Posted by: JanF | November 11, 2011

American Jobs, Part II – Left Behind

Family supporting jobs are those that pay a living wage. Nowadays they are quite literally “jobs” … where the head of the household has more than one job to make ends meet. And in many cases those two ends are separated by an ever increasing gap.

Yesterday, we discussed the decline of manufacturing and that many of the things we buy are NOT made in America. Today we will look at the jobs that are left after our factories close.

The recovery from the Great Recession of 2008 is increasingly known as a jobless recovery. That is because the recovery is in GDP only and job growth is more or less flat. However, the jobs that are being added are not the same jobs that were lost. High-paying manufacturing and technology jobs are being replaced by service jobs and many of those jobs pay minimum wage. The problem of lower paying jobs replacing higher paying jobs did not start with this recession. But until we understand what happened to jobs, we will have a hard time dealing with the current jobless problem.

The American dream?
Whenever I think of people working more than one job to make ends meet, I am reminded of a quote by George W. Bush in 2005 to the single mother of three in Nebraska:

“You work three jobs? Uniquely American, isn’t it? I mean, that is fantastic that you’re doing that.”

Or Michele Bachmann, “bragging” about the workers in Minnesota:

I am so proud to be from the state of Minnesota. We’re the workingest state in the country, and the reason why we are, we have more people that are working longer hours, we have people that are working two jobs.

These epitomize the cluelessness of the political class and those completely out of touch with working people and their lives. And it was also a stark reminder that not all jobs are the same.

This chart from yesterday showed the “recovery” and what is happening with jobs.

graphs generated at www.econreview.com

Take a look at that blip about a third of the way into 2010. That was from census jobs, temporary jobs that ended after the census was taken. That blip is important because those are the kind of jobs we are replacing our family supporting jobs with. The blip says “looky here, more jobs!” but it says nothing about the quality of those jobs.
 
Middle class jobs fuel our economy
We don’t need factories and manufacturing simply for their own sake. We need factories and manufacturing because the jobs that are created are good jobs. Those are the jobs that created the middle class, the jobs that put buying power into the hands of more Americans to fuel the economic engine. Regardless of your beliefs about the value of fueling that particular economic engine,in the short term, it is all we have.

The losses are severe. According to the Economist

“For the first time since the Industrial Revolution, fewer than 10 percent of American workers are now employed in manufacturing” (Oct. 1, 2005). But even this figure is probably double the actual percentage, because many workers in a typical manufacturing firm have service-type jobs. In comparison, during the 1970s, approximately 25 percent of American workers were employed in manufacturing. From 1990 to present, manufacturing jobs have decreased every single year; since 1996, they have plummeted by almost one fifth.

 
Fighting over the scraps
This story out of South Carolina underscores the state of our job market:

When German automaker BMW put out the call recently to hire a thousand factory workers here, the people who responded reflected the upheaval occurring in the U.S. economy.
Among the applicants: a former manager of a major distribution center for Target; a consultant who oversaw construction projects in four Western states; a supervisor at a plastics recycling firm. Some held college degrees and resumes in other fields where they made more money.

But they’re all in the factory now making $15 an hour – about half of what the typical German autoworker makes.

The trade debate in the United States usually focuses on the jobs lost to factories in the developing world. But the recession has forced countless skilled workers in this country to consider jobs they would have rejected in the past. They now offer foreign manufacturers a resource that was far less common just a few years ago: cheaper wages for better talent.[…]

But the price of having a more globally competitive workforce means more in the United States could fall well short of the middle-class living standards that manufacturing workers once could expect. Wages adjusted for inflation have declined for these workers since 2003.

By the way, that German factory worker who gets paid twice as much as the American building the same vehicle in America? He also gets health care and an average of 35 paid vacation days.

Lower pay jobs have been trending upward for some time:

For years, long before the recession began, job growth had become increasingly polarized in this country. High-paid occupations that require significant amounts of education and training grew rapidly alongside low-wage, service-type jobs that do not, according to David Autor, a labor economist at the Massachusetts Institute of Technology.

The growth of these low-wage jobs began in the 1980s, accelerated in the 1990s and began to really take off in the 2000s. Losing out in the shuffle, Dr. Autor said, were jobs that he described as “middle-skill, middle-wage” — entry-level white-collar positions, like office and administrative support work, and certain blue-collar jobs, like assembly line workers and machine operators.

It is not just factory jobs that have been lost in the “free” trade fueled outsourcing of our jobs. We have also lost hundreds of thousands of high-tech, information technology jobs. During the 2000’s, the U.S. lost over 820,000 jobs in the information sector.
 
The jobs that are left
Bernie Sanders is a champion of working people and he and his staff put together the numbers for Vermont. Here they are:

In Vermont, there will be more than 400 new openings each year for both cashiers and home care aides through 2018 – the highest level of openings for any position in the state. Another 362 positions are expected each year for retail sales during the same time period, according to Labor Department projections. The problem: the median income for those three fields is $18,730, $21,130 and $22,840, respectively – and those are the three occupations with the most openings in Vermont through 2018. Median means half earn more and half earn less.

There are 65 types of positions that are defined as “high demand” in Vermont, but just 10 fields are projected to have more than 100 openings each year through 2018. Just three of those occupations earn an average of least $20 an hour, according to an analysis by Sen. Bernie Sanders’ Office (executive secretaries, $20/hour; registered nurses, $30/hour; accountants, $31/hour.) See the full chart (PDF). There are nearly 500 different job categories in Vermont.

A study by the Center for American Progress talked about the polarization of the job market:

The structure of job opportunities in the United States has sharply polarized over the past two decades, with expanding job opportunities in both high-skill, high-wage occupations and low-skill, low wage occupations, coupled with contracting opportunities in middle-wage, middle-skill white-collar and blue-collar jobs. Concretely, employment and earnings are rising in both high education professional, technical, and managerial occupations and, since the late 1980s, in low-education food service, personal care, and protective service occupations. Conversely, job opportunities are declining in both middle-skill, white collar clerical, administrative, and sales occupations and in middle-skill, blue-collar production, craft, and operative occupations.

Ecomomists are increasingly gloomy about the prospects of many of these jobs coming back:

“There will be jobs,’’ said Lawrence Katz, a Harvard University economist. “The big question is what they are going to pay, and what kind of lives they will allow people to lead. This will be a big issue for how broad a middle class we are going to have.’’

On one point there’s broad agreement: Of 8 million-plus jobs lost to the recession — in fields such as manufacturing, real estate, and financial services — many, perhaps most, aren’t coming back.

In their place will be jobs in health care, information technology, and statistical analysis. Some of the new positions will require complex skills or higher education. Others won’t — but they won’t pay much, either.

 

Do we just give up? Are there any solutions? Can we get these jobs back? Tomorrow, we will look at some ways to create jobs by rebuilding our industrial base and how to promote policies that encourage that.

(A version of this was originally posted on 12/10/2010 at BPI Campus)

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