RUNAWAY JOB GROWTH

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.

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58 Responses to “RUNAWAY JOB GROWTH”

  1. moderateindy Says:

    The answer is simple, unions. Actually acheiving the result , on the other hand, is really difficult. First, the right, and their friends in corporate America, have spent 30 + years on propoganda campaigns denigrating unions.
    Unions just cheat workers, they kill jobs, they make us uncompetitive, blah blah blah.
    How uncompetitive is Germany? A heavily unionized country where every major corporation has to have a union rep on the Board of Directors.
    People cry, well the'll just move the jobs elsewhere. Yeah because they wouldn't do that otherwise now would they?
    People that say, I was in a union and they did nothing but take my dues are morons. They have a complete lack of awareness of everything that the union did to make their job better, before they ever even thought about having a job.To begin with, they are able to set a higher wage market for an entire industry, so even non-union workers benefit.
    Health care workers have no strong union presence, that is why their wages and working conditions suck so bad. If they had a strong union they would still have a crappy job, it would just be a bit less crappy, and would pay better.
    Do people think that the disintegration of the good paying job, and the drop in union membership have no correlation. Those two things, along with wealth inequalty track right along with each other since the 80's.
    One of the reasons the right hates unions is because they see it as downard wealth redistribution. And they are 100% correct. It improves pretty much everyone's income that makes the majority of their income via labor. That money comes from corporate profits, and money paid out in things like dividends.
    I don't know how you fix the image problem, and get people to realize that heavy union representation is a huge plus for 90 percent of the population. It really is a perfect example of the "What's the Matter with Kansas" conundrum we face in this country. People that see someone that is getting a good deal, because they are in a union asking: "why should those people get that?", instead of asking: "why aren't I getting that as well"?

  2. Jestbill Says:

    Hah! Unions?!
    People don't join anything anymore. There was a book about "Bowling alone."
    Go spread your economic message at your pick-up basketball game. Tell it to your next meeting of "Independet" voters.

    Remember: we're all leaders now–we don't follow anyone anywhere.

    /old_Man_Rant

  3. carrstone Says:

    To be totally fair, you should add the income derived from 'under the table' jobs. Estimates put this at $2 trillion annually or about $6,250 for every man, woman and child in the USA which, had personal income tax been paid on it, is worth nearly $7K in pre-tax earnings, adding about $18K to every household's income.

  4. HoosierPoli Says:

    Take from the rich and give to the poor – tax hikes on the rich used to pay for negative income taxes that guarantee no one who works will live in poverty. The solution is unbelievably simple in a public-policy sense.

    Going through Thomas Frank's latest and boy is it a masterwork, especially because of where it points the finger. I won't spoil it for you here – just go read it.

  5. Major Kong Says:

    Oh I can only imagine which think-tank produced that estimate of $7K "under the table" for every person in the country.

    I'm sure there are people reading this wondering "Hey! How come I didn't get that?"

    Was it AEI? Heritage? Cato?

  6. Katydid Says:

    @Major Kong; I agree, the fictitious 6-year-olds making $7k under the table every year certainly made me raise an eyebrow. Clearly The Tooth Fairy cheaped out at my house when the kids were little. Also, where's my $7k under the table? I took in my neighbor's mail while they were on vacation last summer, and all I got was a box of salt-water taffy and a t-shirt.

  7. Katydid Says:

    NPR had a story just recently about (non-doctor) jobs in the medical field and how they're paying so very, very little. I can believe it because I've seen it at my own primary care physician's office; the staff is all around 22 and none of them give two hoots. This is what happens when you undervalue the job, and I'm sure the inattention's going to kill someone some day.

    OTOH, Costco employees average around $15/hr with affordable health care provided. I've been going to the same one for roughly a decade, and I've seen the same faces pretty much the whole time. None of them look like they're being held there against their will, and I've seen them go out of their way to provide good customer service. Imagine that–treating employees like human beings makes them happier to come to work!

  8. Major Kong Says:

    I think Trader Joe's treats their employees fairly well also. I notice very low turnover at their stores.

  9. Katydid Says:

    Anecdota time; I was in Trader Joe's just last week, stuck behind someone who was apparently stocking up for the upcoming apocalypse and was more interested in their cellphone than actually checking out. A kid tapped me on the shoulder and told me he was opening the next lane for me, which was much appreciated.

  10. Jestbill Says:

    Unverified googling:
    http://www.nolo.com/legal-encyclopedia/the-underground-economy-unreported-income.html
    The $7T is for the worldwide underground economy, not US.

    Underground economy includes a lot of small business corruption–cash liquor sales eg.

    I doubt that your average 6-year-old is selling drugs or playing piano in a brothel for cash so the (estimated 13% of GDP) underground money is not uniformly distributed.
    Our GDP/capita is 50k and more while the article is about people (not individuals necessarily) with 35k and less.

    Carrstone is the professor's sock puppet. If he were a real Libertarian his posts would be longer, denser and often mention the gold standard.

  11. HoosierPoli Says:

    On Trader Joe's: Former Crew Member here. Unfortunately TJ's is slipping on the personnel front. Their whole hiring advantage was based around good, cheap health insurance. When Obamacare came along first they started blaming rate increases on the ACA, then just straight-up shoved all the part-timers onto the exchanges, with the excuse that they could get better deals there (not true). I know a lot of good employees who were only there to keep their kids insured, and the pay wasn't exactly stellar either. I wouldn't be surprised to see the surly, poorly-trained employee start to show up there in the near future.

  12. Deggjr Says:

    Thomas Piketty made an interesting observation about all trade deficits. The net of all trade deficits is a deficit. He proposed the hypothesis the difference was earth's trade deficit with Mars.

    That hypothesis is as realistic as the hypothesis that every home health care worker takes $18k off of nightstands every year.

  13. Dave Dell Says:

    The rising tide that lifts all boats consists of good jobs for a living wage.

    I blame the inability of a majority of American voters to think critically on television.

  14. doug Says:

    Carrstone, 'to be totally fair'… Hey, be sure to be 'balanced ' also…

    Answer not simple. Automation, union demise, offshoring mfg, reduced taxes on wealth, increased taxes and fees on poor, no federal min wage increase in decades are but some of the reasons.

    HP yes, Frank's latest covers this well.

  15. Robert Says:

    Regarding Jestbill's point – I'm the only person I know who has been an officer of both a union local and a Masonic lodge.

    Maybe I'm more of a joiner than I thought.

  16. Emerson Dameron Says:

    The $15 minimum wage has passed in Los Angeles but won't kick in for a bit. During that time, I wonder how many laborers, service personnel, teachers… hell, maybe even cops… simply won't be able to afford this place anymore.

    The West Coast housing crunch has created a situation wherein getting a dingy studio in MacArthur Park requires a tax audit and a $4K investment. Even if you're somewhat established, you're rent is going up or you're having nightmares to that effect.

    I don't see how the entire service sector can commute from Barstow.

    One would think that something had to give.

    PS: Totally OT, but I want Ed to see this…
    http://we-make-money-not-art.com/relics-of-the-cold-war/

  17. carrstone Says:

    @ doug

    No, I want to be fair, not balanced. 'Balanced', in your speak, means emotive and malignant tampering with the facts in order to further the progressive fairy tale and is therefore useless as data.

  18. sluggo Says:

    You know what else unions fix? The gender wage gap.

    Do you think any female union members make 21% less than the guys next to her. Furthermore, do you think the guys next to her would ever permit her to work for 21% less than they do?

  19. sluggo Says:

    Could someone please usher carrstone back to his mom's basement.

  20. carrstone Says:

    @Major Kong, Katydid

    What, my comment threatens to upset your progressive apple cart?

    Google is full of articles on the shadow economy and perhaps you might broaden your vision by reading CNBC's contribution on the topic, first penned in April 2013; they're your fave bringer of news, I know, trusted by you to chant the liberal mantra in a way that makes it easy for you to regurgitate their words.

    Should you want a more serious commentary, you could do no worse than consulting the Fed of St Louis who'll confirm that the black market is around 13% of GDP in developed countries.

    And then, there's the work done by academics like Alexandre Padilla or Edgar Feige who'll point out that the IRS is missing out on around $500 billion in revenues annually from evaded personal income taxes, i.o.w., the USA would have some 15% more in its coffers every year if all these slimy thieves were made to pay what's due.

    That would be fair, wouldn't it?

    You may not like my occasional comments but I can assure you that they're based on the facts – I actually bother to look things up, something you're obviously too cocooned and idle to do.

  21. sluggo Says:

    You guys know that theory that 'give a billion monkeys a billion typewrites and one of them will eventual type out Hamlet' ?

    Well carrstone was the monkey who was the fourth runner up.

  22. carrstone Says:

    @Jestbill
    It's not a wwide $2 trillion, it's the US only. Check it by calculating back from the $500 billion in lost income taxes.

    The numbers are not mine, I looked them up in several reports which all agree on the locales of both the $2 trillion and the $500 billion; I'm afraid, your guy made a mistake.

  23. c u n d gulag Says:

    @sluggo,

    ROFLMAO!!!!!
    I can't top that, so, back to focusing on not crapping in my pants from my nasty stomach bug…

    My Mom and I had planned on going to the polls today to vote for Bernie.

    Unfortunately, l got that bad stomach bug on Sunday, and can’t leave the vicinity of the john.

    Sorry, Bernie!

    Oh, the best laid plans….

    Oy…

  24. Major Kong Says:

    @carrstone

    Actually my preferred news sources are NPR, BBC, the Economist and the Financial Times.

    Both the Economist and Financial Times are generally considered to be "center right" by anyone who isn't in the TEA Party or the Ayn Rand Fan Club.

    Now I realize I'm a rich airline pilot but I live in a pretty modest neighborhood. None of my neighbors are pulling in $6k under the table as far as I know.

    Nor are any of my working-class rural relatives. Believe me I'd know if they were.

    I realize the plural of "anecdote" isn't "data" but I'm just not seeing it.

    Still it's nice to see you're concerned about wanting to increase federal tax revenue.

  25. Major Kong Says:

    While I'm certainly all for going after tax cheats, the GOP hasn't exactly been lining up to fund the IRS. Kind of hard to go after them with an underfunded federal agency.

  26. Philippa Says:

    Sluggo, you are on fire today. And excellent point about the gender wage gap. Now I want to go see if I can find data for that, because logically it ought to be true…

  27. Kaleberg Says:

    The $2T estimate for the US underground economy is mainly based on two mechanisms:

    The IRS estimates the tax gap based on the results of auditing a subset of all returns. According to the IRS, most of the gap involves small businesses and the self employed. This is under-reported income, however, not unreported income which is much less of a factor. The roughly $2T number is based on an approximate $345B shortfall and a 15-20% tax rate. The IRS has been estimating this gap since at least the early 90s.
    [https://www.irs.gov/pub/irs-news/tax_gap_figures.pdf]
    [https://www.irs.gov/pub/irs-soi/06rastg12methods.pdf]

    There is the rising quantity of currency, particularly the number of $100 bills. About 65% of all $100 bills are held overseas. In other words, the rising quantity of cash ex-inflation is the US fueling the overseas underground economy. It helps to remember that since 1969, when the $100 bill became the largest US denomination, its value has dropped by a factor of six. One would expect six times as many bills to be held if only to maintain purchasing power.
    [https://www.bostonfed.org/economic/rdr/2014/rdr1403.pdf]

    A third, much weaker, means some use to estimate the underground economy involves rising consumer spending in the face of apparently stagnant wages, but this is commonly seen during depressions. Eventually stuff wears out. Eventually it has to get replaced. One good quarter is all it takes for tales of a massive unseen economy to appear. Retailers haven't been seeing any particularly good quarters lately. I couldn't find anyone who had done any quantitative with this.

    I'm willing to believe there is a large underground economy out there. However, the $2T estimate is in line, ex-inflation, with IRS estimates since the early 1970s. It is mainly based on small businesses fudging expenses, omitting income and not paying SE or payroll taxes. It also seems to have persisted at roughly the same scale during good times and bad, at least as the IRS estimates it.
    [https://www.irs.gov/pub/irs-soi/73-92gtgtaneiy.pdf]

  28. carrstone Says:

    @Kaleberg
    Thanks for confirming the data – not often that happens to me on this site.

    However, whether 'unreported' or 'under-reported', the fact is that tax evasion happens on a massive scale and that's punishable in law.

    But let me remind you why I quoted the numbers in the first place – it was to point out that, contrary to the legal means used by the rich and corporations to minimize their tax bill, a great slew of people are using illegal means.

    The sanctimonious and disingenuous repetition of this mendacious accusation in the face of such dishonesty sticks in my craw.

  29. carrstone Says:

    @Kaleberg
    The last sentence didn't come out right.

    What I meant to say was, "The sanctimonious and disingenuous repetition of the accusations aimed at the rich and the corporations is uninformed at best and mendaciously manipulative at worst and sticks in my craw."

  30. Earl Says:

    carrstone also makes the (giant) leap from $2T of underground economy (possible) to that's going to workers. Small business tax cheats? Sure. That's not going to workers in the sense used in the post (fast food, nursing homes, etc) and, given both irs enforcement priorities plus funding, and the difficulty people who primarily earn through w2s have hiding income, it's probably not going to lots of plain workers.

    More anecdata: I have a bunch of relatively poor relatives in the midwest. Of n = 17 (family I know plus a handful of people who responded to texts), none has significant under the table income. A few have $500ish per year, but nothing like $7k. Even waitstaff have to report a percentage of income as tips these days, plus more and more of them are through cards instead of cash.

  31. Earl Says:

    Also, assuming most people working under the table are not at the high end of the income distribution, and that $10/hour is a pretty good wage tax-free if you're doing eg manual labor or working in a restaurant, $7k/year is 700 hours or 1/3 of a working year. That's a hell of a lot of work. You'll be well aware of that in your friends' lives.

  32. carrstone Says:

    @Earl
    No, you wouldn't be aware because they wouldn't tell you they've broken the law – and, if they do, it's your duty as a citizen to ensure the authorities are informed. Have you no respect for the law?

    You also need to bear in mind that working 'on the black' is not done by the hour but by the job to be done. This means that it's in the worker's interest to get the job done as quickly as possible in order to get to the next one.

    In case you're interested, that's a good capitalistic way of living in the real world.

  33. carrstone Says:

    @Earl
    And on that anecdotal crap mentioned in your first post, don't you think the same principles are at work in the shadow market as in the actual market? Don't you realize that, in every market, the profile of 'much/little' applies? Are you really so naive that you believe that an illegal market is going to concern itself that equality be honored?

    To ram the point home, your family members who don't make more than $500 are engaged in illegal activities but if they don't make more than 5C, they're either not working hard enough or not very good at what they do.

  34. H.M.S. Blankenship Says:

    So carrstone holds the moral high ground on Earl because Earl has not denounced his relatives to the IRS for their off-the-books income, which they won't tell him about, but he (carrstone) is also able to feel superior to Earl's relatives because they have not maximized their hypothetical illegal gains.
    Okay.

  35. Katydid Says:

    @HMS Blankenship; trying to reason with libertarians is like trying to reason with toddlers or characters from Lewis Carroll; reality is whatever they say at the moment and words mean whatever they choose them to mean at that particular moment.

  36. Major Kong Says:

    Basically conservatives think the poor have too much money and the rich don't have enough.

  37. Tim H. Says:

    And don't really want to think too hard about where the money comes from.

  38. carrstone Says:

    @ HMS Blankenship

    I'm not claiming the moral high ground, I'm pointing out that not paying what's due is immoral.

    You know I'm right. By not paying up, Earl's family and millions of others who behave similarly, are depriving recipients of social benefit programs of their fair share.

    And that's not all; their contempt for their fellow man encourages the State to pillage among those who do an honest day's work and who acknowledge their social responsibilities.

  39. John Danley Says:

    There, but by the grace of leverage, go them.

  40. Earl Says:

    It's a little late for glibertarians and/or the well-off to complain about violating the social contract they tore up, lit on fire, then took a steaming dump on. Particularly in the manufacturing heavy areas of the Midwest.

    I'll report my (generally poor) family or friends when 2 bushes, Cheney, and bank ceos start doing hard time.

  41. Mo Says:

    I'm so glad something is sticking in Sock Puppet's craw. Will he make that gagging, retching noise my dog is so uninhibited about performing?

    This is pretty nice:

    Mix one part Calvinism with one part trickle-down economics, add a dash of prosperity gospel, and there you are. We've gone from government providing services to citizens as its raison d'être to government services interfering with God's judgment on the least of them. We can't have government picking the pockets of winners and squandering the Market's blessings on nature's failures.

  42. Emerson Dameron Says:

    Now that I think about it, at least two of my landlords in Chicago were rather blatantly bamboozling the IRS.

  43. mothra Says:

    Whoa, look at the SAT words falling out of carrstone's keyboard! You must be a fan of the Reader's Digest feature "Word Power: Increase Your Vocabulary."

  44. mothra Says:

    You know I'm right. By not paying up, Earl's family and millions of others who behave similarly, are depriving recipients of social benefit programs of their fair share.

    BWAHAHAHAHAHAAAHAHAHAHAHAHAHAHAHAHAAHAHAHA. Oh my, carrstone, you are a funny, funny fellow.

  45. mago Says:

    Carrstone is most prolific in his blathering, "but but but I read reports, I did my homework unlike you so called progressives and blah blah blah". Getting all self righteous about immoral under the table workers cheating the government out of rightfully owed taxes unlike Romney and all the members of his club who would never think of off-shoring their shit.
    Fact is, those who work for cash aren't earning that much and get no benefits now or later. Employers who play this game usually do so to stay afloat in a sea of onerous regulations. If every small business owner, say restaurateurs, played by the rules their products and services would be unaffordable or at least priced higher than the average consumer is willing to pay. Still there are plenty of mom and pops filing their quarterlies and staying alive, it's just that they're doing most of the work.
    Anyway, take a break Carrstone, you need it.

  46. carrstone Says:

    @mago
    Blathering, hey? Talk about the pot calling the kettle black. At least my blathering is grammatically correct and structurally honed.

    I gather from your torrent of ill-phrased bile that you are unable to understand the difference between what the rich and corporations do to minimize their tax bill and the actions of the participants in the shadow economy, so let me help you, again – the actions of the former are legal and those of the latter are criminal.

    And no, I won't give it a rest, it's too much fun seeing how you and your fellow poltroons in this thread refuse to deal with the issue I keep trailing across your path. No sign from you of reasoned argument, just anecdotal evidence, no refuting my numbers, no acknowledgement that a world view other than yours might have merit.

    But then, I didn't expect plaudits but your insults are amusing for being typically progressive, i.e. soaked in moral turpitude.

  47. sluggo Says:

    @carrstone
    re: blathering

    Admitting you have a problem is the first step to solving the problem. Glad to see that you will stop blathering soon.

    Secondly; paltroons, plaudits and progressives? So glad glad to see the Safire writing coarse is now offered to monkeys.

  48. John Danley Says:

    For every potential tax ID number still "lurking in the shadows," there exists an unmitigated exposure to the full rays of malignant exploitation.

  49. Mo Says:

    Am I completely mistaken in understanding Social Security benefits to be a tax upon wages as they are earned? That Social Security benefits do not come from the Income Tax?

    Who imagines that corporate income tax pays for Social Security benefits?

    Or who could be so smug and sanctimonious to say something like this, straight out?

    they don't make more than 5C, they're either not working hard enough or not very good at what they do

    Without even asking what the low-earners are up against that has brought them to such a desperate pass. Just assume that they're lazy and stupid.

    Calvinism as a mental and moral blight has a lot to answer for.

    Al ltogether now:
    Economics is Not A Morality Play!

  50. mago Says:

    @carrstone. Hey, thanks man, reading your response made me laugh for the first time today.
    My, you do splutter when someone tosses a firecracker your way.

  51. Timurid Says:

    There certainly is a massive dark economy in this country.
    What Gallstone gets wrong is assuming that it mostly consists of the poors hocking their food stamps for meth.

    See also; Papers, Panama

  52. Katydid Says:

    Ah, yes, food stamps–is there anything that enrages the glibertarians and conservatives more? They are just *positive* that the poors are taking their $1.05/meal food stamp allotment and blowing it on shipments of caviar, cases of fine wines, cargo ships of king crabs, and entire steers' worth of steaks.

  53. Mo Says:

    mostly Gallstone [tnx, Timurid…snerk!], but just in case anyone missed the first 50:

    http://www.ginandtacos.com/2016/04/18/runaway-job-growth/comment-page-1/

  54. Robert Says:

    When I was younger, I wondered what, if any, wisdom came with age*. One precious bit that I have painstakingly acquired is this: being viscerally torqued up about what other people** are getting away with is like garlic, anchovies or hot sauce. Used judiciously and in appropriate circumstances, it has real value. Slathered vigorously over everything in sight, not so much.

    *Past performance is no guarantee of future results; please consult prospectus for full details.

    **Your choice of which people to get upset about says a lot about who you are as a person.

  55. Major Kong Says:

    I just wonder what he-who-must-not-be-named proposed to do about the underground economy?

    Expand the IRS?

    Create a massive new federal agency to hunt down tax cheats?

    Do away with cash?

  56. Beleck Says:

    lol, the same old scam. Çalvinism/neoliberalism or whatever they call it today. The age old excuse for stealing from the poor to give to the Rich, of course, lol. is there any other way? lol. neoliberalism, feudalism, capitalism. gosh. the name changes are hard to keep with. Words, in the use to scam,degrade and eventually kill off working people, divide and generally keep this Oligarchy running smooth and more efficient. Buy Congress, have "Congress" write pro Corporate laws and Corporations suck us dry, aka Corporate Profits. as it is written, so shall it be, lol.

    just as it is designed, and has been by The R's and D's, St. Reagan, Goldwater and all those "people" so interested in telling the rest of us what is "Right and Moral" et al. Nothing to look at, just move along now!!

    and it works so well. can't have any leeches sucking "our" vast take. the laws are written by those who have the money to have Congress/President enact them. the idea of some leeches/poor suckers find a way to skim some of the profits off. Well, you don't tell the Mafia to get off your turf, unless… and this competition has gotten the attention of those who say that 'untaxed' money belongs instead in some bank account in Panama, or the Caymans, et al

    Our is a Society with "The Lord of the Flies" morality they constantly re-enforce. know your station in life. the "Temporaneously Inconvenienced Millionaires" are finding out the deck is stacked,, now, against them. keep the proles fighting while we "fix" everything. lol

  57. mago Says:

    Since this is yesterday's post and no one will give it another glance, I can feel safe saying I think carrstone may be Ed. I mean, come on, poltroon? Doesn't matter. I'm laughing either way.

  58. Jerry Rogers Says:

    The political fighting over the subject of a fair wage in this country is maddening. We're encouraged to pick a side but both sides aren't trying to fix our problems (the little people). They're too busy drooling over Hollywoods celebrities and the corporate elite. It's shameful.