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

Contango

And some "good news" for Pres. Obama: The unemployment rate fell.

But why?

"The payroll reading belies the drop in the unemployment rate, to 7.4% from 7.6%.

While unemployment fell to its lowest level since December 2008, the rate fell BECAUSE MORE PEOPLE DROPPED OUT OF THE LABOR FORCE (Emphasis mine).

Average hourly earnings dipped 0.1%, while the average workweek dropped to 34.4 hours from 34.5."

http://www.vanguard.com/us/insig...

grumpy

Hourly earning drop, workweek shrinking, part time work increasing dropping out of the labor force.

"Change you can believe in" "Hope and change", "We will change the way America works" We were told of what would be happening during his first election. We are reaping what he sowed.

Contango

And recently "Dear Leader" was in TN, touting Amazon.com.

"Amazon.com Creates 5,000 Jobs, Destroys 25,000 In The Process?"

"If Barack Obama and camp want to generate more government revenues, they should consider backing off on the new taxes and focus instead on limiting the regulations that impede the flow of capital.

They should help secure confidence in the economy, not just through buoying up the stock markets, but through justice and prudent oversight over the value of our money and security of our savings."

Kinda like what Pres. Reagan did with the financial and fiscal disaster that he "inherited."

http://seekingalpha.com/article/...

Pres. Obama never listened to Paul Volcker, but had him on his Economic Advisory Board merely as "window dressing."

registerer

Contango - It is also interesting to note that the employees at the Amazon plant in TN made political contributions of $116,000+ to democrat politics.

The Big Dog's back

When all else fails blame the Black man. Why would we blame greedy business owners. Let me check, are there any less millionaires than there were yesterday? NO! The wealthy are driving it up our arse, and the right wingnuts are helping them.

Donegan

If all you have is race you do not have a argument. Please try to think once in awhile no matter how hard it hurts.

deertracker

man crush alert!!!!!

KnuckleDragger

You should know, since you spend the day being led around by the little mutt. So tell us, have you two consumated your relationship yet?

deertracker

No varmints to kill today?

grumpy

Are you volunteering?

arnmcrmn

Contango.....please do not try and make common sense anymore to the liberals. They simply do not want to hear it. They do not understand that unemployment benefits are not forever. There is an end date and when one reaches that, the benefits are cut off and they are quickly and conveniently dropped off the unemployment charts......which looks like things are getting better, but in reality they are not.

Welfare and unemployment are the two factors one needs to clearly look at. When true unemployment goes down, welfare should also go down....not UP.

Simple math, simple logic and common sense that gets clouded by washington.

bluestreakparent76

In 10 years you're going to be in the Upper class bracket, or you're going to be a low-wage slave of the Upper class. Goodbye middle class...the corporations that control the government(both sides) have won, profits will go up as the human standard will go down.

Contango

Re: "corporations that control the government,"

It's called: FASCISM.

See: The Iron Triangle.

http://www.google.com/search?q=t...(US_politics)%3B400%3B347

arnmcrmn

The USA is a lot like the Roman Empire. Our government has grown to big and nobody can or will stop this run away beast.

Google the comparison between the USA and the Roman Empire and read. You will see how eventually this country is going to go belly up like the Romans did. The similarities are almost identical. The only difference is our government is delaying the inevitable because they have building called the Federal Reserve where they keep printing money.

from one of Big Dogs favorite sites.

http://www.salon.com/2012/12/26/...

reporter54

no s**t dick tracy! where have you all been? it's been this way for a long time. some companies think $8 and hour is a decent wage. it's not. try living on it. and they only want you to work part time, so they don't have to pay for insurance. the rich are getting richer and the poor are piling up.

2cents

"think $8 and hour is a decent wage"

And that $8 is like $16 or $20 with all the new regulations, taxes and other crap the agencies have places on us employers. For example a 55 gallon drum of a particular solvent went from $800.00 to 1,400, to 2,500, to 5,000, to $13,000.00 before it was banned with no drop in replacement available. Or health care that we always provided in the past is now out of reach, or the products we manufacture being stolen and manufactured in China. Oops! No need for workers, go shop Wally World some more and watch good paying manufacturing jobs go away forever!

grandmasgirl

Thank you for saying it like it is. I saw an ad for Whirlpool in the paper the other day. Starting wage was $10.25. How can anyone live on that wage after taxes and insurance is taken out. Then there is no pension plan. You are supposed to join a 401K. How can you contribute when you don't even make enough to pay your bills. I never shop Wally's unless I cannot get it anywhere else.

2cents

Thank you for the comment G. I use Wally as an example, unfortunately look on the label of any product at any store and China is probably 80% or more of the manufacture location. Check this out!

http://www.bloomberg.com/news/20...

Contango

Re: "the rich are getting richer and the poor are piling up."

Thank the Federal Reserve's ZIRP & QE policies and a normal business cycle which are about the ONLY things that are keeping this economy on life support.

The Big Dog's back

Exactly reporter, and the right wingnuts are driving the bus that's running over the middle class.

grumpy

In 09-11 the left had the presidency, a supermajority in the Senate, and a majority in the house, in 11 they lost the supermajority in the senate but still had a majority there, they lost the house, and it is still that way. Please inform us how the right is "driving anything when in the minority in the Senate and the president is Obama. We are waiting with bated breathe for your answer. But you will never answer, Piddle Puppy.

arnmcrmn

grumpy....what you all need to realize is that in order to have a solid conversation on here you have to just overlook and not respond to big dog, and 4shizzle, coaster, deer.....all they do is deflect and name call and never provide proof. Its the liberal way.

We have a solid liberal president and the Senate controlled by Dems.
People have gotten richer and faster under Obama and the Dems....fact.

Donegan

You do realize Obama is the president right? He appoints the FED and can Veto anything he likes. Oh my bad you still think he is innocent.

registerer

I read an interesting article the other day regarding job creation. The jobs being created were at a call center expressly designed to help individuals with setting up health care accounts under Obamacare. They are going to hire approximately 220 people!!!! Yeah, job creation!!!! But here is the kicker...they are all part time and DO NOT offer health care benefits! Lmao, so much for health care for all.

The New World Czar

Welcome, everyone- to Obama's America.

2cents

Not only Obozo Czar, I was perturbed when GW Bush Jr. made the comment some time ago that we could afford to outsource the simple manufacturing work so we Americans could concentrate on higher technology jobs. I knew then we were headed into trouble. There are some things the current prezo inherited but he and his gang failed to curb nor recognize that we were shipping not only jobs but technology offshore only to be cloned and made less expensive. It is a world market but it is not a fair world market. The world expects to see the American standard of living drop down to match theirs. Well we have people in office that I really believe think that we must do that! I swear they are communists.....

Contango

Re: "outsource the simple manufacturing work,"

Like it or not we live in the era of globalization. Walling ourselves off with protectionism would be DISASTEROUS.

The advantages we had after WWII when most of the world's mfging was in shambles began to leave us in the 1960s.

The "jobs" are coming back due to the rising Chinese wage scale, but they're being performed by robots (high tech jobs). Twenty can now operate a factory, whereas 10-20 yrs. ago it took two hundred.

Unfortunately, as long as liberal transfer of payments programs exist, why should some bust their hump in order to get an education or get a job? The gubbermint will take care of them.

2cents

Don't forget about the other Asia C!

http://online.wsj.com/article/SB...

Contango

Re: "other Asia"

I've read the argument.

Problems are the others lack of population, education (India) and infrastructure.

Actually liked Hong Kong (low taxes, low regulation) as a model for the U.S. prior to 1999. One of Milton Friedman's favorite examples.

Mexico, with its growing middle class is a better bet going forward. Closer to the U.S.

Major problem for us: Lack of small business formation where the jobs and new ideas tend to originate. Increasingly fewer want to take a risk on entrepreneurialism and would rather just work for someone else.

Really are you ...

Re: "new ideas, entrepreneurialism"

I am trying, to build a new creative prototype that is. But without making the hourly rate I use to, it is taking forever. Live for something, or live for nothing. Right?

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