Jobs are easier to find, but good paychecks remain scarce

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For millions of Americans, it's getting easier to find a job than it's been in years. But many of them are having a hard time finding one that comes with a good paycheck.

Some seven years after the Great Recession ended, U.S. payrolls continue to expand at a healthy clip.

On Thursday, the government reported that first-time applications for unemployment benefits fell to the lowest levels since 1973. In the time since the recession ended, some 14 million new jobs have been created and roughly a quarter million new paychecks are being produced each month.

That strength in hiring also has prompted millions of Americans who had given up looking for work to resume their job hunt. Between September and March, some 2.4 million people entered or re-entered the government's official count of the workforce job market, the second-largest six-month increase on record.

But the biggest jump in the so-called labor force participation rate is coming from those with the lowest level of education and job skills — taking on some of the lowest-paying jobs.

That may help explain why voters in this year's presidential campaign report deep frustration and anger about the state of the U.S. economy. In a recent Gallup poll, just 42 percent of those who responded said they believe now is a good time to find a good job — but that was up from 8 percent in late 2009.

Economists point to steady job gains as a sign of strength in the U.S. labor market. But a closer look at where those jobs are coming from helps explain why many voters aren't convinced. Last year, the fastest-growing job category was for leisure and hospitality workers, who earned an average hourly wage of $14.10, according to an analysis of government data by Capital Economics.

Growth was much slower in higher-wage job categories like information or professional and business services

That growth has accompanied the return of so-called discouraged workers, many of whom are only qualified for low-wage work.

"Although the rebound appears to have been fairly broad-based, with participation rising for both men and women and for all age groups, when broken down by education, the rise has been concentrated among lower-skilled workers," said Andrew Hunter, an economist at Capital Economics.

Low-skilled workers also face much slower growth in the pace of wage gains than better-educated job seekers.

Since 2005, the median weekly wage for all workers has risen to $872, a gain of $176, according to the latest government data. For those with an advanced degree, the median wage rose during that period to $1,445 a week, up $269. Those with less than a high school degree saw their weekly pay rise to $502, a gain of just $98.

That means that strong growth in low-skilled jobs will continue to suppress overall wage growth. It may also help explain why consumer spending, which makes up some two-thirds of U.S. economic growth, has been sluggish. The government recently reported that overall economic growth slowed from 2.0 percent in the third quarter to just 1.4 percent in the fourth quarter on an annual basis.

It's not clear whether the slowdown is a temporary pause or a sign that the job market may also begin slowing along with it.

"Job gains have been holding up but unless growth improves, the monthly payroll increases could slow as we move toward the summer," said economist Joel Naroff in a recent note to clients.

The pace of job and wage gains remains a major focus of Federal Reserve policymakers as they continue to debate whether, and how rapidly, to raise interest rates. With inflation running below the central bankers target rate of 2 percent, a pickup in wages could signal that inflation may be headed higher.