Sort by

New Jobs Aren't Always Good Jobs

David Callahan

There are a few worrisome wrinkles in today's otherwise cheery employment numbers. First, mass layoffs of state and local government workers continue unabated, with 20,000 public employees fired last month. Second, the lower unemployment rate is partly due to many workers just giving up the job hunt.

But here's a third fact that's troubling: One of the strongest areas of hiring is for temporary workers. About a sixth of all new workers added to payrolls last month were temps of one kind or the other.

With so many employers skittish about future consumer demand, it's understandable they'd be reluctant to make permanent hires. In practice, though, this means that many of the workers landing new jobs right now aren't also getting important things that typically come with jobs -- health insurance, retirement benefits, and paid leave time.

This reflects a broader reality in our post-crash economy: Even when jobs come back, they often aren't as good as the jobs that went away. Unemployment goes down when a laid-off engineer takes a job working as a barista at Starbucks, but so do living standards.

New York State is typical in this regard. A new report by the Fiscal Policy Institute, released earlier this week, found that the state has "lost more than 250,000 middle- and high-wage jobs in sectors such as manufacturing, construction, government, and finance" since 2008. Meanwhile, though, new jobs added during the tepid recovery have generally been crappy: "82,000 jobs have been added in low-wage industries."

As a result, not only are wages and living standards down among those who do have jobs, but so is benefits coverage: 550,000 New Yorkers have lost their health coverage since 2008, bringing the total of state residents without coverage to 2.9 million. New York's low-wage employers offer even less in the way of pension coverage:

Only 40.6 percent of New York’s private sector workforce has employer-provided pensions. New York’s private pension coverage has fallen so much, in fact, that it has the lowest coverage rate among the 21 states in the Northeast and Midwest. Only 10 states in the entire country—all in the South and West—have a lower private pension coverage rate than New York.

Of course, the trend toward worse jobs with lower wages and fewer benefits is not new. The recession has merely amplified an already downward trajectory for many workers. As the report notes:

When New York’s workers are sorted by education attainment level, it is apparent that only those with a 4-year college degree or higher have seen any increase in median hourly wages over the past 22 years. Among workers with less than a high school diploma, real median hourly wages fell by 15 percent between 1988 and 2002, and by 3.1 percent between 2002 and 2010. Workers with only a high school diploma and those with some college but not a 4-year degree experienced moderate real wage declines since 1988.

None of this is to say that productivity isn't rising in New York State. It is: workers are producing more wealth through their labor. The problem is that these gains aren't broadly shared:

Since 2000, GDP per worker has grown more than twice as fast as annual average wages (even counting CEO salaries.) Where do the benefits of this high productivity go? Gross operating surplus—the basis for corporate profits—has grown over six times as fast as average wages.

All this helps explain why, according to the report, the top one percent of New York households received over a third of all income generated in the state in 2007. "The wealthiest one percent of New York State households had an average income in 2007 that was 50 times the average for all households earning from $25,000 to $120,000."

Critics of Occupy Wall Street often ask, mystified, why the movement is so angry at the top one percent. The answer is pretty simple: The gains of this group have often come directly at the expense of everyone else.