The Down Side of Recent Job Growth

The mid-wage positions lost in the recession are being replaced with low-wage, low-growth jobs.

By + More

It's been my contention around here that news of U.S. jobs growth, while better than the alternative, shouldn't cause us to jump for joy.

The reality is, much of the growth since the economy began its snail's-pace recovery in 2009 has been in down-wage jobs. Reporting on a study by the National Employment Law Project, New York Times Economix blogger Steven Greehhouse noted last July that

while 60 percent of the jobs lost during the downturn were in midwage occupations, 73 percent of the jobs added since the recession ended had been in lower-wage occupations, like cashier, stocking clerk, or food preparation worker.

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

The second-worst thing about such jobs is that their already-low wages don't grow very fast. Actually, they grow slower than inflation, which makes it hard for workers to both save and consume.

The Center for Economic and Policy Research recently put out a study showing that 1) this is not a new phenomenon; it's at least 20 years in making; and 2) the United States leads developed countries in its overall share of low-wage workers, with a total of one-fourth of its workforce in low-wage jobs. As of 2009, according to the Organization for Economic Cooperation and Development, the United Kingdom, Canada, Germany, and Ireland rank behind the United States with about one-fifth of their workers earning low pay (defined as less than two-thirds of the national hourly median wage).

Troublingly, the research center's John Schmitt observes that low-wage jobs are not ladders of social mobility and that they seem impervious even to robust rates of economic growth.

[ Check out the U.S. News Economic Intelligence blog.]

The study, alas, doesn't deal with the effects of mass immigration. The evidence is mixed on how much the absorption of high volumes of low-skilled workers depresses wages. But it's certainly a factor.

It seems to me this data should give pause to those inclined to accept Charles Murray's thesis that the decline in white males' participation in the workforce is the result of moral decay.

"The boom years of the 1990s and some of them in the 1980s and even some in the 2000s were really hot job markets," Murray told the Daily Caller. "I mean, there were jobs for everybody that wanted to work. … So why is it during those years you had more and more white males dropping out of the labor force?"

[ See a slide show of Mort Zuckerman's 5 Ways to Create More Jobs.]

"Jobs for everybody that wanted to work" is just the kind of up-from-the-bootstraps oratory that issues all too easily from the lips of social scientists who are comfortably ensconced in rural Maryland.

That the pay for these jobs royally sucks; that there's little realistic hope of advancement—shouldn't this at least complicate the rush to moral judgment?

Of all people, I'm surprised Charles Murray doesn't realize they don't make "booms" like they used to.