Economy adds more low-paying jobs
NEW YORK – The economy has put 1.5 million Americans back to work since last summer, but are the new jobs good jobs?
It depends on where you look.
Consider the 12 new workers Sam Facchini has added to his staff at Metro Pizza, a fast-growing mini-chain of three casual restaurants in Las Vegas. They range from a pair of table servers earning minimum wage of $5.15 plus tips, to cooks who earn between $7.50 and $11.50 an hour. Do they typify the new jobs, as statistics largely indicate?
Or are they more like the four new positions added to the payroll in recent months at Katzen Eye Group, a 95-employee optometric practice in Baltimore. The jobs, all requiring training in eye care or billing, pay between $15 to $17 an hour, and with patient traffic surging, that might just be the beginning.
“All of a sudden, with this pent-up demand we are providing two to three years worth of care in a one-year period,” says Dr. Richard Edlow, the practice’s chief operating officer. “The doctors are not going to go out and hire someone until the pressure’s on.”
The economy has lost more than a million jobs overall since President Bush took office in 2001, but it has made gains over the past year.
And with employers hiring again, consternation over the “jobless recovery” has morphed into a highly politicized debate about the quality of the new jobs being added to payrolls. But while statistics show that the mix of new jobs is weighted toward lower-paying positions like restaurant jobs, the reality for workers and employers varies widely in a labor market that is very much in flux.
Economists and critics of the Bush administration who label many of the new jobs as low-paying are largely correct.
The biggest producers of new jobs are employers that pay below average – one of every three new jobs is in restaurants, or in “administrative services” – businesses that includes temp agencies, call centers and janitorial services.
At the same time, the administration and its allies have a valid point when they hail the economy as adding numerous new opportunities, many of them well-paid.
Hiring is surging, for example, at medical offices. Architecture, engineering and other technical service businesses are also adding significant numbers of jobs and there is strong demand for skilled tradesmen expert in masonry and other construction crafts.
“The majority of the new job creation has been in low-paying jobs,” said Sophia Koropeckyj, an economist with consulting firm Economy.com. “But in recent months, it has been more widespread.”
The debate over job quality is hashed over data, but it is really about people. The shifting job mix is important because it could signal permanent changes in the economy and the work people do. The bottom line, analysts say, is that the economy is adding both low-paying and better paid jobs – but they are frequently very poor matches for the positions unemployed workers lost.
“Some good jobs are getting created but they’re not necessarily the jobs people are prepared for,” said Carl Van Horn, director of the John J. Heldrich Center for Workforce Development at Rutgers University. “And then there are the lower-end jobs that are getting created, the Wal-Mart jobs, but those are not necessarily the jobs that people with a college degree want to take.”
Most efforts to figure out if new jobs are good or not rely on how much the positions pay. But the reality of the marketplace is that there are many other measures, many of them highly subjective and difficult to quantify, that figure into the equation.
For example, some of the most aggressive hiring in recent months has been by railroad operator Union Pacific Corp., which has added 3,000 conductors and plans to bring on another 2,000 more this year. The jobs pay about $40,000 to start, with the potential to make $60,000 to $70,000 after two years – figures that sound appealing at a time when opportunities are still limited.
But the company is having a hard time finding people to fill those jobs, mostly because its long, unpredictable hours and requirement for workers in largely rural areas are a tough sell.
“The pay is among the highest of blue-collar jobs,” said John Bromley, a company spokesman. “But it’s not easy recruiting even despite the money.”
Still, pay is probably the best single measure of job quality, and data that look at which jobs are being created and what those jobs pay point to some clear, and potentially powerful shifts in the job market.
On the whole, the larger proportion of new jobs is low-paying positions, according to analysts at Economy.com. Since August, industries that pay below average have increased their total number of jobs at about 1.5 times the rate of industries that pay their workers more.
That reflects the fact that not only are some high-paying industries not growing that quickly, but others – like printing and credit intermediation services – continue to lay off workers.
If you set aside industries that continue to cut jobs and look only at those that are hiring, the mix between low-paid and high-paid jobs appears more balanced. A little more than 53 percent of net new jobs are in lower-paying industries, with nearly 47 percent higher paid.
That is better than at the same point in the last economic rebound, when only about 41 percent of net new jobs paid above average.
But gains in the number of better-paid jobs still fall well short of offsetting the damage done in the downturn, during which 60 percent of all the jobs lost were higher-paid positions.