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

OH-IO

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

grumpy

" Companys are unwilling to train employees anymore."

My son had his extra schooling paid for by the company he worked for, With the agreement he would stay there for 2 years after he became a journeyman. This was school on top of the apprenticeship he was doing. He stayed 3 years, went to another company and got a 15% raise and better benefits.

The Big Dog's back

As usual pooh you have to fabricate a story to fit your narrative.

grumpy

lease cite your proof. I will be waiting with bated breath. But as usual you will not answer when you spout such crap. Go where the state of the art in the industry is and take extra schooling for running state of the art machines and you will be paid for your knowledge and experience. But then you can stay here and run 40 or 50 year old machines and get paid for what you are worth. Your choice. There is a BIG difference between state of the art and what is available here. You are here where the equipment is 40 years old. He is setting up new models and running the newest computer aided models. Because he went to school to do so, and takes continuing education to keep up with the state of the art.

arnmcrmn

grumpy...my sisters grad school was paid for by The OSU and was similar to your sons situation. She had to remain a RN while going for her practitioners degree at the OSU hospital and had to then give them 2 years post graduation, which she did and they paid for it all.

Worked out good for her and OSU.

KURTje

Grumpy please share the company name, many here would be interested in checking that out.

The Big Dog's back

He can't because said company does not exist.

grumpy

He now works for Ford. The just expanded plant at Kansas City. He told me they also just opened up a third shift there. 900 new hires, for the assembly line.

The Big Dog's back

Ford in Kansas City doesn't pay that much. Pretty convenient since this story is all over the web.

grumpy

"Ford in Kansas City doesn't pay that much"

Not for the assembly line, but then he doesn't work there (on the assembly line). As I stated before he works in a state of the art, new plant. How would such a thing NOT be all over the net? As I said before Pull your head out of your rectum.

grumpy

Listening to crickets chirp.

Won't move? Don't have the education? Don't have the skill? Don't have the ability to deal with the state of the art equipment?

Run, run from change. Here you claim that conservatives won't/can't change. Conservatives simply are the change, they do what needs to be done to deal with changes... not strive to hold onto what is, that leads to stagnation. The only constants are that things will change. Be willing to grow and change. Don't stay stuck on stupid.

The Big Dog's back

Why do you have to fabricate a story?

grumpy

"Why do you have to fabricate a story?"

Why do you have to have your head securely up your rectum?

The Big Dog's back

The only good thing is you are supporting union jobs pooh.

grumpy

Yep, when the union has changed with the times, they can be useful. The one I was a member of didn't donate dues to politicians, if you wanted to bundle your money for the union to donate they had to get a seperate donation from the union member specificlly for that politician.
The union mainly was a hiring hall, apprenticeship, continuing education and certification, insurance and pension. They stayed out of politics. The union my son is in does the same. Those unions who are stuck in the 30's and 40's are falling by the wayside. They need to change with the times and learn to modernize, or they will be like the dinosaurs, a memory.

The Hero Zone's picture
The Hero Zone

"Jason Furman, the new chairman of the White House's Council of Economic Advisers...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?'"

Why is nobody concerned nor calling out a man with this level of power and influence for failing to realize why a company would make plans for an event that was ORIGINALLY (and until almost last minute) touted and scheduled for being only 3 months away from this quote but only recently in the past month moved a mere other 12 months out?

He may as well have said, "Why would our federal government make preparations and predictions for its budget projects and grant availabilities for 2015 now?"

"Why would Ford plan their 2015 model Focus now?"

"Why would you plan for a 2015 wedding now?"

Hello? HELLO? McFly! Holy Fazoli, is this the kind of person we have where even a rudimentary knowledge of any kind of responsible practice is seen as a mystery of the universe?

Methinks we have more grasshoppers in positions of power than ants...and it deeply troubles me.

grumpy

Politicians never look beyond the next election cycle , or so it seems, at least for the last generation or so of politicians. I gusee the same can be said for CEO's who didn't found the business, they don't keep the job long enough for long range plans to come to fruition, so they shoot for bigger short term profits. The founders of business's look long term, but after they die or retire... not os much... especially those who don't come up through the ranks of the company. Keep that in mind when you invest in a company. As for politicians... that is a whole nother kettle of fish... usually rotten.

The Big Dog's back

hero, did you or did you not read what I posted earlier about companies doing this since the early 70's? NOTHING NEW!

The Hero Zone's picture
The Hero Zone

So you aren't concerned that a White House adviser is completely baffled at why a company would set hiring policy less than (only made after to be more than) a year away? Whether or not you believe it has there was a definite, written deadline for scheduling/hiring made with the passing of the ACA. It solidified and gave a legal reason/excuse for the practice beyond everyone "just knowing why".

Now, for yours and everyone's enjoyment, my point conducted in two acts.

* * * * * * * * * * ACT 1

"What?! You mean people actually take every legal deduction they can on their taxes?! WHAT AUDACITY! Hypocrites! Robber-barons! How dare you set your policy on the minimum standards required by law!"

"Why don't we change the law?"

"SILENCE, FOOL! THIRD RAIL OF POLITICS. BLA BLA BLA. PEOPLE SHOULD JUST DO WHAT I THINK THEY SHOULD AND NOT WHAT THEY ARE COMPELLED, FORCED, REGULATED, OR INCENTIVIZED TO DO!"

* * * * * * * * * *

Or, if you will.

* * * * * * * * * * ACT 2

Crew: Captain, we hit an iceberg and are sinking. Should we close the flood doors and get people on deck?

Captain: Foolish boy! You can't do that.

Crew: Why, sir?!

Captain: People would think we're sinking, we can't have that! Now back to your station and carry on.

Crew: But sir, we ARE sinking.

Captain: We are still above water. We'll discuss options when top deck is ten feet from water. Then when it is obvious to all, we will take action and they will laud us as competent sailors.

Crew: Aye-aye, sir! Let's go!

* * * * * * * * * *

grumpy

"So you aren't concerned that a White House adviser is completely baffled at why a company would set hiring policy less than (only made after to be more than) a year away?"

Concerned yes, surprised no. I explained why I wasn't surprised. Politicians look out at the world while wearing the blinders (tunnel vision, if you prefer that term) of their party, no matter which party they are in.

If you can figure out how to do something about it you could share what that would be. Then concern might accomplish something. Other than getting rid of the current crop of politicians of all stripes and those who are so one sided in their views I don't know how to fix your concern. Do you have any other ideas?

The Big Dog's back

You're lost hz.

The Hero Zone's picture
The Hero Zone

Then be my guide. Seriously. I am very open-minded. Explain how my parallels are incorrect. I understand you are saying this was an unspoken "standard practice". But this law now legitimizes it and provides absolutely no real legal/economic incentive to hire people over 30 hours/week or that 50th+ employee. That is my frustration with this doofus-sounding adviser acting shocked that businesses actually plan things out for a year ahead.

You can't legalize slavery then be floored when people actually, you know, take slaves. Do you see what I'm saying?

* * * * * * * * * *ACT III

Government: You must under penalty provide insurance for employees who work over 30 hours a week.

Business: Ok, we won't hire people for more than that. We'll plan accordingly.

G: Wait, what?! You can't do that. That makes NO sense. Why aren't you doing as we say?

B: We are. We are doing things perfectly legal and even if we were doing it before, this makes a solid case for us that gives our employees little to no recourse. Even if people thought of us as d*cks before they will do so no less now.

G: But that wasn't our intention!

B: Yet it is the result. It isn't OUR intention to suddenly take on a massive financial burden when we may not be otherwise able to do so at your whim and command.

G: You are an evil, bad, immoral person who is a meanie and possibly a doodie-head. We just want to help.

B: Will you revoke the mandate?

G: No.

B: Then this discussion is over. Unless you do or actually foster a STABLE, attractive marketplace for people to hire and conduct business in, we will operate as best we can as our interest is in surviving as a company in the very long term, Mr/s. Temporary Politician.

...Oh, we will also use all our legal tax deductions every year to minimize our tax burden.

G: You...you monster.

B: You are what you eat. You eat my tax dollars and I eat your regulations. Enjoy.

Stop It

!

arnmcrmn

In todays world...unless you hit the lottery or start a business from the ground up, the pay is going to fit the education level required for the job.

If every factory worker was making $30+ an hour, your lawn mower or book would be 10x as much in the store to buy. Want McDonalds workers to make 20 bucks an hour, then be prepared to pay 10-15 bucks for that VALUE meal. Not so much of a value anymore.

KURTje

While not a MENSA graduate, remember talking with some regarding Norwalk's 3 decent jobs leaving. Some worked at keeping them. Others, who were born into land & were subsidized by US, did nothing. Most don't care until problems hit them. Yet many are confounded why services cost more (higher taxes) & criminal activity increases. Gee. We all lose with declining wages. In reality we all pay for it too.

Really are you ...

Once upon a time, the $20. an hour job was here. Even before that time there was a thing called piece rate. The cost of living was not quite as high as it is now. Those workers were able to live like kings and queens eating seafood and steak every night. Now lower wages or shorter work week hours. Now it is fried bologna and ramein noodles. Back then those businesses survived and made improvements in their products. How can these businesses not pay an hourly wage that use to be paid? The price on their finished goods have gone up, pay has lowered. Where is that difference going?

The rising cost of health care? Maybe this is one of the true professions that kept up with the inflation rate. But I am sure a vaccine shot given by doctor actually costs $150. for 10 minutes worth of work. $120. for the vaccination and $30. for the office call. Really?

arnmcrmn

Really are you......I pretty much agree with your first paragraph. Middle class job wages haven't risen with the cost of everything else, and they can't now because the price's of the products you buy will increase even more.

Healthcare is expensive because of insurance and the overhead. Until you work for a doctors office or hospital you won't understand why things are so expensive.

The Big Dog's back

Do you really believe prices will increase if wages are brought up? The money for wage increase is there already. Has been. It's just all going to the top 1%. How about the producers sharing some more of the pot.

arnmcrmn

They do, its called dividends and capital returns!!!!

Contango

Re: "The money for wage increase is there already."

Mishegas.

March into your boss's office and ask him/her to double your wage.

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