But now that’s changing. Over the past few years, the unemployment rate has fallen precipitously for less-skilled and less-educated workers. The jobless rate for workers without a high-school diploma has dropped from 8 percent as of December 2016 to 6.8 percent last month, while it dropped from 2.3 percent to 2 percent for workers with a college degree over the same time period. Low-wage workers are also seeing big increases in their earnings, compared with middle-income workers, and the poverty rate is declining too. The long-term jobless, people with criminal records, individuals with a disability—they are getting hired, despite some economists’ fears that they would remain structurally unemployed even in a hot labor market.
A number of trends have coalesced to boost the fortunes of the working classes. In announcing that it would move its wage floor up to $11 an hour and expand its paid maternity and paternity leave policies, Walmart pointed to Trump’s massive corporate tax cut. “We are early in the stages of assessing the opportunities tax reform creates for us to invest in our customers and associates and to further strengthen our business, all of which should benefit our shareholders,” Doug McMillon, Walmart’s chief executive, said in a statement. “However, some guiding themes are clear and consistent with how we’ve been investing—lower prices for customers, better wages and training for associates and investments in the future of our company, including in technology. Tax reform gives us the opportunity to be more competitive globally and to accelerate plans for the U.S.”
But labor experts and economists are skeptical, characterizing this framing as more a marketing ploy than anything else. “With the labor market tight, most employers have been raising pay, especially now that states covering one-fifth of the U.S. workforce are phasing in $15 minimum wages,” said Christine Owens, the executive director of the National Employment Law Project, in a statement. “This low-ball announcement by Walmart after the corporate tax give away looks more like a ploy to promote the myth that corporate tax cuts are what raise wages.”
One key piece of evidence that it’s the economy, not the tax cut, pushing up Walmart’s wages: Other retail companies that Walmart competes with have already done so. Target, for example, boosted its starting wage to $11 an hour in October and has vowed to move it up to $15 by 2020.
Much the same is happening economy-wide. Businesses are struggling to fill vacancies, with nascent signs of labor shortages in a number of industries, among them healthcare and construction. “As the labor market has tightened, employers need to shift their strategies for hiring workers,” wrote Jed Kolko, the chief economist at the job-search firm Indeed.com, in a research note. “Some firms will offer higher wages; some will loosen their hiring requirements or invest more in training. This helps less qualified workers, who might now be considered for jobs that would have been out of their reach earlier in the recovery. That’s one reason why the biggest gains in employment in 2017 have gone to workers with less education.”