RUNAWAY JOB GROWTH

Posted in Quick Hits on April 18th, 2016 by Ed

Sometimes I start writing a post and it begins to sound vaguely familiar, so I double-check if I've done it before. In this case I've basically done it annually for 15 years. I'll give myself a pass since the news itself never changes and it seems like people are actually beginning to notice.

Stop me if you've heard this before: Job growth is robust, unemployment is low, and yet the job market is still poor. That's because for thirty years we've been hemorrhaging jobs that pay people enough to live half-decently and replacing them in the balance sheet sense with menial service industry jobs. Of the fastest growing sectors in the job market over the next decade, half of the top ten pay less than $25,000 annually. If you like wiping up puddles of body fluids in a nursing home for $10/hr or working at Burger King, these are going to be salad days for you. The world will be your oyster.

It's not relevant, despite that attempt at humor, that these jobs are shitty (pun intended, in the case of home health care). What is relevant is that they don't pay. They pay about two-thirds of the median annual wage, and that isn't exactly high; it's around $35k. A person with dependents could live on a $20,000/year job, if barely and as long as absolutely nothing unexpected goes wrong. It's a paycheck-to-paycheck existence at best. In reality it's more likely to be part of a two-job routine for an individual or one of multiple jobs held in a household. Because that job isn't going to allow anyone to do much more than scrape by. With some luck.

This may be the only thing that Trump supporters and the rest of us who read books and live in reality can agree upon: our problem isn't job loss as much as it is the loss of good jobs. There are, and will be for the foreseeable future, more than enough jobs making the lives of the top 10% easier. We can serve them food, clean their houses, drive them around, make their appointments, and take care of the dying parents they don't want to see. And we'll have no problem getting the chance to do it for little money and without any job security beyond day-to-day.

If you have a few minutes to spare and academic journal access, check out "Inequality and the Growth of Bad Jobs." Despite the fact that low-skill jobs have shrunk in number since 1960, low-wage work makes up most of job growth over that time period. The problems with our economy aren't hard to figure out in light of that information.