There isn’t much cause for gloating in today’s unemployment report, with the number of jobs created during December—103,000—being lower than most analysts expected. But, more critically, we’re not even treading water on creating a sufficient number of “breadwinning jobs” needed to grow and sustain America’s middle class.
Conservatives shouldn’t be quick to pounce on this morning’s report, either, because the policy prescriptions they are putting forth offer nothing to help the middle class get back on its feet.
That “breadwinning jobs” term was used last month by none other than David Stockman, President Reagan’s first budget director. Lately he’s become a sharp critic of his conservative brethren who he believes are wrong-headed in continuing tax breaks for the wealthy while feigning alarm over the budget deficit. He’s also rapping them for the vacuity of their economic growth ideas. In an interview with CNBC, he said that the real employment story to watch is what’s happening with the jobs that pay an annual median wage of $50,000, enough to support the average middle-class family (h/t gjohnsit at DailyKos).
If you take core government plus the middle class economy (65 million jobs), that’s the breadwinning economy, if we take some numbers—how many jobs in the “core economy” in November—zero; how many jobs since last December: net zero; how many jobs since the bottom of the recession in June 2009: still a million behind from when the recession ended.
In December, according to the Bureau of Labor Statistics, most of the new jobs were in leisure and hospitality (47,000) and education and health services (44,000). Retail trade created 12,000 jobs. There were 16,000 fewer construction jobs, and only 10,000 new manufacturing jobs.
The unemployment rate drop to 9.4 percent was influenced in part by a decline in the number of people in the labor force. Also, since December 2009, there has been a net increase of 389,000 in the number of discouraged workers, the people who are too pessimistic about their ability to get a job to even try.
Over at The Atlantic, Eve Tahmincioglu says this is the result of a conservative “political and economic assault on the middle class.” The recent announcement that Dollar General will create 6,000 retail jobs that will pay between $20,000 and $30,000 a year, in her view, is not particularly good news but is more an ominous “sign of the times.”
Low-wage jobs, including everything from retail sales associates to home health aides, are the bread and butter of our employment boom, while middle income jobs are on the decline.
Among the top ten occupations projected to have the largest numerical growth in the next decade, seven pay median wages under $30,000 a year, including food preparers and servers earning $16,000, and retail and home care workers who make $20,000. Home aides and retail workers are expected to add about 1.4 million positions this decade while middle-class manufacturing jobs are projected to lose more than a million jobs.
This is not the kind of job swap you want to see in a world-leading economy. Peter Creticos, president and executive director for the Institute for Work and the Economy, calls it the “down waging” of American jobs, and he fears it has and will continue to hurt the economy, blunt innovation and impoverish society at large.
Between January 2007 and November 2010, we’ve lost 2.2 million manufacturing jobs and 1.7 million construction jobs, and we’ve replaced them with 1.8 million education and health services jobs, and fewer than a half-million leisure and hospitality jobs. The manufacturing and construction jobs that were lost would today have paid an average annual salary of $48,200; the average salaries for education, health care and hospitality jobs range between $23,000 and $41,000.
“We are now America, the downwardly mobile,” wrote Harold Meyerson this week when he offered his own analysis of what has happened in the job market in recent years. The shortage of breadwinner jobs exacerbates the middle-class economic decay that began with the economic policies of the Bush administration and the conservatives in Congress. As Meyerson points out, median household income (in 2007 dollars) went from $50,557 in 2000 to $50,233 in 2007 and $49,777 in 2009.
“A rational political system would long since have created a 21st-century version of the Works Progress Administration — we’d be putting the unemployed to work doing what needs to be done, repairing and improving our fraying infrastructure,” Paul Krugman wrote this week. Indeed, members of the House Progressive Caucus had tried to get Congress to pass a modest version of such a program called the Local Jobs for America Act. If Congress had put that legislation on President Obama’s desk, along with what is now a past-due program to fund repairs and expansion of the nation’s highways and public transit systems, we would today see the beginnings of real progress in getting unemployed people into the kinds of jobs that will enable them to support families and contribute to the economy’s revival.
As it stands, we have conservative leaders who are bent on ending any stimulus spending, and cutting back on investments in infrastructure and transit. At the same time, while House Democrats last fall began promoting a “Make It In America” agenda to encourage the growth of manufacturing, House Republicans are instead asking industry what favors they would like the government to do for them. Or they are blaming, as House Majority Leader Eric Cantor did today, “the massive government takeover of health care that was rammed through Congress despite strong public opposition.” (Government takeover? Rammed through Congress? Strong public opposition? How many lies can the House Republican leadership cram into one sentence? Not to mention that conservatives have yet to produce one shred of evidence that health-care reform has inhibited job growth.)
With that mind-set, conservatives have no answer to what Meyerson calls the “institutional” factors that are keeping breadwinners from getting breadwinner jobs, “the decisions by leading banks and corporations to stop investing in the job-creating enterprises that were the key to broadly shared prosperity.”
A study by the Business Roundtable and the U.S. Council Foundation found that the share of the profits of U.S.-based multinationals that came from their foreign affiliates had increased from 17 percent in 1977 and 27 percent in 1994 to 48.6 percent in 2006. As the companies’ revenue from abroad has increased, their dependence on American consumers has diminished. The equilibrium among production, wages and purchasing power – the equilibrium that Henry Ford famously recognized when he upped his workers’ pay to an unheard-of $5 a day in 1913 so they could afford to buy the cars they made, the equilibrium that became the model for 20th-century American capitalism – has been shattered. Making and selling their goods abroad, U.S. multinationals can slash their workforces and reduce their wages at home while retaining their revenue and increasing their profits. And that’s exactly what they’ve done.
Deregulation, tax breaks and bad trade deals helped set the stage for this state of affairs. The conservative agenda in 2011 is more deregulation, more tax breaks and more bad trade deals. The answer is the kind of jobs and economic growth agenda that President Obama laid out at the beginning of the year and Robert Borosage has praised:
President Obama got it right:
We are…riding a few months of economic news that suggests our recovery is gaining traction. And our most important task now is to keep that recovery going. As President, that’s my commitment to you: to do everything I can to make sure our economy is growing, creating jobs, and strengthening our middle class. That’s my resolution for the coming year.
And he added, a short-term boost isn’t sufficient, we’ve got to:
“… make some serious decisions about how to keep our economy strong, growing, and competitive in the long run. We have to look ahead – not just to this year, but to the next 10 years, and the next 20 years. Where will new innovations come from? How will we attract the companies of tomorrow to set up shop and create jobs in our communities? What will it take to get those jobs? What will it take to out-compete other countries around the world? What will it take to see the American Dream come true for our children and grandchildren?”
The headline of today’s job report, and in fact the headline for each of the jobs reports that the Bureau of Labor Statistics will be issuing this year, is not in the number of jobs created but in whether we are moving closer to building an economy that strengthens the middle class. We need to keep asking House Speaker John Boehner not just “Where are the jobs?”—to which the answer would be, “At the Dollar General”—but “where are the breadwinning jobs that will support our families and bring about a real Main Street recovery?”