Filed Under:  U.S. & World

Is there an employment recovery when most new jobs pay peanuts?

Contributed by on January 11, 2015 at 1:07 am

Business Woman working for peanuts

I really hate using Mark Twain’s often-quoted quip about lying and statistics but the topic of this post really gives me no other option. The sage of 1800s American literature really nailed it on the head-at least as far as US unemployment figures are concerned: there are lies, damn lies, and statistics. As rosy as US labor figures may have been recently (what’s not to love about the slide from the 7% range to the 5% range?), the statistics tend to conceal one harsh reality of the so-called ‘recovery’ happening in the US right now: most of the jobs being created pay peanuts.

In fact, there’s been an explosion in part time employment in the US. This tends to distort the statistical profile of the US job market. Sure, these are jobs but they aren’t all that secure. Worst of all, they don’t pay all that much. Gone are the days of the American Dream where someone can just have a high school diploma, get a job and manage to buy and pay off a home. All in one lifetime. The 2010’s version of that Dream is that you have to hustle to get several part-time jobs and devote a decent chunk of your income to health insurance. It is no surprise that, trailing the positive employment figures, Americans still think the country is going down the wrong path.
Another particularly sticky consequence of a recovery that leans heavily on part-time or service sector low paying jobs is the political reality of massive income inequality. Thanks to the equities boom in Wall Street fed by quantitative easing and other central bank policies, there’s a huge gap between rank and file Americans and the top 5% and top 1%. In fact, even in the upper reaches of the American net worth hierarchy, there is a huge chasm between the rich and the ultra rich. Talk about millionaires feeling like paupers because their neighbor up the street has an extra set of 3 zeroes to his or her net worth. This is the kind of reality we live in and it is very unstable-recovery or not. When it comes to political stability and economic sustainability, the focus should not just be on the quantity of jobs but their quality as well.