Such facts highlight a hidden crisis within the latest disappointing labor report: What little employment growth has occurred since the financial crisis has skewed toward low-paid, lower-skilled work. A survey by the National Employment Law Project found that three-quarters of the jobs created in the U.S. last year were in industries paying an average of less than $15 per hour. The three fastest-growing occupations in 2010: retail sales, cashiers and food preparation, with median wages of less than $10 hour.
Local labor trends highlight the shift. As the San Diego Tribune found earlier this year in a microcosm of what is happening more broadly around the country:
Of the 50 professions projected to have the most job openings in San Diego County through 2018, 23 pay a median salary of $25,000 or less, including retail clerks, cashiers, waiters, waitresses, maids and security guards. Nine others pay less than $35,000, including medical aides, office clerks, teachers' assistants and receptionists. Only 11 pay above the county's median income of $47,700.This isn't to dishonor lower-paid work. Clearly, we need fast-food servers, clerks, security guards, janitors, home health aides, waste-removal personnel and many others who work in the service sector. But it is to recognize that the American economy, 70 percent of which consists of consumer spending, will struggle to recover -- ever -- if most new jobs are in low-wage sectors and the U.S. military.
It's also to understand that the maldistribution in job growth points to a related socioeconomic trend that, while predating the recession, has since gathered speed -- the weakening of the American middle class. As one economist told the Trib:
"Even before the Great Recession, we were headed into a bifurcated economy, where people with real high educations were doing very well and people without skills were not," said Alan Gin, economist at the University of San Diego. "The Great Recession has exacerbated that situation, wiping out jobs that used to be held by people who had relatively low education and skills but still were able to find pretty-good-paying jobs. A lot of those are gone and are not coming back."Indeed, most of the employment losses during the slump have been in mid-level white-collar (sales, administrative support, non-managerial office, for instance) and upper-level blue-collar jobs (construction, manufacturing), writes TheAtlantic.com's Don Peck in a superb piece analyzing the decline of Middle America.
That trend goes back decades. Economists David Autor and David Dorn have found that between 1980 and 2005 job growth was fastest at the margins of the labor market -- namely, the highest- and lowest-skilled workers (see chart at bottom; click to expand). For the least-educated and lowest-paid, the share of U.S. labor hours rose by 30 percent during that period after having been flat in the preceding three decades. Contrary to popular belief, demand for such workers has actually pushed their wages up (if barely to subsistence levels, it's worth noting).
It is largely in the middle that jobs are vanishing, a trend that has only accelerated since 2007. Perhaps even more disturbing, it isn't clear when this will end, or what mixture of political, economic and cultural forces will end it. That "hollowing out" of America is reflected in growing income inequality. Peck notes that the gap between rich ad poor usually narrows during a recession. Between 2007 and 2009, however, it widened, a sure sign that the economy is distributing economic rewards unevenly.
As our political leaders are fond of saying in decrying the federal debt, that trend is "unsustainable." Former U.S. Labor Secretary Robert Reich makes a key point in emphasizing that workers are consumers and consumers are workers. It isn't enough for this country to create jobs -- we must create good jobs. Poorer workers make a poorer nation.
Employment chart courtesy of the Center on Budget and Policy Priorities; chart at bottom from "The Growth of Low Skill Service Jobs and the Polarization of the U.S. Labor Market," by David Autor and David Dorn; Uncle Sam image from Flickr user DonkeyHotey