrated by the partisan split between states where good opportunities are concentrated and those places where they are more scarce.

Tomorrow, we’ll be watching for wage gains to continue building on last month’s promising increases. Wages act as a strong incentive for potential workers, not just those who are ready to apply for a job now but those who are planning for a future career. Even though these “opportunity jobs” have higher pay, our findings suggest that they might still not be paying the right amount to attract enough potential candidates. And because many opportunity jobs require high skill levels and some degree of advanced training, it may increasingly fall to employers to prepare people for the jobs they struggle to fill.

Consensus Numbers

 PriorConsensusIndeed Outlook
Nonfarm Payrolls (M/M Change)287,000185,000Agree with consensus
Unemployment Rate 4.9%4.8%Agree with consensus
Average Hourly Earnings
0.1%0.3%Slightly below consensus

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