70% Of Jobs Added In January Were Minimum Wage Waiters And Retail Workers

Tyler Durden's picture

For those curious where the big jump in earnings came from, the answer appears rather simple: the reason, according to the BLS' breakdown of jobs added in January (per the Establishment survey), of the 151,000 jobs added in the past month, retail trade added 58,000 jobs in January, while employment in food services and drinking places, aka waiters and bartenders, rose by 47,000 in January.

In other words, 70% of the job gains in January went to minimum wage workers.

So how does one explain the snap higher in January wages?

Simple: state regulations demanding higher wages for minimum wage workers starting January 1, which as discussed previously will promptly lead to employers passing on wage hikes costs to consumers in the form of 10% higher food prices starting in NYC and soon everywhere else.

This is the full breakdown of January job gains:

  • Retail Trade: +58K
  • Leisure and Hospitality, which includes food workers: +44K
  • Professional and business service workers, excluding temp workers: +34K
  • Manufacturing workers posted a curious rebound, rising by +29K. We are confident this number will be revised promptly lower.
  • Construction +18K
  • Wholesale Trade: +9K
  • Education and Health saw a big and unexplained drop from 54K to 6K
  • Information services added just 1K workers
  • As for sectors losing workers included Temp Help workers, Transportation and Warehousing (courtesy of the truck and train recession), Mining and Logging, and Government workers.

Bottom line: the big sequential bounce in wages was driven entirely by the January minimum wage increase, and the low December base effect. Expect this sequential increase to renormalize in February when the base now reflect higher minimum wages.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Heffer's picture

What is the big deal, everyone can live well off $8.25 per hour.

 

/sarc

 

 

 

 

Shocker's picture

You can't replacing actually making something ( Manufacturing ) with only Retail and expect great results.

Job Situation: http://www.dailyjobcuts.com

-

Looney's picture

What will happen to all those bartender jobs when someone invents a way to get drunk as a skunk just by touching an iPad screen at home?  ;-)

Looney

VinceFostersGhost's picture

 

 

 

Why would I want to be a waiter...when I can just swipe my EBT?

 

Got the training manual here...

https://www.youtube.com/watch?v=NzspsovNvII

Croesus's picture

@ Heffer: 

Soon, we'll see the day where the ZH comments section gets spammed by: 

"I'm living in NYC, on $7.15/hr; Here's how I do it (insert link)". 

MillionDollarBonus_'s picture

Here we go again with the completely insulting insinuations about Service Professionals. Service Professionals actually have to demonstrate a much wider variety of skills than the majority of supposedly 'high status' jobs in fields like engineering, management or accounting. You need to be punctual, you need be able to deal with customers on a face-to-face basis, and you need to be able to deal with many complex mental tasks in order to provide efficient and satisfactory service. A lot of these jobs also have long hours, so you also need incredible endurance. This combination of skills puts most 'high status' works to shame, and clearly demonstrates the flaws in capitalism. Why should these works be paid less than some manager who just sits on his arse all day why the workers work 14 hour shifts! It's an absoluteoutrage, and the ONLY presidential candidate I see pointing this out is Bernie Sanders, which is why he has my vote no matter what.

Clint Liquor's picture

Once again, Health. Obamacare forced growth in this sector with the people who do not have to pay for it, using the shit out of it.

The9thDoctor's picture

Despite this awful jobs report, rent and monthly mortgage payments are magically at all time highs.

Something has got to give.

Bill of Rights's picture

Ahh so you're a Socialist Pig...noted.

Killdo's picture

very true - most people I know who work as managers in the US don't seem to know what they are doing - they just know how to appear competent. The worst ones I saw were project managers in DC

illyia's picture

Also, this will cause inflation.

Another plus.

CheapBastard's picture

Pleeze pass da Doritos while I watch that EBT youtube, Vince.

Friedrich not Salma's picture

Bernie Sanders is going to raise minimum wage to $15/hour. Soon the service professionals will earn more than those high brow engineering and accounting folks who are finding their jobs sliding away to India.
"Bernie!"
"Bernie!"
"Bernie!"

mc225's picture

this is actually closer to the truth than sarcasm. ymmv

zeronetwork's picture

Soon we will be doing exactly what Chinese were doing 25 years ago.

making rubber duckies in american factories for Chinese to have it in their bathtubs.

youngman's picture

I actually think this is where the USA is going....dumbing down and lowering the standards of living to the point where people will be happy with a $1 a day type of job.....so we can compete with the new 4 billion people that will be on the earth by that time....

LawsofPhysics's picture

I suggest that everyone do a little homework on something called carrying capacity. 

Remember, eCONomics is in fact a social science, not a hard science.

The laws of nature and physics are what they are and they are in fact non-negotiable...

get long soylent green.

illyia's picture

carrying capacity....

Hmmmm... interesting concept. Is that anything like 'supply-side economics'? Otherwise known as 'trickle-down'?

So: The 'carrying capacity' of any worker drone is directly proportional to the profits of the Queen (or King) Bee?

Like the 'increasing productivity' thingy Goldylocks Greenspan's buddy Kudlow used to talk about?

(I have got to tell Samantha about this!!!)

;

http://www.tbs.com/videos/full-frontal-with-samantha-bee/season-1/extras...

 

LawsofPhysics's picture

Allow me to simplify for the morons out there...

That which cannot be sustained, won't be, period.

Now go be productive worker bee!

new game's picture

middle class shrink, and it is climbing the ladder to upper middle. i personnely know two recent layoffs of people that thought they were above the fray. I laugh because i said this to my wife, but it took two years longer for it to actually happen...

skrink wrapped and ready to crawl down the ladder to a teller job, waiter/ress, shit service job, or whatever, even cleaning the home of an oligarch!-ha...

CheapBastard's picture

Over 68,000 oil and gas engineers fired in Houston alone. Most Houston MSM SpinMeisters in December said the oil drop "Is contained to the energy sector" ... "won't have much effect on the rest of Houston 'cause it be diversified."

 

Declining oil prices causing trickle-down effect in local economy

 

TOMBALL, Texas – The price of oil continues to drop.

In addition to job cuts, the declining industry is also impacting other businesses and ventures across the greater Houston area.

One example is the Peck Station development project in Tomball.

Located near the Baker Hughes campus in Tomball, the $50 million project is supposed to include apartments, a hotel, retail, and office space.

Although work continues on underground infrastructure, corporate realtor Damon Palermo said some plans are on hold indefinitely.

 

http://www.khou.com/story/news/local/2016/01/18/declining-oil-prices-cau...

 

 

Oil Slump Hits Houston Home Market

 

http://www.wsj.com/articles/oil-slump-hits-houston-home-market-1453163797

 

Whenever I hear the phrase "It's contained," Whether it's Obama, Bernanke, Greenspan or MSM, better run for cover! Reminds me when a broker told me in the late 1990's that "Enron is solid as a rock."

 

 

 

mc225's picture

i'll bet you that rent in houston hasn't gone down...

0x445442's picture

Yeah, I saw this 25 years ago when the politicians were trying to sell the idea that their trade policies were aimed at bringing the rest of the world up to our standard of living.

A nice notion if you don't understand simple math. The U.S. consumed such a disproportionate amount of the worlds goods and resources as a function of our population size that it was simply impossible for the rest of the world to be bouyed up to the U.S. standard of living.

The only was standard of livings were going to normalize is for the U.S.'s to go down, way down.

Countrybunkererd's picture

I saw it 6 years later than you.  This will not end well, but it will end.

MillionDollarBonus_'s picture

This blog is seriously offensive towards Service Professionals! SAD!

new game's picture

bernie for prez, than we can all be in the service economy, servicing the accounts and cards that give us all a free ride. hey, that could take up 2-4 hours / day dealing with a goverment wank to keep the freebies coming. service, baby service straight from the gov.org to my account...

Countrybunkererd's picture

Just add zero's to everyone's account, mint 60 shiny 10,000,000,000,000.00 coins and be done with it.  I mean, kruggie is right, nothing to see here, move along.  WE in the tower know what is best for you, so shut up or you will be shot at dawn.

White Mountains's picture

...or invents a way to get drunk at home?

NidStyles's picture

...or invents staying sober and getting in good shape isntead... "GASP!!"

American Psycho's picture

but you can't try to "take your ipad" home when you get drunk. 

Digmen1's picture

Yes, these economists who talk about a service based economy are idiots.

You have to have something/soeone to service!

When a manufactuer closes you/we also lose jobs that support it, eg elecricians, advertsiser companies, office eqipment, it support, plumbers, delivery men, and local body rates/taxes.

 

 

 

Hal n back's picture

don't forget annual pay increases go into effect 1/1/16 anyway. CEOS and managers get their 5% base rate increase and that skews everything.

what's that smell's picture

minimum wage?.....

we don't need no stinkin' wage!

do you know how many clowns, cannibals, and dead hookers they refuse to count?!

...and what about the ayn rand fanboys?....do they count them?

Pig Circus's picture

58,000 retail jobs added was all I had to hear to know this report is more made up bullshit.

 

trucker aint trucking, ships aint shipping rails aint railing retail aint retailing but retails is hiring...Total made up bullshit.

ejmoosa's picture

Retailers always add more staff after Christmas.  There's a lot of unsold shit to inventory and mark down.

Ms No's picture

Yep, January is a slow consumer month, nobody hired 58,000 service industry workers and sure as hell 19,000 construction workers were not added in January.  I don't know how long they can keep getting away with these ludicrous stories.

Countrybunkererd's picture

What percentage of the US population knows the difference between a bull and a bear market?  What percentage of the US population knows what really would happen if minimum wage was set at 15 bucks an hour?  Worse still, what percentage of them even care?

Vlad the Inhaler's picture

Minimum wage adjusted for inflation peaked in 1967, but we all know the inflation numbers are BS, so basically the lowest paid workers haven't gotten a raise since Leave it to Beaver was on prime time.

FireBrander's picture

I don't get it, every month it's a 5 or 6 figure "minimum wage jobs added" number...shouldn't we all be making minimum wage by now?

 

A person has a minimum wage job.

They quit that job.

They take another minimum wage job.

Are they counted in the total "jobs added"?

 

This feels like "McDonlads to hire 50,000 people"....because 55,000 quit last month and now work at Subway...

lakecity55's picture

The way it's counted is this: 1 person works 3 P/T jobs, so the employment stats show 3 jobs created!

Forward, Soviet!

new game's picture

it is the same people job hopping being counted again and again, seriously, i'm one of them...

i am 3 people in the last year alone...

Countrybunkererd's picture

That really sucks.  More and more of us will be doing that going forward... OH NOW I GET ODUMB@$$'s word choice!!!  Anyway, it is very important for people to know what their needs are compared to their wants prior to having 3 jobs.  Either way, i feel for you.  I jumped ship in 08 and jettisoned (sp?) all debt possible.  Survived on 21K (w/ wife and no kids) a year for 18 months.

Countrybunkererd's picture

I am thankful...very very very thankful my wife sees it and understood why we had to do it.  We are better now, but willing to dump anything necessary with little pain of loss.  All we have is "stuff" and nothing more.

tarsubil's picture

If these debt serfs can't afford food, let them eat the elites' leftovers after closing time.

sgorem's picture

"If these debt serfs can't afford food, let them EAT THE ELITES after closing time."

open-range's picture

My last pay check was $9500 working 12 hours a week online. My sisters friend has been averaging 15k for months now and she works about 20 hours a week. I can't believe how easy it was once I tried it out. This is what I do... www.wallstreet34.com