A long time ago, in a business cycle far, far away there was a great recession. Before this recession, jobs were plentiful, high-paying, and secure. The recession officially ended in June 2009, and, according to economists, I included, the economy has been in recovery for the last 60 months – one of the longest periods of recovery in the post-war period. The stock market has soared to new heights and while energy prices still remain high, they haven’t spiked too much in recent years. In fact, the US is now a leading producer of hydrocarbons. The US has also enjoyed one of the lowest interest rate environments in its history. As a result, the housing market has picked up and consumers are spending again. In spite of all of the signs of an economic recovery, it still does not feel like an economic recovery. There is a disturbance in the force.
The Number of Jobs Created & the Challenge of the Long-Term Unemployed
A couple of factors are driving that disturbance. While nationally, the number of jobs being created every month has been impressive, they have fallen short of the need to fill those jobs that were lost as well as those jobs that should have been created. The difference is noticeable, and I had to ask, “aren’t you a little short for a recovery?” Moreover, the challenge of the long-term unemployed continues to cast a shadow over the recovery and we often mutter a prayer that we are not one of them. While these two factors contribute to the feeling of recovery malaise, there are two other often over looked factors that also contribute to that disturbance—part time jobs and the wages of the post recessionary jobs.
Part Time Jobs
The percentage of jobs classified as part-time has risen quite dramatically as the economic recovery has evolved. Nationally, the part-time job percentage has gone from less than 16% to over 19%. This could be a result of the types of new jobs being created. In fact, nearly 40% of the new jobs created in the post-recession period were in retail, food service, and temp jobs, which tends to have more part-time jobs than say the manufacturing sector. It seems the recovery is trying to pull a Jedi mind trick on us, but these are, in fact, not the jobs we’re looking for.
Wages of Post-Recessionary Jobs
The second factor is the quality of jobs being created and by quality I am implying wages. The National Employment Law Project recently published findings supporting our analysis. While the economy has created jobs, the median wages of the jobs created fall dramatically short of the median wages of the jobs lost. In the US, fewer mid and high wage jobs were created than were lost, but more low wage jobs were created during the recovery. Sadly, this same phenomenon is repeated here in Maryland as illustrated by the infographic below.
The challenge before us is to ensure that we as a nation or as a state do not end up with a labor force comprised of part-time workers earning low wages. Are you worried? We find your lack of faith disturbing.