The Ugly Truth behind the Latest Job Numbers

Low-paying service jobs are nothing to celebrate.

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News of declining unemployment in December had policymakers in Washington feeling guardedly upbeat.

But if you peel off the surface-layer of those numbers, and consider what they mean for the long term, the uptick in jobs is actually pretty grim.

New jobs are fine.

We obviously need more of them, and fast.

[ Read Danielle Kurtzleben: The Many, the Doomed, the Long-Term Unemployed]

But it's equally obvious that not all jobs are created equal.

Via urban theorist Richard Florida's Twitter feed, we see Bureau of Labor statistics showing that, of the 1.9 million new private-sector jobs created in 2011, the majority of them were in the healthcare/social assistance and food service/accommodation sectors.

The Huffington Post notes, "By and large it was lower-paying positions that saw the most job gains."


The healthcare industry saw an especially huge gain of 350,300 workers, helped in part by an unprecedented influx of young men into the industry. And with an aging baby boomer population and its proven attractiveness to those looking for work, the sector is only expected to continue to grow, with President Obama last month even calling for industry wage increases.

Florida gamely tweets that it's "time to make service jobs good jobs."

My question is: How?

[ See a collection of political cartoons on the economy.]

How do we alchemically turn service jobs into "good"—that is, higher-paying—jobs?

Of the presidential wannabes, only former Sen. Rick Santorum talks much about this phenomenon, but he's anachronistically stuck on manufacturing.

What about those dirt-cheap wages of Chinese and Vietnamese? Economists on the left and right believe that, as foreign productivity rates rise to Western levels, so will their wages.

And anyway, as Tim Worstall of Forbes observes:

[T]he onshoring of manufacturing just isn't likely to make much difference to the employment (or if you prefer, unemployment) rate in the U.S. For modern manufacturing really just doesn't employ that many people.

Former Gov. Mitt Romney portentously claims to know everything there is to know about the economy, but his plan is merely a muted version of the supply-side remedies of the late 1970s.

[ Read the U.S. News debate: Will Mitt Romney Be the GOP Presidential Nominee?]

The above jobs picture is the biggest driver of growing inequality in the United States. Yes, regressive tax cuts are a factor. Yes, the extravagant incomes of CEOs and intercontinental jet-setters are a factor. Yes, over-regulation is a factor. But we're all—conservatives and liberals alike—mono-maniacally focused on government. We're lingering at the margins of the problem.

Even with Clinton-era income-rates, middle-and working-class Americans would still be in a rut. They simply can't keep up in a fiercely competitive global economy if their best prospects of employment are in these industries. And by "keep up," I should add that I mean the sort of mass prosperity that most of us intuitively associate with the "American dream."

Look at this way: If the future consists of young workers taking care of ever-increasing numbers of Medicare beneficiaries, then the future's name is spelled d-e-c-l-i-n-e.