Over the past few months, I’ve heard two radio commercials that are very interesting. Both are targeting employers and offering web-based solutions for recruiting new employees. The two companies sponsoring these ads are Zip Recruiter and Pro Jobs Network. The fact that these companies exist and are advertising shows that the job market is tight for small and mid-sized businesses. Employers need to have another company recruit and screen candidates. It’s easy to focus on negative news like major corporations laying off thousands of employees. At the same time, we need to remember that most Americans work for small and mid-sized companies. As long as online recruiting companies are advertising, it’s safe to assume that they are hiring. That’s good news for the economy and American workers.
P.S. Zip Recruiter offers functions that job seekers can use to search for jobs. Pro Jobs Network is only for employers.
USA Today’s Susan Page recently interviewed Secretary of Labor Thomas Perez. She asked Perez about a paradox in the current economic recovery: unemployment is down with little increase in wages. Perez said that there is still “slack” in the market, which would mean that unemployment would have to go even lower to drive increased wages. He also discussed a White House Summit on Workers, which will take place on October 7, 2015. This sounds like good news, but what results will it bring? Perez captured the general mood of American workers this way: “They’re hard and falling behind.” Page cast this as a “disparity between the wealthy and the middle of the workforce.” I would respectfully disagree. From the Occupy protests to the ongoing Fight for 15, low wage working people are voicing their frustration and demanding justice in a way that the middle class is not. That said, most American (I’d guess 70-80%) are feeling anxiety and a lack of security. President Obama put it best when he said, “America needs a raise.”
Bloomberg reports what seems to be good news. John Williams, president of the Federal Reserve's San Francisco bank, says that the job market is doing so well that the central bank might need to raise interest rates. The article cites lower unemployment rates as the reason for the Williams' statement. Unemployment has declined greatly from its peak during the Great Recession. Even so, many Americans who are counted as employed are only working part-time. Many more are working full-time, but doing so at a low wage. Even workers who make middle class incomes are struggling because they have only received minimal raises over the past 5-8 years.
It’s great to be optimistic, and the Fed should be concerned with inflation. However, most Americans do not feel secure in their jobs and incomes. According to the Consumer Confidence Index of the Conference Board, Americans are not enthusiastic about the current economy. Almost as many people (11.1%) expect their incomes to decline as the small number (17.4). These metrics also show that most American are treading water, not what should be expected in an expanding economy. Politicians and the Fed need to address that concern and not simply focus on the unemployment rate. There will only be a real recovery when Americans feel financially secure.
The job numbers from last month are exciting. The unemployment rate is down to 5.5%, which is good in itself. However, there is even better news. Bloomberg reports that leading retailers are struggling to keep their lowest paid employees. It will take a while for employers to move the needle up on salary, but this is a good start. Bloomberg depicts the current situation as a conflict of interests between investors and employees. I disagree. As lower paid workers make more money, they will spend, which means everybody wins. The article also demonstrates how much it costs a company to replace employees. The raises leading retail companies have given to their employees can be seen as a way to save costs related to turnover. The news is good. Let’s be happy for a little while.
While this month’s employment report again showed more jobs being created and a falling unemployment rate, wages dropped. According to past trends, wages should go up as labor becomes scarcer and companies want to retain productive employees. Former Labor Secretary Robert Reich analyzes this situation in a recent blog post. Reich points to factors that can hold wages down even as unemployment shrinks. Two main culprits are the global economy and automation. Companies can offshore cheaper labor, and they can find new ways to let technology replace humans. Reich scoffs at those who call these factors “efficiency.” Reich concludes by blaming both large corporations and Wall Street for holding down wages. I’d agree with him and add one more culprit: spineless politicians who serve Wall Street and large corporations. Nothing will change until our politicians and laws provide some protection for American workers. Or, to put it another way, nothing will change until American voters elected politicians who represent the interests of working people.
Conservatives and Neoliberals often blame unemployment on the skills gap, the claim that jobs are open because workers are not able to fill them. Paul Krugman takes this claim apart by pointing to the most deadly thing of all – facts. Using economic data and a tool called the Beveridge Curve, Krugman shows that the rate of unemployed based on skills is its usual rate. Rather than blaming workers for not being skilled, shouldn’t we be debating better ways to train workers and educate students? Shouldn’t we be talking about how to invest in the future?
Huffingtion Post (via 24/7 Wall Street) examines a serious problem facing working people: occupations that will no longer exist. As technology and processes improve, companies have been able to do away with people who perform tasks that can be automated.
The article cites the U.S. Postal Service as one example of a company that has been impacted by new systems. As more people use email and online systems for paying bills, there is less and less need for postal carriers and workers to process the mail. While this example is good, it does not address even more frightening scenarios for the job market.
What if businesses no longer needed to hire people to drive or wait tables? In the past few months, I’ve read articles that suggest that both of these occupations could go the way of the unicorn. Rather than have a waiter present the daily special and take orders, diners would make their choices on a tablet, and expeditors would bring the food/clear the tables. I don’t know if this system is practical given the waiter’s role in sales and customer service, but the system is plausible, especially for restaurants where service is less of an issue than price. I’ve also read articles that claim driving jobs will be gone by 2050 due to computerized vehicles. Imagine if all the people who held jobs as drivers and waiters were suddenly unemployed. I frequently criticize companies for paying low wages, but that is preferable to having an economy where machines do all the work.
What can we do? I don’t know. We can fight moving jobs to other countries through legal actions like tariffs and by economic nationalism (Made in the U.S.A.). I don’t know how you fight technology and progress. If a company can improve its business through innovation, it will do so. If it doesn’t, a competitor will do so. The problem of lost jobs (occupation extinction) is serious, and – like climate change – too many people are ignoring it.
Common Dreams reports that much of the good news about job growth hides more troubling economic news. The article cites research by the National Economic Law Project that shows most workers have lost ground on wages. It also quotes economist Robert Kuttner, who notes that more new hires face part-time work schedules, including on-call jobs that give no set hours. We want more jobs. But they need to be good jobs, not work schedules that let employers make more money by making workers more insecure. America needs a raise and better working conditions.
Aljazeera America’s Inside Story Team analyzed the recent “good news” about job growth in the U.S. The numbers are positive, but there are still big problems. Many of the new jobs are in low wage sectors, such as service and retail. Is Aljazeera just being a buzz kill, looking for bad news? Not at all. Job growth over the past few years has been highest for lower wage workers. Just as bad, many middle class Americans have seen low or no raises from year to year. I’ve had several clients whose bosses have told them some version of “be happy you have a job.” Until wages go up for the lower and middle class, the American economy will struggle. Worse still, millions of working Americans will live with a constant dread of insecurity and a feeling that they are never getting ahead. The news about unemployment is good, but for many it does not address the real problem: America needs a raise.
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