New jobs that are being created pay less and offer fewer work hours than the ones they have replaced.
When it comes to jobs, it’s not just quantity that matters–it’s also quality. It’s great news that the economy is finally producing jobs again–even if it’ll take another few years of this kind of growth to get us back to where we were before the Great Recession. But that also means it’s now time to ask what kind of jobs are being created. And on that front, things are a lot less encouraging.
Several recent studies suggest that the new jobs pay less and offer fewer work hours than the ones they have replaced. Let’s look at the numbers:
• Lower-wage industries — things like retail and food preparation — accounted for 23 percent of the jobs lost during the recession, but 49 percent of the jobs gained over the last year, a recent study (pdf) by the National Employment Law Project found. Higher-wage industries, by contrast, accounted for 40 percent of the jobs lost, but just 14 percent of the jobs gained. In other words, low paying jobs are increasing as a percentage of total jobs, while high-paying jobs are on the decline.
• Meanwhile, the percentage of those working who have part-time jobs and want full-time ones surged in mid-February to 19.6 percent — almost as high as it was a year ago before the recovery began, according to Gallup numbers. That suggests, of course, that a large number of the new jobs created over the last year are part-time.
• And a recent Wall Street Journal analysis found that even though productivity rose 5.2 percent from mid 2009 to the end of 2010, wages increased by just 0.3 percent. That means only 6 percent of productivity gains were shared with workers. In past recoveries, that figure has averaged 58 percent. This time around, far more of the gains went to shareholders, in the form of profits, which are at record levels.
There are no easy answers for how to fix the problem. Some argue that workers need more clout in their relationship with employers, something that would require a renaissance of private-sector labor unions, which have been on the decline for the last half-century. But that prospect looks unlikely: Indeed efforts are underway in several states to make public-sector unions as weak as their private-sector counterparts.
Still, as the economy continues to add jobs in the coming months, it’s worth keeping the issue of quality in mind. An economy with a glut of low-paying and part-time jobs isn’t an economy that’s working for most Americans.