[Livingwage] Fwd: NYTimes.com Article: More Jobs, Worse Work

[Belden Fields]

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>Date: Thu, 22 Jul 2004 10:50:25 -0500
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>From: Carolyn Mullally <mullally at uiuc.edu>
>Subject: NYTimes.com Article: More Jobs, Worse Work
>
>More Jobs, Worse Work
>July 22, 2004 / New York Times
>  By Stephen S. Roach
>
>The state of the American labor market remains the defining
>issue of the current economic debate. Through February, the
>United States was mired in the depths of the worst jobless
>recovery of the post-World War II era. Now, there are signs
>the magic may be back. More than a million jobs have been
>added to total nonfarm payrolls over the past four months,
>the sharpest increase since early 2000.
>
>These gains certainly compare favorably with the net loss
>of 594,000 jobs in the first 27 months of this recovery.
>But there's little cause for celebration: the increases
>barely make a dent in the weakest hiring cycle in modern
>history. From the trough of the last recession in November
>2001 through last month, private sector payrolls have risen
>a paltry 0.2 percent. This stands in contrast to the nearly
>7.5 percent increase recorded, on average, over the
>comparable 31-month interval of the six preceding
>recoveries.
>
>Nor is there much reason to celebrate the type of jobs that
>have been created over the past four months. In general,
>they have been at the lower end of the economic spectrum.
>
>By industry, the leading sources of hiring turn out to be
>restaurants, temporary hiring agencies and building
>services. These three categories, which make up only 9.7
>percent of total nonfarm payrolls, accounted for 25 percent
>of the cumulative growth in overall hiring from March to
>June. Hiring has also accelerated at clothing stores,
>courier services, hotels, grocery stores, trucking
>businesses, hospitals, social work agencies, business
>support companies and providers of personal and laundry
>services. This group, which makes up 12 percent of the
>nonfarm work force, accounted for 19 percent of the total
>growth in business payrolls over the past four months.
>
>That's not to say there hasn't been any improvement at the
>upper end of the labor market, with the construction
>industry leading the way. At the same time, there has been
>increased hiring in several of the higher-end professions:
>there is more demand for lawyers, architects, engineers,
>computer scientists and bankers. Manufacturing, however,
>has continued to lag.
>
>Putting these pieces together, there can be no mistaking
>the unusual bifurcation of the recent improvement in the
>American labor market. Lower-end industries, which employ
>22 percent of the work force, accounted for 44 percent of
>new hiring from March to June. Higher-end industries, which
>make up 24 percent of overall employment, accounted for 29
>percent of total job growth over the past four months.
>
>In short, jobs are growing at both ends of the spectrum,
>but the low-paying jobs are growing much more quickly. The
>contribution of low-end industries to the recent pick-up in
>hiring has been almost double the share attributable to
>high-end industries.
>
>An equally dramatic picture emerges from the survey of
>American households. According to the Bureau of Labor
>Statistics, the total count of persons at work part time -
>both for economic and non-economic reasons - increased by
>495,000 from March to June. That amounts to an astonishing
>97 percent of the cumulative increase of the total growth
>in employment measured by the household survey over this
>period. By this measure, as the hiring dynamic has shifted
>gears in recent months, the bulk of the benefits have all
>but escaped America's full-time work force.
>
>Finally, the occupational breakdown of the American labor
>market, as also sampled by the survey of households,
>provides yet another facet of the character of the recent
>hiring upturn. It turns out that fully 81 percent of total
>job growth over the past year was concentrated in low-end
>occupations in transportation and material moving, sales
>and repair and maintenance services. At the upper end of
>the occupational hierarchy, increases in construction and
>professional jobs were partly offset by sharp declines in
>the numbers of production workers, who mainly toil in
>manufacturing plants.
>
>Consequently, from three different vantage points -
>employment breakdowns by industry, by occupation and by
>degree of attachment - the same basic picture emerges:
>While there has been an increase in job creation over the
>past four months - an unusually belated and anemic spurt by
>historical standards - the bulk of the activity has been at
>the low end of the quality spectrum. The Great American Job
>Machine is not even close to generating the surge of the
>high-powered jobs that is typically the driving force
>behind greater incomes and consumer demand.
>
>This puts households under enormous pressure. Desperate to
>maintain lifestyles, they have turned to far riskier
>sources of support. Reliance on tax cuts has led to record
>budget deficits, and borrowing against homes has led to
>record household debt. These trends are dangerous and
>unsustainable, and they pose a serious risk to economic
>recovery.
>
>We hear repeatedly that the employment disconnect is all
>about productivity - that America needs to hire fewer
>workers because the ones already working are more
>efficient. This may well be true, but there is a more
>compelling explanation: global labor arbitrage. Under
>unrelenting pressure to cut costs, American companies are
>now replacing high-wage workers here with like-quality,
>low-wage workers abroad. With new information technologies
>allowing products and now knowledge-based services to flow
>more easily across borders, global labor arbitrage is
>likely to be an enduring feature of the economy.
>
>Hiring always moves up and down. But it is evident from the
>experiences of Europe and Japan that new structural forces
>can come into play that have a lasting impact on job
>creation. Such is now the case in America.
>
>It was only a matter of time before the globalization of
>work affected the United States labor market. The character
>and quality of American job creation is changing before our
>very eyes. Which poses the most important question of all:
>what are we going to do about it?
>
>Stephen S. Roach is chief economist for Morgan Stanley.
>
>
>http://www.nytimes.com/2004/07/22/opinion/22roac.html?ex=1091510407&ei=1&en=8e9dbbc506073295
>Copyright 2004 The New York Times Company