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Published on Saturday, February 26, 2011 by In These Times

The Recovery That Wasn’t: Bouncing Back to Lower Standards

by Michelle Chen

To understand America's economic "recovery," think about climate change: at first, it may look like your boat is finally rising again. And then you realize that it's only because the deepening ocean is swallowing up the shore and pushing you further out to sea.

That's what the latest analysis from the National Employment Law Project (NELP) tells us about the new jobs that are supposedly lifting workers out of the Great Recession. In fact, we see a pattern of solid jobs evaporating and being replaced by worse ones. So the job growth is offset by overall downward mobility throughout the “recovering” workforce.

According to NELP, recent private-sector economic data shows:

a striking imbalance between where the recession’s job losses occurred, and where the growth of the past 12 months was concentrated. Job losses were skewed toward mid- and especially higher-wage industries, whereas during the past 12 months, job growth was skewed toward mid- and especially lower-wage industries. Specifically:

  • Lower-wage industries constituted 23 percent of job loss, but fully 49 percent of recent growth
  • Mid-wage industries constituted 36 percent of job loss, and 37 percent of recent growth
  • Higher-wage industries constituted 40 percent of job loss, but only 14 percent of recent growth

This looks like a tragic resurrection of the dreaded “jobless recovery,” similar to the one workers experienced in the early 2000s.  But, like a worn-out spring that is ever losing elasticity with each bounce, the post-recession jobs outlook this time around is even bleaker.

First, in terms of the rate of overall job growth:

  • Following the 2001 recession, after a year’s worth of job growth, the private sector had recovered almost half (47 percent) of the jobs it had lost.
  • By contrast, after a year’s worth of job growth, the private sector has to date recovered only 14 percent of the jobs that it lost during the 2008 recession.

Second, as shown below, the early job growth following the 2001 recession was more balanced than the early job growth following the 2008 recession.

  • In the 2001 recession, higher-wage industries constituted almost a third (31 percent) of first year growth.
  • In the 2008 recession, higher-wage industries constituted only 14 percent of first year growth.

So to recap: the economy has failed to bring back a huge portion of the jobs lost, and the jobs that have been generated recently portend a downward shift from higher- to lower-wage industries.

The sectors on the sinking side of this upside-down recovery included those that were artificially bloated by the bubble economy. In the "loser" column, the bulk of employment losses during the last year were in construction (38 percent); real estate, renting and leasing (14 percent); and finance and insurance (10 percent).

Other loss sectors had been declining well before the 2008 economic implosion: non-durable manufacturing, such as printing and chemicals production, and information industries such as telecommunications made up 19 percent and 16 percent of job losses, respectively.

The “gainer” industries, according to NELP, included heavy manufacturing, retail and temp work. But within these sectors wages for different job tiers may vary, so there could be many newly hired workers stuck at the butt end of the pay scale as, say, entry-level sales associates.

So the signs of official "recovery" must be interrogated: Are new jobs stable, livable-wage jobs? Are they concentrated in volatile, crash-prone sectors? Are they commensurate with the skill levels of the unemployed, and if not, are workers being forced to take jobs that don't reflect their full capacity or risk remaining jobless indefinitely?

The slide toward a workforce of lower wages also has global ramifications. President Obama has breathlessly repeated the mantra of making America more "competitive” in the world economy. Critical observers are duly skeptical of the win-win sales pitch. Does boosting “competitiveness”  mean making American workers relatively cheap and disposable compared to their already exploited counterparts in the developing world?

Speaking of which, how might labor migration play into this sinking employment landscape? The Migration Policy Institute explains the folly of basing immigration policy on supposed “shortages” in the labor market:  Governments generally cannot accurately calculate the “need” for immigrant workers due to inaccurate or outdated employment and industry data, along with the inherent messiness of hiring, firing and turnover in the long run. As David Bacon observes, despite efforts by Washington to simultaneously exploit and ignore immigrant workers, it appears that treating immigrants as mere imported labor machines is an economically and morally bankrupt policy.

In the end, statistical measures of economic recovery or decline give us a distorted picture of how well American workers are really faring. What we can divine from NELP's report is that broadly speaking, the tension between job quantity and quality is as painful as it's ever been for the worker who needs not just any job, but a good job, to survive. And a dehumanized global economy in which one worker's competitiveness is another's race to the bottom, in which the flipside of “growth and “productivity” is a more inequitable status quo for families—is guaranteed not to produce a just recovery.

© 2011 In These Times
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