Where Have All the GOOD Jobs Gone?

The official unemployment rate has finally fallen below the 9% level (8.9% in February), but does that mean the job market is finally turning around?

Yahoo! News had a revealing?but disturbing?article on the state of the job market last week. In Jobs returning?but good ones not so much, Zachary Roth reports some of the deeper details behind the unemployment benchmark:

  • 49% of the new jobs created over the past year are in low wage industries, such as retail and food processing
  • Higher wage jobs represent only 14% of the new jobs, thought they accounted for 40% of the jobs lost during the recession
  • 9.6% of the workforce are working part time but want full time jobs
  • On the topic of wage levels, the article reported that ?though productivity rose 5.2 percent from mid 2009 to the end of 2010, wages increased by just 0.3 percent. That means only 6 percent of productivity gains were shared with workers. In past recoveries, that figure has averaged 58 percent.?

The last point is, in my opinion, the most telling of the group because it tracks the money actually changing hands. If employers aren?t sharing productivity gains with workers, then earning a living will only be harder in the future. Flat wages are effective pay cuts in an environment of rising prices.

In taking a closer look at under-employment?a statistic that I believe is now more important than the basic unemployment rate?a Gallop poll conducted in mid-February (and linked in the post above) reported the under-employment rate–the combination of the unemployed plus under-employed workers?stands at 19.6%. That?s one out of every five workers in the economy!

Are statistics giving us a legitimate picture of reality?

OK, we can look at as many statistics as we like but the numbers often don?t reflect the reality that we?re experiencing or seeing around us. From what I?m seeing, there are two types of workers right now?those who kept their jobs through the recession and have been largely unaffected by it, and those who lost their jobs and have been unable to get much traction since.

While the first group tend to have a more optimistic view of the job market and of the economy in general, those in the second group go from job to job, often without benefits of any kind, and almost always without any permanence. Re-employment as it played out in past recessions seems to be something of a myth this time around.

The high level of under-employment, in combination with flat earnings and apparent job growth concentrated in low wage industries cries out for a personal plan of action, and I?ll give my thoughts on this in my next post. In the meantime,

What has your employment experience been, and what are you seeing in the people around you?

Did you lose your job during the recession?

If you?ve been re-employed since, are you working full time or part time? Contract/temporary or permanent? Do you have benefits (or at least health insurance coverage)?

If you?re working full time, how does your current income compare to what you had before you lost your job?

Have you started your own business? If so, did you do so because of a lack of opportunities in the job market?

We?re trying to get past statistics here in favor of real life experience, so all opinions are welcome.

( Photo by o5com )

8 Responses to Where Have All the GOOD Jobs Gone?

  1. The only issue I have with the “famous” unemployment/labor reports is that someone is sitting behind a desk and compiling these numbers based on some complicated “formula” and not reality. Until I got laid off in 2008, I had NO IDEA what this “reality” is. LOL, now I do and now understand why the “homeless” population keeps growing. Until the USA sits down and figures out that “reality” is not sitting behind a desk, things will continue as is. On the other side of things, I continue to have HOPE that I will tap into some income sources ASAP. Yes, I have my days like today when I sit and wonder if I will ever get back to “sanity” = being financial comfortable, not rich (but would be nice/lol) – just being able to sleep at nights and not worry how much longer our electric bill be off. Yep, have grown to LOVE candles… Great topic 🙂

    My Blog: A Story of Hope!

  2. Angela – That’s why I largely set this post up with questions for readers! Statistics are numbers on a chart, but the real life stories of people living in and through it are what’s really happening.

    Also, I really do think that the under-employment rate has become more important than the traditional unemployment rate. A person who was making $40,000 three years ago in f full time job with benefits, but only $15,000 now on a part job may not be unemployed any longer, but he or she is certainly not out of the financial woods either.

  3. I think it obvious that a lot of the jobs are going to much cheaper (but still good quality) labor markets.

    It’s kind of a domino effect, one 1 US business goes overseas, they have an unfair cost advantage, so the other follow to be competitive.

    I blame the government for letting unfair labor wage scales let all of our best jobs go overseas. They (the US government and other developed countries) needs to wake up, and soon.

  4. MR – I’m not sure we can blame the government, at least not entirely. Not only is the US a high wage country, but we also are highly regulated and maintain an environment of significant legal risks.

    Developing countries are hungry for industry, and the money and jobs it brings, and just don’t have those risks. So not only does a company lower it’s wage base by moving offshore, but they also lower their exposure to regulation and lawsuits. No one in the US seriously wants to reduce those constraints.

    Still another point is that developing countries are the fastest growing consumer markets. As a nation we’re no longer the be-all and end-all. Other countries have become more attractive, and until we recognize that we have to compete to draw industry that we once took for granted, the job situation here probably won’t improve in a meaningful way.

  5. We’re in a bit of a cycle: Because more people are unemployed or under-employed, they’re spending less. Because they’re spending less, businesses (especially small businesses, where most of the job growth happens) are hesitant to hire a new person. Because businesses are hesitant to hire, people are unemployed. And so the cycle continues.

    My small family business just hired a new person … or, to be more specific, just re-hired the same person that we laid off a year ago. We were sad to see him go; he was a fantastic employee. We just didn’t have the money to pay him anymore. (We ourselves — my family — cut our own salary to $0 and lived off our emergency savings for a year.) Just last month, we started paying ourselves again and re-hired him.

  6. Afford – That’s the kind of story I was hoping to see reported here. So you are actually seeing some improvement in business, at least enough to hire back a laid off worker. I’m not seeing or hearing of that in too many places. It seems that once a job is gone, it stays gone.

    It doesn’t seem that all the job losses are coming from the state of the economy either. Technology is permanently ending a lot of jobs, and that’s why it seems to be so hard to get the unemployed back to work.

  7. What I find scary about that rehiring, is that the worker was still available to be rehired. That means he either had a lousy replacement job or he was still unemployed, neither is a good thing. Glad the business is improving though.

  8. Vitaeus – That’s a good observation. And while I’m glad to hear that he was rehired, that situation seems to be the exception, at least based on what I’m seeing. It seems that it would be a huge advantage to rehire a previous employee, both for the employer and the employee.

    The employer won’t have to train the employee, and the employee can slide back into a job he’s familiar with and probably does very efficiently. The current fascination with throw-away workers seems to be completely counter productive.

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