The National Employment Law Project looked at the types of jobs lost and created during the last recession and recovery (this data is through early 2014). They found that jobs in low-wage industries (those with hourly wages between $9.48 and $13.33) made up 22% of the total job losses in the last recession. However, these low-wage jobs comprised 44% of those jobs created during four years of the subsequent economic recovery. In contrast, mid-wage industries (those with wages between $13.33 and $20.00 an hour) saw losses of about 3.2 million jobs in the recession, but gains of only about 2.3 million jobs in the recovery. High-wage industries (those with wages above $20.00 an hour) saw about 3.5 million jobs lost in the recession, but only about 2.6 million in job gains in the recovery. In total, jobs in low-wage industries have gained about 1.8 million jobs since the beginning of the recession, while jobs in mid-wage and higher-wage industries have collectively lost about 2 million jobs. In a true economic recovery, we would see the number of higher-paying jobs growing faster than the number of lower-paying jobs. We are seeing the opposite.
A report from 2013 by Rebecca Glauber (“Wanting More but Working Less”), looked at the number of workers that are underemployed, or in involuntarily part-time employment. She found that from 2007 to 2012 the involuntary part-time employment rate rose from 3.6% to 7.8% for women and from 2.4% to 5.9% for men. Her research finds a strong association between part-time employment and economic vulnerability. Besides the lower level of income, part-time workers are less likely to receive other economic benefits, such as health insurance, vacation pay, retirement benefits, etc. This study found that in 2012, one in four “involuntarily” part-time workers lived in poverty compared to one in twenty full-time workers. Part-time employment has a definite place in the economy for a variety of reasons, but it does not replace full-time employment, and part-time wages certainly don’t replace needed full-time wages.
Overall, the number of these workers involuntarily working part-time has fallen since the depths of the recession in 2009 (see chart above), although that number still far exceeds the level at the beginning of the recession. In addition, I think it’s safe to presume that a significant group of those workers no longer counted as part-time workers have joined the ranks of the workers that have left the workforce altogether (see my previous article). For many individuals and families it now makes more economic sense to leave the workforce and apply for government benefits than to work at a low-wage job, particularly a part-time one.
These are not the statistics of a healthy economy despite rosy economic growth or unemployment statistics. A real economic recovery, without government money-printing, artificial debt and deficits, confiscation, economic bribery and social intimidation is always right around the corner, but the difficult transition to get there is more than most Americans (and about all politicians) are willing to endure.