A succinct summation of Stephen Roach's latest commentary on US Job trends from Barron's, that bastion of liberal thinking :)
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MORGAN STANLEY'S CHIEF economist, Stephen Roach, in his latest commentary delves into one of the more contentious and myth-enshrouded parts of the employment scene -- job quality. A manifestly worthy subject, and Steve tackles it with his customary deftness and insight. The thrust of his piece is summed up in his somber observation that "the character and quality of American job creation is changing before our very eyes"-and not for the better.
Over the past four months, he notes, we've created over a million new nonfarm jobs. Even so, over the entire 31 months of recovery, jobs have risen a piddling 0.2% -- far short of the 7.5% average gain of the six previous cycles. And most of those million new jobs have been pretty far down the totem pole.
More specifically, there has been a rush of hiring in what he dubs low-end industries -- restaurants, temporary-employment agencies and building services; significant job additions also were tallied for apparel stores, hotels, food outlets, hospitals, laundries and the like. All told, low-end jobs accounted for 44% of all hires from February through June, double their share of the overall workforce. By contrast, the better-paying contingent-manufacturing, construction and service professionals are examples-chipped in 29% of the fresh hires in that period.
To widen the compass a bit, over the past year, according to Steve, no less than 81% of total job growth was contributed by the sort of low-paying jobs you find in transportation, nonprofessional services, sales and maintenance. What's more, not a few of the new slots are part-time.
Rejecting the conventional wisdom that the problems of job creation, both quantitative and qualitative, reflect productivity gains or the usual cyclical lag, Steve blames them squarely on what he calls "the global labor arbitrage." By which he means the adroit use of information technology that allows U.S. companies to substitute low-wage foreign workers for high-wage domestic workers in services as well as manufacturing.
This pronounced tilt toward low-end new jobs, Steve warns, poses a serious threat to the viability of the recovery and holds political implications, as well. |
