Before break out the bubbly and belt out ‘Happy Days Are Here Again’ in response to the recent drop in the national unemployment rate, it is important to keep this happy news in perspective. Indeed, the fact that any jobs have been created in lieu of the blood-letting the nation has endured is a good thing. However, subsistence level jobs will not an economic recovery make.
The desperate economic times that befell the U.S. in 2008 have whetted an appetite for any kind of good news indicating the economy---and our way of life---is turning around and showing signs of returning to normal. The fact of the matter is, it is likely that the 200,000 jobs that were created in the month of December were weighted heavily to part-time and seasonal retail positions.
So when the government trumpets that unemployment has fallen to 8.5%, this figure needs to be put in perspective. The Bureau of Labor Statistics (BLS) reported that while employment in transportation and warehousing increased by 50,000 jobs in December, 42,000 of those jobs were courier and messenger positions.
Surely a nice bump in employment, but how much can couriers and messengers make that will be put back into the economy in the way of spending? Many such positions are minimum wage or above positions with little or no benefits.
For a true economic recovery to take hold in an economy that depends on consumers to feed the beast, jobs must be available that offer decent salary, benefits, and hope for advancement. Not subsistence-level or part-time seasonal.
As expected, the retail trade added strong numbers of employees in December as well. The BLS reported that 28,000 jobs were added in December and over 240,000 for the year. Here again, the retail jobs created in anticipation of the holiday season are generally temporary part-time positions that pay a meager hourly rate and offer little to no benefits. These positions also notoriously disappear by the end of January.
Need proof that the retail increase in employment is a phantom influence on the positive jobs numbers? Twenty-six thousand of the twenty-eight thousand positions created in December were in clothing and merchandise stores.
In Florida for example, newly-elected Governor Rick Scott touts that the state’s unemployment rate has dropped by two full percentage points, to 10% in the month of November. The Florida Department of Economic Opportunity reported that “Florida continues to see positive jobs growth, with more than 120,000 net jobs gained since January and 134,000 private sector jobs added”.
Just like the national numbers, Florida’s improvement is not what it appears to be on first blush. Emily Eisenhauer of the Research Institute on Social and Economic Policy (RISEP) at Florida International University explains that when you take into account that 28.6% of the employment added in Florida for 2011 was in Leisure and Hospitality.
For Florida, “You get that nearly 60% of the jobs created in Florida over the past year are in low wage industries with few benefits”, she said.
So it appears to go for the nation. The bottom line is while it’s nice that retailers and service sector employees are hiring, it doesn’t change the fact that jobs for the sake of jobs to justify an economic recovery is taking place is not what the country needs to pull out of the recession.
A consumer-driven society cannot survive, nor can it’s people, on subsistence-level employment that offers little hope for advancement and a skin-and-bones chance at benefits, if they offer them at all.
Going forward the Obama administration and Congress should continue to exert pressure on the private sector and corporate giants to invest robustly in the economy by hiring employees at wage levels that justify the claim that we are in a Recovery We Can Believe In.
Read more articles by Miami Unemployment Examiner Glenn Osrin here.
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