New jobs disproportionately low-pay or part-time

The 162,000 jobs the economy added in July were a disappointment. The quality of the jobs was even worse.
Associated Press
Aug 5, 2013

A disproportionate number of the added jobs were part-time or low-paying — or both.

Part-time work accounted for more than 65 percent of the positions employers added in July. Low-paying retailers, restaurants and bars supplied more than half July's job gain.

"You're getting jobs added, but they might not be the best-quality job," says John Canally, an economist with LPL Financial in Boston.

So far this year, low-paying industries have provided 61 percent of the nation's job growth, even though these industries represent just 39 percent of overall U.S. jobs, according to Labor Department numbers analyzed by Moody's Analytics. Mid-paying industries have contributed just 22 percent of this year's job gain.

"The jobs that are being created are not generating much income," Steven Ricchiuto, chief economist at Mizuho Securities USA, wrote in a note to clients.

That's one reason Americans' pay hasn't kept up with even historically low inflation since the Great Recession ended in June 2009. Average hourly pay fell 2 cents in July to $23.98 an hour.

Among those feeling the squeeze is Elizabeth Wilkinson, 28, of Houston. After losing a $39,000-a-year administrative job at Rice University in January, Wilkinson found work at an employment agency for $15 an hour. Yet she's had to supplement that job with part-time work as a waitress.

"This morning I put $1.35 worth of gas in my car because that is all the money that I had," Wilkinson said via email. "It's very difficult to survive on $30,000 (a year), and I am living paycheck to paycheck."

Part-time work has made up 77 percent of the job growth so far this year. The government defines part-time work as being less than 35 hours a week.

Weak economies overseas have reduced demand for U.S. goods and, as a result, for better-paying U.S. jobs in manufacturing. Government spending cuts have taken a toll on some middle-class jobs, too.

Many employers have also discovered that they can use technology to do tasks more cheaply and efficiently than office workers used to do. And some have found that they can shift middle-class jobs to low-wage countries such as China.

By contrast, most lower-paying jobs — from waiters and hotel maids to store clerks, bartenders and home health care aides — can't be automated or shipped abroad.

"You're always going to have jobs in the retail sector," says Michael Evangelist, a policy analyst with the liberal National Employment Law Project, which advocates on behalf of low-wage workers.

Consider Mike Ulrich, 30, who earned a master's degree in public administration in May from the University of Colorado. Ulrich hasn't been able to find work that requires a college degree. Instead, he works at a hardware store in Spokane, Wash., earning the state's minimum wage: $9.19 an hour.

Not all July's new jobs were low-paying. Local schools hired more than 10,000 teachers and other employees. Financial firms added 15,000.

The surge in part-time employment began in April.

Jason Furman, the new chairman of the White House's Council of Economic Advisers, says part-time employment has been inflated by the across-the-board budget cuts that began to bite in March, forcing some federal workers to take time off without pay.

Analysts say some employers are offering part-time over full-time work to sidestep the new health care law's rule that they provide medical coverage for permanent workers. (The Obama administration has delayed that provision for a year and into 2015.)

But Furman disputed the idea that the health care law will ever drive companies to favor part-timers over full-timers and says the notion makes even less sense now: "Why would they shift people to part-time for something that's not going to happen until 2015?"

Scott Anderson, chief economist at Bank of the West, thinks concerns about the rise in part-time work are overblown. The government's figures on part-time jobs are highly volatile, Anderson notes. The big gain this year could quickly reverse, he says.

Yet for the most part, Daniel Alpert, managing partner of Westwood Capital, wrote in a report last month, "the only folks engaging in meaningful hiring are doing so because labor is cheap."

The low quality of the added jobs could help explain something that has puzzled economists: How has the U.S. economy managed to add an average of roughly 200,000 jobs a month this year even though it grew at a tepid annual rate below 2 percent in the first half of the year?

Some are proposing an answer: Perhaps a chronically slow-growth economy can't generate many good-paying jobs — but can produce lots of part-time or lower-wage retail and restaurant work.

Diane Swonk, chief economist at Mesirow Financial, recalls that the robust economic growth of the late '90s generated millions of middle-class jobs. And it pushed unemployment so low that short-staffed companies were forced to convert part-time jobs into full-time ones.

"Faster growth would fix things," Swonk says. "That's the magic fairy dust."

 

Comments

The Big Dog's back

It had nothing to do with the rest of the world being in "shambles". The rich didn't like seeing middle class people vacationing in the Caribbeans. That was the rich's playground. How dare middle class workers go to Aruba.

grumpy

The "rich" don't see the middle class. They could care less what the middle class does, goes, or vacations. The "rich" aren't in the same hotels, spas, restaurants, or anything else.

Contango

Re: "The 'rich' aren't in the same hotels, spas, restaurants, or anything else."

Yea, they do which why they are "rich." :)

The millionaire next door:

A truism - Those that got it don't flaunt it. And those that flaunt it ain't got it.

Many of those "rich" are up to their eyeballs in debt and stone cold broke.

2cents

"The millionaire next door"

I could tell you a few stories about these people I have met over the years. And there are more going underground as the current administration marks them as bad people!

Many times with others you see the fancy home and fancy cars but inside there is little furniture and plenty of bills :0

Contango

Re: "little furniture"

See-throughs. I KNOW what you're talkin' about.

"The Millionaire Next Door"

A little dated, but STILL a great book!

The Big Dog's back

Not now but back then they were.

True Blue

All the decisions starting back in the 70's have created this mess we're in today. This includes Republicans and Democrats thinking FREE TRADE would be great for our country. As you can see it doesn't work the us, but the so called job creators love it.

The Big Dog's back

Yes they do.

Nemesis

Why are the jobs low quality? Because low-end jobs are all the majority of the workforce is qualified to do. Employers are pushing for more high skill immigration because they can't find qualified people anymore.

2cents

God, don't get me started there! We have taken away so many tools for our youth to learn because they may get hurt. Now with computers and cell phones they tend to not use their brains and become innovative and create their own activities. The need for good tool makers and all the other trades as well as engineers is there but we are not creating these people. WTFN (I bet you can figure that one out)

nonconformist

That is such crap. I currently work a part time job that pays half of what I would make doing the same job in other areas. And I am more than qualified. Over qualified actually. However, I am not in a position to leave the area, one of the big reasons is due to my current low wage, part time paying job, no less. In my area of work, in many areas of work this area sucks. There are jobs out there for people with skills and schooling, but they certainly aren't in Sandusky, Ohio or surrounding areas!

Contango

Re: "There are jobs out (snip)"

Ya got that right.

I left several decades ago after college and ONLY came back to help with family.

After my "errand of mercy" is over - I'm OUTA HERE.

I'd love to live here again, but there are other places in this country that are SO MUCH BETTER.

buttermaker

That's the "Hope and Change" libs were looking for...

donutshopguy

Those who are uneducated will not survive in our ever changing technology era. Those well paying jobs on an assembly line are in the past.

Stop crying and get educated. Lot of well paying jobs for those who understood how the world was changing and adapted.

The Big Dog's back

The only well paying jobs are going to CEO's sons and daughters.

Justme...

Bull, Big Dog. That's just an excuse not to get an education. Unemployment rates are signficanatly lower as education rises - and not just for "CEO sons and daughters". As we hear, there is a shortage in the trades. No education or trade skill = minumum wage job. Get a degree or learn a trade!

grumpy

Tool and die, especially those that can include computer aided tool and die, machinists again especially those who can add computer aided machinist, can and do make $40 per hour and up for a journeyman with experience. It is what my son does. He works 50-60 hours per week cause they can't find enough qualified workers.

Nemesis

Your facts don't fit Big Dog's soundbite-based class warfare agitprop, therefore they are null and void.

The Big Dog's back

Really? After the companies devastated the Tool and Die industry by out sourcing to China, they now want Tool and Die makers? $40 dollars an hour my arse. I work in the industry. The only time they make that is after they work 60 hours. Then it's double time.

grumpy

In this area I wouldn't be surprised it doesn't pay as much. Go where the stamping plants are. Go to where the new plants are being built with the computer aided equipment is and learn how to run, work and set them up. $40 an hour is the normal.

But you can stay here and work with the 40 year old machines and get paid half if you wish. That is the difference between those with the education and desire to advance in their field and those who want to just hang on and whine. Why do you think he went and got more schooling than just the apprenticeship? To advance beyond those who can't learn the new tech that is available.

The Big Dog's back

40 year old machines? Really? Fisher Tool and Die in Erie Mich, just north of Toledo has all state of the art equipment and they don't pay anywhere near that. Sorry pooh, you have no clue what you're talking about.

OH-IO

If you qualify yourself for the jobs that are offered and have desire and presentation employment awaits you. If you think just because your an American and you should have a high paying job then your under an illusion. Those jobs ceased in the late 70's. They've even left Sandusky. You didn't need formal training or education.

Mr. D

From what I see, many of these "you must get educated to be qualified" jobs can be done by a monkey being rewarded with a banana. Companys are unwilling to train employees anymore.

2cents

"Companys are unwilling to train employees anymore."

Unfortunately many are not trainable unless it involves software, a TV remote or a cell phone, all the equipment is gone from most middle and high schools we once had to stimulate someone who wanted to attain a skill. Most of that goes back to the litigious society we created in the 80's : (

The Big Dog's back

"litigious"? Are you for real?

2cents

Yes I am, we now reap what we sowed.

http://www.thedailybeast.com/new...

http://www.thetelegraph.com/opin...

http://www.city-data.com/forum/p...

Just a sample, it was a hobby because I was curious when my turn was as a manufacturer. Now I do not g,a,s

The Big Dog's back

Such reputable and reliable sources.

The Big Dog's back

Earth to 2 cents, BLOGS and OPINION pieces are just that, not FACTS! Oh boy, no wonder what's wrong.

2cents

I could go on for a decade Dog, unfortunatly you have a closed mide to this. I wonder where the term progressive came from? More like the antonym!

By 1994 the threat of lawsuits had driven the general aviation industry into the ground. Cessna and Beech ceased production in the 1990s.

http://marginalrevolution.com/ma...

OH-IO

Curious George it's not about the job itself. It's about PROVING you have the ability to learn. Anyone can fill out an application.

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