The Real News on Jobs

Are we making progress on the jobs front? The Bureau of Labor Statistics reports 192,000 new jobs in February (220,000 new jobs in the private sector and a drop in government employment), and a drop in the overall unemployment rate from 9 to 8.9 percent.

We’re heading in the right direction but far too slowly to make a real dent in unemployment. To get the unemployment rate down to 6 percent by 2014 we’d need over 300,000 new jobs a month, every month, between now and then.

Overall, the number of unemployed Americans – 13.7 million – is about the same as it was last month. The number working part time who’d rather be working full time – 8.3 million – is also about the same.

But to get to the most important trend you have to dig under the job numbers and look at what kind of new jobs are being created. That’s where the big problem lies.

The National Employment Law Project did just that. Its new data brief shows that most of the new jobs created since February 2010 (about 1.26 million) pay significantly lower wages than the jobs lost (8.4 million) between January 2008 and February 2010.

While the biggest losses were higher-wage jobs paying an average of $19.05 to $31.40 an hour, the biggest gains have been lower-wage jobs paying an average of $9.03 to $12.91 an hour.

In other words, the big news isn’t jobs. It’s wages.

For several years now, conservative economists have blamed high unemployment on the purported fact that many Americans have priced themselves out of the global/high-tech jobs market.

So if we want more jobs, they say, we’ll need to take pay and benefit cuts.

And that’s exactly what Americans have been doing.

Employers have demanded wage and benefit concessions from their unionized workers and often got them. Detroit is creating auto jobs again — but new hires are getting about half the pay that auto workers were getting before. Airline workers are taking home 30 to 50 percent less than they did years ago. And so on.

Conservatives say it’s not enough. That’s why unions have to be busted – and why some governors are seeking to abolish laws requiring workers to become dues-paying union members in order to get certain jobs. Hence, the fights brewing in the Midwest.

Meanwhile, millions of non-union workers have accepted cuts in pay and benefits just to keep their jobs. Health benefits have been slashed, pension contributions from employers dramatically cut, wages dropped or “frozen.”

Millions of private-sector workers have been fired and then re-hired as contract workers to do almost exactly what they were doing before, but without any benefits or job security.

The current attack on public-sector workers should be seen in this light. The charge is they now take home more generous pay and benefit packages than private-sector workers. It’s not true on the wage side if you control for level of education, but it wasn’t even true on the benefits side until private-sector benefits fell off a cliff. Meanwhile, across America, public-sector workers have been “furloughed,” which is a nice word for not collecting any pay for weeks at a time.

At this rate, the unemployment rate will continue to decline. But so will the pay and benefits of most Americans.

Conservative economists have it wrong. The underlying problem isn’t that so many Americans have priced themselves out of the global/high-tech labor market. It’s that they’re getting a smaller and smaller share of the pie.

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About Robert Reich 547 Articles

Robert Reich is the nation's 22nd Secretary of Labor and a professor at the University of California at Berkeley.

He has served as labor secretary in the Clinton administration, as an assistant to the solicitor general in the Ford administration and as head of the Federal Trade Commission's policy planning staff during the Carter administration.

He has written eleven books, including The Work of Nations, which has been translated into 22 languages; the best-sellers The Future of Success and Locked in the Cabinet, and his most recent book, Supercapitalism. His articles have appeared in the New Yorker, Atlantic Monthly, New York Times, Washington Post, and Wall Street Journal. Mr. Reich is co-founding editor of The American Prospect magazine. His weekly commentaries on public radio’s "Marketplace" are heard by nearly five million people.

In 2003, Mr. Reich was awarded the prestigious Vaclev Havel Foundation Prize, by the former Czech president, for his pioneering work in economic and social thought. In 2005, his play, Public Exposure, broke box office records at its world premiere on Cape Cod.

Mr. Reich has been a member of the faculties of Harvard’s John F. Kennedy School of Government and of Brandeis University. He received his B.A. from Dartmouth College, his M.A. from Oxford University, where he was a Rhodes Scholar, and his J.D. from Yale Law School.

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3 Comments on The Real News on Jobs

  1. alot home depot and lowe’s part time weekend jobs in that report. america is becoming a nation of shelf stockers.for only 40 grand u can get a degree from university of phoenix in shelf stocking

  2. It’s disturbing how many people are simply ignorant on the issue of unemployment; congratulations to MSM for numbnutted stupidification on this topic. Let’s review:
    1. Approximately 9% of the estimated total U.S. civilian workforce is currently filing for unemployment insurance benefits.
    2. The workforce grows by approximately 100,000 per month.
    (The net of births [i.e. turning 16], immigration, etc. all the way down to prison releases)

    The unemployment rate is calculated as X divided by Y. However Y is increasing by 100K per month. Therefore – and this is just third grade math – if there was not a single job created in one month – the rate would actually go DOWN. Even though MORE are unemployed than the horrible month before!

    Furthermore, as noted in the article, those people who have given up and no longer report to unemployment offices – ARE REMOVED. LOWERING the reported value even further.

    wallstreetpit does a very good job on the topic on this webpage. But the MSM is clueless, trumpeting the headline number of 9% or so. That unemployment rate, provided by the BLS, is as shown above by DESIGN going to tend toward a 0.0% value, even when all hell is breaking loose.

    But don’t worry. The Bernank is on the job. Just like he is with inflation. God help us.

  3. “The charge is they now take home more generous pay and benefit packages than private-sector workers. It’s not true on the wage side if you control for level of education’,

    What does education have to do with demand ?
    Income is not based on how hard you work but on what you have to offer. Some public workers are very good and essential but to many are not offering a service that we would purchase on a voluntary basis. Public workers is almost an oxymoron but lets be polite and call them Government Employees.

    The US as been spending its future growth thanks to A) Big Government dependency)B) The Federal Reserve Bank and C) The financialization of the economy.

    We have now low income jobs serving clients that are buying goods on credit and that are produce in other countries. You can’t have wealth by not producing and consuming every thing on credit. It only ends up costing more and will creates more and more income disparities. More than 40% of the economy is financial that is where the big disparity of income comes from. Most of the 8400 banks where good and acting as such but the Federal Reserve made sure to save the worst and highly leveraged Casino on Wall Street and if its possible they ended up even bigger.

    A free market with out failure is a absolute recipe for a gigantic failure. The system can not correct it self and the Fed is being very instrumental in this. The FED is now facilitating the biggest wealth transfer of all times.
    Money moves from producing entities in to parasitic entities and so does wealth.

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