A good jobs report, but a new low-wage reality

A barista prepares a drink at a coffee shop in San Francisco, California May 8, 2013. (Photo by Robert Galbraith/Reuters)

A barista prepares a drink at a coffee shop in San Francisco, California May 8, 2013. (Photo by Robert Galbraith/Reuters)

By 
MSNBC, July 5, 2013

The June jobs numbers were better than expected, with 195,000 jobs added last month when analysts were expecting a number closer to 155,000. What’s more, businesses were hiring more people in previous months than originally anticipated, as my colleague Steve Benen explains. That’s all welcome news.

But what kinds of jobs are Americans actually being hired for? Some of the biggest areas of growth in June were in fields that typically pay low wages. Leisure and hospitality rose by a whopping 75,000 in June, the majority of which have been jobs at bars, restaurants, and the like. Another big area of growth has been in retail, which added 37,000 jobs in June. (Those numbers may be a bit high because of the influx of summer jobs—the seasonal adjustment isn’t perfect—but both industries have generally been on the upswing.)

The new jobs are also more likely to be part-time jobs than before the recession. In 2008, the share of full-time workers was 83%, which then dropped to about 80% in 2010, according to Gus Faucher, chief macroeconomist at PNC Bank. That number has edged up slightly, but it’s still only at 80.5%. And last month’s part-time employment numbers have also raised some new concerns.

In June, the number of people who are working part time— because they can’t find full-time work or because businesses can’t afford to hire them full time—rose to 8.2 million, the highest level since October 2012. That uptick may be an anomaly: There’s a lot of noise in the month-to-month data, and the number of such “involuntary” part-time workers has generally been declining. But as with the broader labor market, we’re still a long way off from pre-financial crisis levels:

(Source: BLS)

(Source: Bureau of Labor Statistics)

But what about the quality of jobs that are fueling the recovery? Part of this trend is just a natural part of any recovery from a deep recession. Many businesses are still feeling cautious, and they’ll hire more full-time workers as the economy picks up more steam. The growth in retail, leisure, and hospitality jobs indicate that Americans are spending more money, and that could encourage higher-wage industries to expand as they see that consumer demand returning. There’s also speculation that Obamacare has prompted employers to keep workers part-time to avoid the employer mandate, though that’s now been delayed by a year.

So as the recovery continues apace, more full-time, higher-wage jobs will be coming back as well. But some of those jobs will never return because of economic forces that have been in motion for decades. Though the recovery is well underway, the country still hasn’t figured out how to retool the post-industrial economy, and we’ll continue to bleed well-paying, full-time work until we do so.

“That’s a huge structural issue that gets exacerbated by recessions, but that process has been underway for decades,” said Faucher, who believes some of the full-time jobs we had in 2008 won’t be coming back. The share of full-time to part-time employees “will probably get up to 82%, but then it’s going to resume it’s longer run decline,” he adds.

The takeaway: The uptick in part-time, low-wage work is “terrific news, relative to not creating those part-time jobs, and bad news relative to creating millions more high-paying full-time jobs,” said Justin Wolfers, an economist at the University of Michigan.

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