Most New Jobs Created in the Recovery are Second Rate
While economists and investors are celebrating the new jobs report that shows 255,000 new jobs were added in July, many of the new jobs created in recent years have been second-rate ones. If an individual is unable to live by having just one of the new jobs created, then he or she may need two to survive. Should the country start measuring the quality of the jobs being added and lost within a given month?
When Second Rate Jobs are Created
Second-rate jobs tend to be those that come with lower wages or limited benefits. These kinds of jobs may offer part-time hours, or they may come with a longer commute than a worker wants. A second-rate job may even be from a company that has a depressing work atmosphere or one that expects its employees to work tons of overtime hours.
The job creation number from the employment report conceals all sorts of variations. Each month, millions of Americans voluntarily leave their jobs, are laid off or are fired. At the same time, employers hire millions of Americans to start new jobs. When statisticians establish the monthly job number, they do so by taking the net total of all of these underlying changes. Because of this, the quality of the jobs isn’t established in the report.
According to The Wall Street Journal, some industries report that they are losing jobs while others are adding them. Within different industries, some firms are growing and others are downsizing each month. Some of the jobs on the report come with a high pay rate, but there are others that have bottom of the barrel wages. New jobs may offer 40 hours a week while others only need workers for 15 hours.
What Industries are Growing?
Since 2007, ample job growth has come from a wide range of low-wage sectors. For instance, the food and beverage industry, which features restaurants and bars, has increased by 17 percent. In this line of work, the average weekly pay is around $340. The home healthcare services division has grown as well. In fact, it’s increased by a stunning 48 percent. Those who choose to work in this field make around $550 a week.
What Jobs are Being Lost?
Statistics show that many of the industries that are decreasing their workforce are middle-wage ones. Specialty trade contractors, which hire construction workers, reports that its employment percentages are dropping by around 10 percent. These jobs typically pay more than $1,000 each week. Manufacturing industries are also letting some of their workers go, so the country is losing these middle-wage jobs as well.
Job Growth is Coming from High Paying Industries
It’s a far cry to say that all of the new jobs are low-wage ones. Industries that typically pay high wages have also been adding jobs at a brisk pace. For instance, computer systems design and related services, which is an area that features software developers, is growing. Jobs in this line of work pay an average of $1,731 a week. The information services sector is another high paying field that is adding workers. Internet companies are included in this division, and jobs in the industry pay about $1,350 a week. Management and technical consulting work pays $1,440 a week on average while those who are employed by hospitals typically earn about $1,330 a week.
Employment is Showing Signs of Improvement
The data confirms that more people are earning minimum wage or stuck working part-time hours than they were before the recession. Statistics also verify that these increases mainly happened during the 2008 to 2009 recession.
Over the last five years, the number of part-time and minimum wage employees has decreased. Currently, approximately 2.6 million workers make the minimum wage. This number is higher than the 1.7 million who were making it during 2007, but it is considerably lower than the 4.4 million who were earning it in 2010.
Glancing at the Big Picture
While employers created a number of new second-rate jobs in recent years, high-wage positions are also growing. In fact, The New York Times reports that wages are up by 2.6 percent over the past year. With the large number of jobs created this summer, Americans have every reason to hope that the good news regarding the economy is here to stay for a while. To read more about the recent jobs report or to learn more about the jobs that were generated, visit the PersonalMoneyStore.