I know there are millions of people who are out there looking for work — or who have a job but would like to find a better one in terms of pay, benefits, career opportunity and so on.
And I’m convinced that the USA is moving toward — maybe we’re already there — having two economies: one for those at the top with good pay and benefits and one for those at the bottom stuck in lower-paying jobs. The jobs in the middle — manufacturing and so on — are pretty much gone now. And the contentious debate over the pay, benefits, pensions and collective bargaining rights of public employees — including teachers — reflects the fact that many in the private sector are moving to the bottom rungs of the job ladder, not climbing to the middle or top.
So as the economy continues to gain a modest number of jobs during what really has been a jobless recovery from the Great Recession, is any job a good one? And what is the implication in all this for education, particularly for those working toward a college degree?
First the picture on jobs, as reported in The Huffington Post, “U.S. Economy Trades High-Paying Jobs For Low-Paying Positions, Report Finds.”
In the last 12 months, the U.S. economy has largely traded high-quality jobs for poorly-paid positions, according to a new report by the National Employment Law Project.
Though the economy has added more than a million jobs over the last year, new positions have skewed towards relatively low-wage industries, the New York-based non-profit finds in “A Year of Unbalanced Growth: Industries, Wages, and the First 12 Months of Job Growth After the Great Recession.” The report finds a “striking imbalance” between the jobs being added and those lost over the last year:
- Lower-wage industries constituted 23 percent of job loss, but fully 49 percent of recent growth
- Mid-wage industries constituted 36 percent of job loss, and 37 percent of recent growth
- Higher-wage industries constituted 40 percent of job loss, but only 14 percent of recent growth
The industries which have shed the most positions, the report found, were correlated with the housing bust and the struggles of the financial sector. Construction made up 38 percent of job losses in the last year; non-durable manufacturing constituted 19 percent; finance and insurance made up 10 percent, the report found.
“This snapshot suggests that the job opportunities currently available to workers have deteriorated compared to what was available before the recession,” said policy co-director at NELP Annette Bernhardt in a recent press release. “If these trends continue, the slow recovery combined with imbalanced growth could make it much harder for workers to find family-supporting jobs and pose real obstacles to restoring consumer demand. It’s imperative that we keep a close eye on industry growth trends as the recovery proceeds.”
For former labor secretary Robert Reich, the point now is not as much about jobs — as it is about wages. He opines on The Huffington Post, “The Real News on Jobs.”
While the biggest losses were higher-wage jobs paying an average of $19.05 to $31.40 an hour, the biggest gains have been lower-wage jobs paying an average of $9.03 to $12.91 an hour.
In other words, the big news isn’t jobs. It’s wages.
For several years now, conservative economists have blamed high unemployment on the purported fact that many Americans have priced themselves out of the global/high-tech jobs market.
So if we want more jobs, they say, we’ll need to take pay and benefit cuts.
And that’s exactly what Americans have been doing.
Employers have demanded wage and benefit concessions from their unionized workers and often got them. Detroit is creating auto jobs again — but new hires are getting about half the pay that auto workers were getting before. Airline workers are taking home 30 to 50 percent less than they did years ago. And so on.
Conservatives say it’s not enough. That’s why unions have to be busted — and why some governors are seeking to abolish laws requiring workers to become dues-paying union members in order to get certain jobs. Hence, the fights brewing in the Midwest.
Meanwhile, millions of non-union workers have accepted cuts in pay and benefits just to keep their jobs. Health benefits have been slashed, pension contributions from employers dramatically cut, wages dropped or “frozen.”
Millions of private-sector workers have been fired and then re-hired as contract workers to do almost exactly what they were doing before, but without any benefits or job security.
The current attack on public-sector workers should be seen in this light. The charge is they now take home more generous pay and benefit packages than private-sector workers. It’s not true on the wage side if you control for level of education, but it wasn’t even true on the benefits side until private-sector benefits fell off a cliff. Meanwhile, across America, public-sector workers have been “furloughed,” which is a nice word for not collecting any pay for weeks at a time.
At this rate, the unemployment rate will continue to decline. But so will the pay and benefits of most Americans.
Conservative economists have it wrong. The underlying problem isn’t that so many Americans have priced themselves out of the global/high-tech labor market. It’s that they’re getting a smaller and smaller share of the pie.
And in this environment of downward mobility for jobs and wages, Paul Krugman makes an interesting observation in “Dollars and Degrees.” He writes that investments in education may not be the key to economic success since jobs in the future may not require higher levels of skills. Here’s from his Op-Ed:
It is a truth universally acknowledged that education is the key to economic success. Everyone knows that the jobs of the future will require ever higher levels of skill. That’s why, in an appearance Friday with former Florida Gov. Jeb Bush, President Obama declared that “If we want more good news on the jobs front then we’ve got to make more investments in education.”
But what everyone knows is wrong.
The fact is that since 1990 or so the U.S. job market has been characterized not by a general rise in the demand for skill, but by “hollowing out”: both high-wage and low-wage employment have grown rapidly, but medium-wage jobs — the kinds of jobs we count on to support a strong middle class — have lagged behind. And the hole in the middle has been getting wider: many of the high-wage occupations that grew rapidly in the 1990s have seen much slower growth recently, even as growth in low-wage employment has accelerated.
Why is this happening? The belief that education is becoming ever more important rests on the plausible-sounding notion that advances in technology increase job opportunities for those who work with information — loosely speaking, that computers help those who work with their minds, while hurting those who work with their hands.
Some years ago, however, the economists David Autor, Frank Levy and Richard Murnane argued that this was the wrong way to think about it. Computers, they pointed out, excel at routine tasks, “cognitive and manual tasks that can be accomplished by following explicit rules.” Therefore, any routine task — a category that includes many white-collar, nonmanual jobs — is in the firing line. Conversely, jobs that can’t be carried out by following explicit rules — a category that includes many kinds of manual labor, from truck drivers to janitors — will tend to grow even in the face of technological progress.
And here’s the thing: Most of the manual labor still being done in our economy seems to be of the kind that’s hard to automate. Notably, with production workers in manufacturing down to about 6 percent of U.S. employment, there aren’t many assembly-line jobs left to lose. Meanwhile, quite a lot of white-collar work currently carried out by well-educated, relatively well-paid workers may soon be computerized. Roombas are cute, but robot janitors are a long way off; computerized legal research and computer-aided medical diagnosis are already here.
And then there’s globalization. Once, only manufacturing workers needed to worry about competition from overseas, but the combination of computers and telecommunications has made it possible to provide many services at long range. And research by my Princeton colleagues Alan Blinder and Alan Krueger suggests that high-wage jobs performed by highly educated workers are, if anything, more “offshorable” than jobs done by low-paid, less-educated workers. If they’re right, growing international trade in services will further hollow out the U.S. job market.
So the issue in the 2012 elections might not be as much about how many jobs there are — or not — but how many of those jobs are actually worth having and whether this nation can continue to prosper with declining jobs — public and private — in the middle.