The new DOL numbers
Yikes. The new BLS numbers report only *1,000* new jobs added last month. At the same time the unemployment rate fell two tenths, to 5.7 percent. What's going on here? As discussed here before, the discrepancies in reporting between the Bureau of Labor Statistics payroll survey, which produces the number of actual jobs added, and the household survey, which informs the official unemployment rate can be very revealing in determining the real nature of jobs created during a recovery. The payroll survey looks directly at establishments' payroll records, while the household survey asks a sample of households about employment: The flaw of the payroll survey is that it will count an individual with two jobs as two separate official 'jobs.' Likewise, if the two-job individual loses one job, that is counted as a lost job, even though that specific individual is still employed. It is also slow to pick up on new business creation (although defenders say it is getting better, and a similar lag in eliminating dead businesses from the survey somewhat accounts for any new businesses missed).
The flaw of the household survey, on the other hand, is that it reports jobs based on the responses of individuals. Thus, if someone does 5 hours of undocumented work and reports it, that is counted as a job. In a recovery, the household survey numbers increase more quickly because businesses will be cautious about investing in new full time workers, but will take on temporary and undocumented workers as they grow capacity.
Ultimately however, continuing divergence between the surveys serves as a crude indicator of the quality of new jobs being created in a recovery. And we are starting to see confirmation that the new jobs created in this recovery, what few there are, are well below the jobs they are 'replacing' in wages and benefits. CAP cites this study from the U.S. Conference of Mayors showing new jobs created during the 2004-05 period are forecast to pay an average of $35,855, much lower than the $43,629 average pay of jobs lost between 2001-03.
We will get the jobs back eventually. Even though the Bush administration has done everything in its power to make the recovery reward business first, new investement is only trending upward, and we will continue to see healthy positive growth. The jobs will come, if only at a trickle. But the real lasting impression of this recession may be that it quickened the American labor market's descent into a jungle of low-wages, few protections, and no security. For all the problematic aspects of growth under the Clinton years, they did represent income gains for low- and moderate-income workers, a shaky foundation surely, but something to expand on and solidify. This recession may be the nail in that coffin, proof that the late 90s were truly an anomaly, a momentary diversion on the long downward spiral for American workers.
The flaw of the household survey, on the other hand, is that it reports jobs based on the responses of individuals. Thus, if someone does 5 hours of undocumented work and reports it, that is counted as a job. In a recovery, the household survey numbers increase more quickly because businesses will be cautious about investing in new full time workers, but will take on temporary and undocumented workers as they grow capacity.
Ultimately however, continuing divergence between the surveys serves as a crude indicator of the quality of new jobs being created in a recovery. And we are starting to see confirmation that the new jobs created in this recovery, what few there are, are well below the jobs they are 'replacing' in wages and benefits. CAP cites this study from the U.S. Conference of Mayors showing new jobs created during the 2004-05 period are forecast to pay an average of $35,855, much lower than the $43,629 average pay of jobs lost between 2001-03.
We will get the jobs back eventually. Even though the Bush administration has done everything in its power to make the recovery reward business first, new investement is only trending upward, and we will continue to see healthy positive growth. The jobs will come, if only at a trickle. But the real lasting impression of this recession may be that it quickened the American labor market's descent into a jungle of low-wages, few protections, and no security. For all the problematic aspects of growth under the Clinton years, they did represent income gains for low- and moderate-income workers, a shaky foundation surely, but something to expand on and solidify. This recession may be the nail in that coffin, proof that the late 90s were truly an anomaly, a momentary diversion on the long downward spiral for American workers.
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