Low unemployment isn’t worth much if the jobs barely pay
Source: Brookings Institution
Each month, the Bureau of Labor Statistics releases its Employment Situation report (better known as the “jobs report”) to outline the latest state of the nation’s economy. And with it, of late, have been plenty of positive headlines. But those numbers don’t tell the whole story. Are these jobs any good? How much do they pay? Do workers make enough to live on? Here, the story is less rosy.
In a recent analysis, we found that 53 million workers ages 18 to 64—or 44% of all workers—earn barely enough to live on. Their median earnings are $10.22 per hour, and about $18,000 per year. Other research suggests that there are not enough decent-paying jobs for people without bachelor’s degrees. This matters—workers without bachelor’s degrees make up not just the majority of the low-wage workforce but the majority of the labor force as a whole, so the shortage of such jobs has wide-ranging consequences. Even with sunny job statistics, the nation’s economy is simply not working well for tens of millions of people.
Jobs Shortage: Nick’s take
While the feds and the media cheer “the great jobs numbers,” the dirty little secret is wages. Brookings scrapes the lipstick off the pig, and all that’s left is a pig. There’s no talent shortage; there’s a good-paying jobs shortage. Brookings focuses on the 44% of all workers who make barely enough to live on — and that’s troubling enough. What Brookings misses is more highly educated workers who are earning less than they used to.
Which one are you?
What’s your take?
Are you earning as much as you used to? What category in the Brookings report do you fall into? Are there really more good-paying jobs than there is talent to fill them? How many lower-paying jobs would you need to have at once, to earn what you once earned?
See also B.S. on the jobs numbers euphoria.
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I think the report is completely right. I have a BA ind physics and a PhD in nuclear engineering and I can’t find a decent job. Apparently my expertise is not exactly what the job is and thus I am completely unqualified. Companies don’t want to train anymore.
Wharton labor expert Peter Cappelli has shown very clearly that employers’ investment in training, development and on-boarding has shrunk dramatically. They want “just in time” workers, preferably “hired” at arm’s length from a staffing firm (translation: human puppy mill).
My advice: Pick a small handful of companies you’d like to work for. Focus on one or two specific areas in those companies. (DO NOT look for job postings. Study the business.) Study what problems and challenges they face. Pick 3 specific things they need help with. Then, and only then — you must first define the problems –, carefully and thoughtfully pick a small handful of your skills, credentials, abilities that you could apply to tackle those specific problems. Map them. The map for each job will be different.
That’s your business plan for each of those jobs. Then you must track down the manager you’d be working for — and talk to him or her. This may help: https://www.asktheheadhunter.com/5675/getting-in-the-door
This story indicates that wage growth IS improving.
https://www.nytimes.com/2019/05/02/business/economy/wage-growth-economy.html
@J: It’s interesting that the first graph in that NYT article is captioned “Not adjusted for inflation.” Like anything else, wage numbers exist in a context – a context that the Brookings report discusses and that the NYT completely ignores and makes no effort to address.
That context is obvious: Can people afford to live on these “higher” wages? The bigger context is scary and ugly. The disparity in the ratio of compensation between C-level execs and the average employee has sky-rocketed.
So the NYT and the BLS need to explain why executive wages have increased exponentially compared to wages of other workers, about half of whom can’t live on their “higher” wages.
The question is, why are economists selling this palaver?
If the Federal Reserve is pumping $110 billion into the economy, it can’t be doing that great.
https://markets.businessinsider.com/news/stocks/fed-repo-injects-110-billion-into-market-amid-surging-demand-2019-9-1028556859
Good point.
I am 56 years old with no Bachelors degree or associate degree. I went to nursing school between 1983 -1986 and obtained a nursing diploma which allowed me to sit for nursing boards. Throughout my career I was pressured into going back to school and get my bachelors degree then masters degree etc. I thought to myself no way I am going to waste my money. I already do the job at a high-level with excellent evaluations and leadership skills. What value would it bring the organization that I’m working for to go back to school To obtain BSN MSN PHD? NONE ! I have however obtain advanced credentials in critical care, interventional cardiology, electrophysiology and now I a certified clinical documentation specialist working from home for a great organization In revenue cycle management area. Nicks series of books have helped me over the years to negotiate with employers and got me to where I am in my professional life today.
Regarding the Fed, everyone must read
THE CREATURE FROM JEKYLL ISLAND
A Second Look at the Federal Reserve
by G. Edward Griffin
Chapter 10 the Mandrake Mechanisms
1. A degree is no guarantee for decent employment or success. I don’t give a rip about the so called “statistics” that so called “experts” through out there. This antiquated myth has done irreparable damage to a lot of Millennials and Z Generation folks (although Z Generation isn’t buying into as much), not to mention putting them into insurmountable debt. 2. In my day job, everyday, I deal with industrial accounts who are in dire need of skilled welders, machinists, and machinery maintenance mechanics, and most offer decent wages and benefits. But, people (both young and old) don’t want those jobs, nor do they want to go to 9-18 month vocational programs to get basic training for an entry-level job in these trade jobs, or even take at advantage of the few that may offer on the job trading/earn while you learn. The pipe fitters union in my city has been recruiting legal Mexican immigrants into their apprenticeship programs because local folks aren’t interested. I hear the same from plumbing and electrician contractors I deal with. A man in my church owns a successful HVAC/Plumbing company. He’s 60, has back trouble, and recently suffered a coronary. He’s been searching for a long time to find a young person to train, then turn over his business, customer list, trucks, and equipment to. No takers. 3. Many people I meet, are demanding unrealistic “doctors wages”. 4. Granted, there’s an abundance of lower-level/lower-paying jobs out there. Get a supplemental side gig. I’ve been doing it for 7 years now. 5. Take jobs in unglamorous industries, that can pay more. I think a lot of people just don’t want to work!
Well said and so true!
It seems the Department of Labor and the Bureau of Labor Statistics are writing the happy headlines themselves — and avoiding the pesky details. But when Brookings enumerates the market forces behind the real problem, they’re missing one that I wish they would look into: the employment system itself.
Two issues:
(1) the virtually ubiquitous intermediation of employment across America, whereby workers do not get hired by employers but by well-insulated “staffing firms” that rent them out with virtually no risk, and
(2) the economically indefensible automation of recruiting and hiring, which puts further distance between employers and labor.
The cost of recruiting and hiring has dropped to almost zero. Thanks to Indeed, ZipRecruiter and associated Applicant Tracking Systems (ATSes) I can get 1,000 applicants for about $50. Thus the value of the n-th worker being recruited approaches zero — while employers buy the fantasy that “the perfect hire” is out there and merely a function of how many keywords are used to “find” them. It’s no secret (ask any job seeker) that matching workers to jobs has become a crapshoot, but a database jockey’s wet dream (ask any employer).
All the value of “recruiting automation” goes to the owners of the “recruiting technology” — while HR and employers cry there’s a “talent shortage.” Meanwhile, to return to the point of the Brookings report, most workers are making less.
My point is that it’s largely because the “staffing firms” are sucking up the “handling fees” that real employers would ordinarily invest in higher wages/salaries. The employment system is not a zero-sum game. Increasing corporate profits don’t go into wages — but they are spent on intermediaries that add no value to the economy.
The employment system itself is the missing structural link to the wage problem. Recruiting technology is making this intermediation process possible by turning workers into keywords that are bought, sold, rented and discarded — all at a discount. See https://www.asktheheadhunter.com/10569/consulting-cluster-fck-economy
Came across this one recently, graphic designer for up to a whopping $14.50/hr — https://theupsstore0738.hyrell.com/UI/Views/Applicant/VirtualStepPositionDetails.aspx?enc=HHXWeoO8zSlCdh6q6hRvw89r1c_Zyvq9Qz4trDGXLIB5Fhp2dYw_bwhPMhZcoTT0&tzi=Eastern%20Standard%20Time
That salary is on par with what I earned back in the mid 1990s as a secretary where the only necessary skill was to type and answer phones (my first design job in 1997 paid $18/hr). My guess is they get away with offering such a low salary because they probably get dozens of applicants. I still see this on StinkedIn where the # of applicants for the direct job posts routinely show over a hundred applicants. I remember the “full employment” of Massachusetts back in the late 1980s, you advertised a job and you were lucky to get 2 or 3 applicants. Hundreds of applicants during “full employment” smells fishy to me…
As usual, Brookings has it right. This week, mainstream media is trumpeting that “Despite a 4Q2019 slowdown in the pace of U.S. hiring, as of today, there are still more open jobs than there are people who are unemployed.” The implication is: If you can’t get a job, don’t blame the economy. Hmmm…sounds just like certain campaign promise of yesteryear: “A chicken in every pot, and a car in every garage.”
I agree – wages have definitely gone down, but the cost of living continues to skyrocket. I used to work 85 hours a week, which isn’t sustainable for very long. I got laid off nearly a year ago, and I’m being asked to take jobs that are at least $5/hr less, yet rent, food, gas, utilities, and insurances never go down. I can’t pay bills on a 35%-40% pay cut, and I won’t qualify for social services because I’d still be barely above the poverty levels. I don’t want a hand out, I want a decent paying job, and wages are sinking to a 30 year low.
I used to think it was horrible when one’s credit report determined whether or not you got the job, now you have to jump through hoop after impersonal hoop. “Don’t forget to send your thank you card for the interview!” all while being treated to the best AI “gaming experience” the companies have to offer. “Gaming experience”?? They’re trying to tailor the “job process” to resemble a video game?! Being able to provide for yourself is not a game, it’s real, insulting, and flat out insensitive.
If it’s not the tests, then it’s no degree (where one was never needed before), and if you pass the assessments and have a degree, then it’s “you have no experience”. If you have all three then the next issue is the lack of training.
I could rant for pages of what I’ve discovered in my 2019-2020 job hunting, but it’s not going to change. I used to think the issue was with spoiled kids with a lesser work ethic, and now I can see the problem is HR because Corporate America has either outsourced them, or they’re afraid of being sued.
If anyone remembers the cartoon strip Dilbert, there’s one that comes to mind. The pointy haired boss says to Dilbert and Wally, “We better hurry up and get underneath the bus or we’ll be left behind!”
@A. Nony: One of the best rants I’ve read. Consider: If “people are our most important asset,” why do companies outsource HR, which manages finding, selecting and hiring people? Why is this critical function — this competitive edge — outsourced? I can’t take seriously any company that does that. Might as well outsource the C-suite. Thanks for your compelling comments. I wish you the best — don’t let the realization that HR is largely inept stop you from finding good managers that you can help. That’s who will hire you.