Eight years ago, when John Kerry tried to defeat the incumbent George W. Bush, he accused Bush of leading a “jobless recovery.” When the economy started creating hundreds of thousands of jobs, Kerry and the Democrats then claimed that Bush was creating mostly “McJobs,” low-wage positions rather than higher-paying jobs for people with significant skills. The nominal median income level rose in 2004, though, as jobs were created, and Bush ended up narrowly winning re-election.
Today, the Obama administration keeps claiming to have added 4.3 million jobs by choosing to start from February 2010 rather than the start of the recovery in June 2009 or the passage of Barack Obama’s stimulus package in February 2009. The Obama recovery in full has only added less than 65,000 jobs per month, far below the level needed to keep up with population growth (125K-150K per month), and the civilian population participation rate has fallen to a 30-year low this spring. A new study now shows that even those jobs that have been added are the “McJobs” that Kerry inaccurately accused Bush’s recovery of generating:
While a majority of jobs lost during the downturn were in the middle range of wages, a majority of those added during the recovery have been low paying, according to a new report from the National Employment Law Project. …
The report looked at 366 occupations tracked by the Labor Department and clumped them into three equal groups by wage, with each representing a third of American employment in 2008. The middle third — occupations in fields like construction, manufacturing and information, with median hourly wages of $13.84 to $21.13 — accounted for 60 percent of job losses from the beginning of 2008 to early 2010.
The job market has turned around since then, but those fields have represented only 22 percent of total job growth. Higher-wage occupations — those with a median wage of $21.14 to $54.55 — represented 19 percent of job losses when employment was falling, and 20 percent of job gains when employment began growing again.
Lower-wage occupations, with median hourly wages of $7.69 to $13.83, accounted for 21 percent of job losses during the retraction. Since employment started expanding, they have accounted for 58 percent of all job growth.
The occupations with the fastest growth were retail sales (at a median wage of $10.97 an hour) and food preparation workers ($9.04 an hour). Each category has grown by more than 300,000 workers since June 2009.
First, the job market has not “turned around since then.” We’re not even keeping up with population growth in this recovery. The average jobs added per month since January has been 83,286 according to the BLS (Table A-1 seasonally adjusted), still a long way from keeping up with population growth. That’s not a recovery in jobs at all, which anyone looking at the participation rate (63.7%) would instantly recognize.
The data shows that even the paltry job creation of the Obama recovery has done little to advance the economy. Businesses won’t invest in job-creating activities that require more expensive labor until they can reliably calculate future costs, which in this regulatory and tax environment, they cannot do. That’s why companies are sitting on their capital, and why we won’t get anything but McJobs in significant numbers until those policies change. The only thing we can get with this job-creation environment is fries with our meal.