Unemployment May Look Like It's Improving But Lack Of Job Quality May Hamper Spending, The Primary Recovery Driver

Thursday, August 30, 2012 23:38
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Unemployment May Look Like It's Improving But Lack Of Job Quality May Hamper Spending, The Primary Recovery Driver

Tags: Economic Outlook | economy | U.S. economy

Recent employment numbers seem to be improving and giving hope to investors looking for signs that the economic recovery may finally be gaining better footing. But little is being said about the quality of the new jobs being created or how much they pay.

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Most of the jobs that were lost during the downturn paid salaries in the middle range.
 
Most of the new jobs being created during the recovery are low paying.
 
The National Employment Law Project report says the fact that many middle-wage jobs have been lost points to what is called a hollowing out of the workforce. The loss of many middle-wage, mid-skill jobs has probably been accelerated by the loss in public jobs.
 
So the deficit shown by unemployment is not just in jobs, it’s also a loss in job quality.
 
The report organized jobs into three groups, the middle group of which consisted of construction and manufacturing and information. Sixty-percent of the jobs lost during the 2008 crisis were in this middle group.
 
Even though unemployment has improved since then, these mid-level jobs have only represented 22% of new job growth. High paying jobs, on the other hand, represented about 19% of job losses during the crisis and have represented about 20% of new employment.
 
This has resulted in a polarization of job growth, a phenomenon that has characterized each of the last three recoveries. The current one has accelerated this polarization as companies have been forced by financial pressures to reorganize themselves faster.
 
Increased infrastructure jobs would help alleviate the problem but, so far, Congress has resisted measures to create such jobs.

 

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