What’s Wrong Today:
The news today comes in two flavors. Bad and awful. Some of you probably saw Sunday’s New York Times article By Annie Lowrey in which she quotes from a National Employment Law Project (NELP) study. The study showed that in the last recession, the economy lost more higher wage jobs than it has gained since then, and it has created more low wage jobs than it had previously lost.
The study found especially strong growth in restaurants and food services, administrative and waste services and retail trades. Those industries — which often pay wages at the federal minimum — accounted for about 40% of the increase in private sector employment over the past four years.
In essence, America’s economy has replaced good jobs with bad ones:
Jobs lost January 2008 to February 2010: 3.579 million
Jobs gained February 2010 to February 2014: 2.603 million
Difference: -976,000
MID-WAGE INDUSTRIES (median wage $13.73-$20.00)
Jobs lost January 2008 to February 2010: 3.240 million
Jobs gained February 2010 to February 2014: 2.282 million
Difference: -958,000
LOWER-WAGE INDUSTRIES (median wage $9.48-$13.33)
Jobs lost January 2008 to February 2010: 1.973 million
Jobs gained February 2010 to February 2014: 3.284 million
Difference: +1.851 million
That’s the merely bad news. The awful news is that this is how we have finally regained all of the jobs lost in the recession that began in 2007.
The next day, the Times published a rebuttal by Justin Wolfers:
Sure. Mr. Wolfers must be a charter member of the Society of Apologists for Plutocrats (SAPs).
Retail employed 15.26 million people (seasonally adjusted) last month. 13.049 million retail jobs were non-management (production and non-supervisory). For those keeping score, that is 85.5% of retail jobs. Those jobs averaged 29.9 hours/week, down a half-hour from a year ago and pay an average of $14.26/hour. That’s a yearly income of less than $22,000. Most jobs in retail are not in management. And most of those working in retail are going to earn less than the poverty level for a family of 4 in the US.
The larger point is that, using the NELP study, 22.4% of the jobs lost in the 2007 recession were in the lower-wage category, but 43.9% of those created since then are lower wage. This trend must be seen not just against the backdrop of the deteriorating quality of American jobs but the country’s growing inequality.
It is clear that hard work and integrity are no longer guarantees of upward mobility in America. We could easily see a corrosive class envy coming to a boil. Here is an illustration of the point:
It’s clear that the top 10%–the class of finance guys, hedge fund managers, technocrats, professionals, and entrepreneurs, have managed to increase their wealth in the past 20 years, while the 90% have just been treading water. A household income of $150,000 a year qualifies as a top 10% income.
Breaking out of the bottom 90% has become only a dream for the average person.
If recent college grads can only find jobs in retail, hospitality and food service, or underpaid/unpaid internships just to cling on to their “dream career”, how can we expect them to get married, purchase a home, purchase a car, purchase the goods and services that will sustain our economy’s fragile recovery?
We are in the late stages of the recovery from the Great Recession. There is a good ch
ance that that the “job creators” will do nothing that brings about any change to the current crapification of our economy.
The old idea of rage against the machines needs to be brought back but against the power of capital. Large corporations are for themselves, not for people. If they do well, they increase capital without reference to the lot of real people.