A Quarter Of Jobs In America Pay Below The Federal Poverty Line

Tyler Durden's picture

Over two years ago (and reiterated last year) Zero Hedge first wrote on what was and is an undisputed transition within the US labor force: a shift from full-time to temp, or part-time labor, with virtually no contractual or welfare benefits, and where workers are lucky to get minimum wage. This is because in the "New Normal" where copious amounts of structural slack are pervasive due precisely to the Fed's constant flawed micromanagement of the economy, the US has now become an "employers' market."

Furthermore, we were the first to make the critical distinction that it is absolutely not all about the quantity of jobs, but much more importantly, the quality of the new jobs being created. However, just like 99% of the general public, and all of the mainstream media, has an inborn genetic disorder preventing it from grasping the distinction between nominal and real, so these two critical aspects of the US jobs market languished unperturbed. Until now, two years later, when we are happy to see that the mainstream media has finally caught up with what our readers knew in December 2010.

From the NYT, and long overdue:

Politicians across the political spectrum herald “job creation,” but frightfully few of them talk about what kinds of jobs are being created. Yet this clearly matters: According to the Census Bureau, one-third of adults who live in poverty are working but do not earn enough to support themselves and their families.

 

A quarter of jobs in America pay below the federal poverty line for a family of four ($23,050). Not only are many jobs low-wage, they are also temporary and insecure. Over the last three years, the temp industry added more jobs in the United States than any other, according to the American Staffing Association, the trade group representing temp recruitment agencies, outsourcing specialists and the like.

 

Low-wage, temporary jobs have become so widespread that they threaten to become the norm. But for some reason this isn’t causing a scandal. At least in the business press, we are more likely to hear plaudits for “lean and mean” companies than angst about the changing nature of work for ordinary Americans.

The "some reason" is that absent from the occasional mention here and there, few if any are aware of what is truly going on beneath the surface of America's (part-time) jobs (non) recovery. 

Sadly, while the NYT is accurate up to this point, from here on out they too lose the narrative:

How did we arrive at this state of affairs? Many argue that it was the inevitable result of macroeconomic forces — globalization, deindustrialization and technological change — beyond our political control. Yet employers had (and have) choices. Rather than squeezing workers, they could have invested in workers and boosted product quality, taking what economists call the high road toward more advanced manufacturing and skilled service work. But this hasn’t happened. Instead, American employers have generally taken the low road: lowering wages and cutting benefits, converting permanent employees into part-time and contingent workers, busting unions and subcontracting and outsourcing jobs. They have done so, in part, because of the extraordinary evangelizing of the temp industry, which rose from humble origins to become a global behemoth.

Actually, the primary reason for the surge in part-time jobs over the past 4 years has everything to do with the ongoing Depression, which few are willing to call it for what it is, and, you guessed it, the Fedeal Reserve. Why? We once again refer readers to an article posted nearly a year ago "How The Fed's Visible Hand Is Forcing Corporate Cash Mismanagement" in which we explained that since the advent of ZIRP culture, companies have proceed to i) hoard cash as corporate management is well aware the current artificial economy is a temporary blip on an otherwise inevitable decline back into global economy purgatory and ii) spend what little cash can be disposed off to generate immediate shareholder returns, in the form of stock buybacks, dividends, and when these are impossible, M&A. Alas, the last thing corporations spend capital on is actual organic growth, so desperately needed if they are to be able to afford a viable employee base. Alas, as we showed two days ago, core capital spending has now been declining virtually non stop since posting a modest Y/Y rebound after the Lehman failure.

It is the chart above that shows in no uncertain terms what the corporate vote of confidence in the US economy is. With the consolidated CapEx trendline decidedly lower and to the right, one thing is certain: the part-time normal is here to stay, as more and more people make the minimum part-time wage their daily routine, all the while the BLS, and the administration both lie in broad daylight that the US economy is currently in a recovery.

And while the rest of the NYT piece is mostly fluff, the conclusion is relatively accurate:

The temp industry’s continued growth even in a boom economy was a testament to its success in helping to forge a new cultural consensus about work and workers. Its model of expendable labor became so entrenched, in fact, that it became “common sense,” leaching into nearly every sector of the economy and allowing the newly renamed “staffing industry” to become sought-after experts on employment and work force development. Outsourcing, insourcing, offshoring and many other hallmarks of the global economy (including the use of “adjuncts” in academia, my own corner of the world) owe no small debt to the ideas developed by the temp industry in the last half-century.

 

A growing number of people call for bringing outsourced jobs back to America. But if they return as shoddy, poverty-wage jobs — jobs designed for “Never-Never Girls” rather than valued employees — we won’t be better off for having them. If we want good jobs rather than just any jobs, we need to figure out how to preserve what is useful and innovative about temporary employment while jettisoning the anti-worker ideology that has come to accompany it.

And that means differentiating the US work force and making it highly specialized, and attuned to a new world in which increasingly more unskilled labor is being outsourced or outright replaced by conveyer automation and robotics. Alas, that means providing incentives for people to get off the couch, learn a skill, and specialize. And that, courtesy of that other central planning tenet, namely providing each and everyone with just the barely sustainable minimum of welfare entitlement to keep people satisfied and voting for the same person over and over, guarantees that more will fall into the trap of having no marketable skills, and be without even part-time opportunities.

At least, until the welfare funding runs out. Then things get really ugly.

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hedgeless_horseman's picture

 

 

Build the Death Star.  It is our only hope.

Tsar Pointless's picture

Then, build a bigger and badder Deathier Star to destroy the Death Star. Then build a bigger and badder Deathiest Star to...

It is our only hope.

Silver Bully's picture

'It is our only hope.'

To infinity, AND BEYOND!

Carl Spackler's picture

Lower the poverty line.

Our poor would be considered rich in most of India and China and Africa and South America, as well as many other places.

dwdollar's picture

Now you're thinking like a DC spinster.

Bunga Bunga's picture

Not a big deal. Wages will magically rise above Federal poverty line. Inflation will take care of. CPI is just an artificial number.

mmanvil74's picture

Another big part of the overall employment picture that is ignored in this article is the low quality of education in the US.  There are all kinds of studies that show how kids in other countries (mainly in Asia) far outperform American kids on math and science exams.   Not only are grades 1-12 in the US a complete joke, in which literacy alone gets you a passing grade, but the majority of all college educations are utterly useless.

In addition to a massive debt burden, most college students graduate with few if any employable skills.  The idea that a traditional college degree is the way ahead should be largely abandoned.  Either get a job with a company who is willing to train you for what they need, or go to a highly specialized tech school that teaches valid skill sets.  

Heck, you'd be better off paying a company to train you for a role they might need than you are paying to go to college.  If I was CEO of a large company in the US, I would offer high school grads an opportunity to pay for training in the areas jobs are being created, and if they perform well during training, hire them on full time with benefits.  If we don't hire you after your training, we'll give you a reference letter and at least you can go out and look for a job with some real training under your belt.

The FED of course plays a role by providing easy money financing for college, but it is still the parents/kids fault for falling into the trap, in the same way it was the borrowers fault for buying more homes than they could afford prior to the housing bust.  Unfortunately, college is so deeply ingrained in American culture, along with TV and McDonald's, it is somewhat pointless to debate the issue.

Bananamerican's picture

a shift from full-time to temp, or part-time labor, with virtually no contractual or welfare benefits, and where workers are lucky to get minimum wage

 

Quick! Import more 3rd world peasants! (i mean, '"Immigrants")

Pure Evil's picture

Somebodies got to do the jobs welfare dependent Americans won't do.

trav777's picture

look at all those people in that line for handouts.

Orderly.  Well-dressed.  Well-behaved.  Polite.  Manners.

Now go onto youtube and take a look at lines for Section 8 vouchers (even when it's just a rumor that there were gonna be some).  And by lines I mean "black mobs dressed like fucking cretins and behaving like apes."

Those old pictures should be thrown away, torn up, rightfully consigned to the dustbin.  Because they are from Old America, which was racist.  That entire society and way of being was illegitimate because of racism.  Those people had separate drinking fountains therefore we should reject everything about them.

Angus McHugepenis's picture

Trav - Tyler must have reinstated your former status. Your current profile shows you as a member for 3 years, 10 weeks. How does that happen when you had to create a new profile after you disappeared for several months and knocked a 7 off your name? Your profile should show you as being a few weeks old... a newbie. Care to explain?

ronaldawg's picture

Or he made more than one account three years ago.

Leave him alone - he is on a roll.  I want to see him twist like a pretzel to clarify calling people "apes" in one sentence and then saying the country is "raaaaacist" in the next.

FORWARD!!!!

Angus McHugepenis's picture

Yeah, I was just curious. I never expected a reply. And yeah, Trav is on a roll. Release the hounds!

Lost My Shorts's picture

It is funny hearing talk about polite and manners from someone whose avatar is giving the finger.

Trav has apparently never heard of (reliable conservative) Charles Murray's book "Coming Apart: The State of White America, 1960-2010".  Trav is totally convinced that the ugliness of the black underclass is due to their blackness, not their underclass-ness.  But Murray's tale of the white underclass suggests an alternate theory.  Something about the American combination of individualist culture (increasing detachment from family, church, and community) combined with the disappearance of middle class jobs leads to a lot of ugliness in every color scheme.  At the time Murray's book came out, I saw a fascinating article about white welfare-dependent meth-heads in West Virginia who weren't too pretty either; I wish I could remember the link.  Just like blacks used to have a respectable middle class in places like DC and Harlem; whites in WV used to be salt of the earth working people who would no sooner take drugs and welfare than eat poison.

But Trav's mind is open as a brick.  It's all about black.  They're black.  Get rid of the blacks, and happy days are here again.

Muppet Pimp's picture

Krugman told me if we would distribute more colored pieces of paper, there is no need to fix anything, ever.  He said proof of this is in plainview with the TBTF bank bailouts.  He said that if we were to have practiced real economics that these banks would have failed.  But they did not fail.  Therefore it is only intuitive that the solution is to print moar, and obviously there will be no more failure again, ever.  We have solved the riddle, the men with guns and printing press have negated the need for intelligence an hard work.  This is MIT level knowledge right here.  Consider yourselves lucky that you did not have to pay for this, some spend six figures to gain this knowledge.

akak's picture

 

Lower the poverty line.

Our poor would be considered rich in most of India and China and Africa and South America, as well as many other places.

The only problem with that is that our poor do not LIVE in India or China or Africa, but here in the USA/Canada/Europe, with a much higher cost of living, even if one were to live, or even COULD live, the exact same lifestyle as the poor in those places.

ptolemy_newit's picture

not sure about India but here in China the cost of living is high!  a 140 meter home is 200,000 $  food is the same as anywhere (kfc, mcdonalds).

average engineers salary is 1000 $ per month!

You can place 100% of the blame on the UAW, reallly where can you get paid 80,000 a year for mondane routine manual labour with better retirement and beneffits than a tradesman.

The west lost its manufacturing from the pure greed of the unions.  Hussien wants to get the manufacturing back but 10 years of debasement and labor afjustments are required.

 

 


 

Landrew's picture

Where do we start? I guess the perfect comment to your ill informed thought. You are a clueless fuck that repeats the Cock brother lies about 80k a year unskilled labor! A tradesman, electrician, toolmaker, plumber working at GM with some modest overtime did make those dollars. Unskilled not even close! You are a clueless fuck!

defender's picture

Just because a person has worked for the same company for 5 years, does not make them a tradesman or skilled labor.  Why don't you look into how much the UAW requires the auto plants to pay people not to work.  That's right, paying people not to work.

mumbo_jumbo's picture

thank you landrew, when someone starts spewing that $80K unskilled auto worker bullshit they out themselves as a clueless sheeple...

MillionDollarBoner_'s picture

Hey guys - why bicker when the facts are just a click away?

http://www.autoblog.com/2011/09/20/details-of-uaw-gm-deal-reveal-minimum-wage-raise-6-4k-jobs-crea/

Golden hello, piss easy work, early retirement with golden parachute.

Think I'll sign up meself, heh :O)

willwork4food's picture

Touche Akak. It always bugs me when people say this person made $10/day in Narniastan. Doesn't mean a hill of bean if you don't know how much it costs to live THERE.

Angus McHugepenis's picture

And why don't the cops in these poor countries fine their "citizens" for vagrancy, loitering, jaywalking, speeding, or various other "legal" violations of ACTS, STATUTES, & BYLAWS? Simple... they can't collect.

Here's a simple remedy. NEVER own anything in your name (example, Queen of England). Nothing is in HER name nor any of their families. You ZH'ers should all know that a corporation is a "person", right?

trav777's picture

those people in those countries aren't saddled with the costs of an artificial black middle class or a police state or a DoD that gobbles up a trillion a year.  This shit ain't cheap.

Everybodys All American's picture

Don't worry the government bureaucrats have already been doing that by passing on inflation to you and telling you there is very little of it in their CPI and PPI reporting.

bunnyswanson's picture

This does not make slicing the "pie" inequally right.  How many millions of dollars does it take for one person to feel like a success?  They once counted on customers for their business.  Customers tend to be the employees.  For the people to be consumers, the need a decent income.  Investing, trading/selling stocks/shares seems to be the path to a profit lately.  Prices are going up, especially food.  Local taxes have all been risen and every year, they go up.

http://www.investopedia.com/financial-edge/0111/7-countries-raising-the-minimum-wage.aspx#axzz2JVV9sdAf

December 28, 2010 12:47 pm

Beijing city to raise minimum wage 21%

Beijing city is to raise its minimum wage 21 per cent next year, the second such rise in barely six months, amid rising inflationary pressure and growing concern over China’s widening wealth gap.

The increase, which will come into effect on New Year's day, raises the statutory minimum monthly wage in the Chinese capital to Rmb1,160 ($175) and the hourly rate to Rmb6.7. It follows a 20 per cent rise in June.

 

http://www.ft.com/cms/s/0/30f7f9e0-1277-11e0-b4c8-00144feabdc0.html#axzz2JVUvWp5Y

Despite the brutal global recession that has gripped the world economy over the last few years, many countries have moved to increase the statutorily mandated minimum wage for workers. The countries raising the minimum wage cut across geographies and economic systems to include China, Brazil, Spain, Bolivia, Turkey and seven individual states in the United States. These increases range from 1% to as high as 21%. (For more, see The Minimum Wage: Does It Matter?)

Read more: http://www.investopedia.com/financial-edge/0111/7-countries-raising-the-minimum-wage.aspx#ixzz2JVVmv1h5

boogerbently's picture

Shouldn't the "poverty line" be well below what a minimum wage job pays ?

knowless's picture

well, inflation. but yeah.

Angus McHugepenis's picture

I think you just defined slavery in modern terms.

zerozulu's picture

So this means "Green card" to all illegals, doing DDD (dirty, dangerous and difficult ) jobs cannot stop them going back.

azzhatter's picture

Wait til all the illegals start having taxes taken out of their check after all these years of cash. Wait til they have to join obamacare. This will be interesting, stampede to the border to exit

iDealMeat's picture

I bet many employers already take out State and Fed tx...    And pocket it...

 

What's the illegal going to do about it? 

 

 

WillyGroper's picture

Whatdya think the immigration reform is about? No more skilled construction workers for the big boom. 

zerozulu's picture

Let the dollar crash, minimum pay will rise to US$ 150,000

SafelyGraze's picture

"Then, build a bigger and badder Deathier Star to destroy the Death Star"

absolutely!

the solution is as simple as it is obvious

EmmittFitzhume's picture

Ahh the olde "Broken Death Stars" theory!!

Sudden Debt's picture

Why would you want to build a quadrillion type project that one guy in a orange jumpsuit, who has father issues and who talks to a little green guy who calls himself "master", can destroy in 15 minutes by dropping a little bomb into a shaft that no engineer thought of securing against crap like that and that can destroy the entire star?!

sure!!! It was a good analogy to "MADE IN AMERIKA" but THAT'S IT!!!
IT WAS A WARNING!!!

THE MOVIE WAS A WARNING ABOUT A BIG BLACK LEADER WHO HIDES HIS TRUE FACE AND WHO USES THE POWER OF INFLUENCE TO ENSLAVE MANKIND!!

kookook! :)

ebworthen's picture

Yes, but then Palpatine could go back to the Imperial Senate and ask for more money from the systems to build ANOTHER Death Star!

Do your part everyone - break some windows!

Sudden Debt's picture

But who would man the second star?!? DO YOU HAVE ANY IDEA HOW LONG IT TOOK TO CLONE THE FIRST BACH OF STORMTROOPERS?!?

Nop... a deathstar isn't the sollution... We need battlestar galectica's so we can go to the first colony once the centurions take over the planet...

dwdollar's picture

Why choose!?! Let's build every battle fleet in every scifii television series, movie, and book!!! Infinite jobs for everyone!

Sudden Debt's picture

Starwars
Star trek
Buck Rogers
Battlestar Galectica
Babylon 5

AND MOONBASE! We also need a moonbase!

Damn! We're really getting somewhere here! It's like this plan is all planned out!

I just wonder how many days the fed would need to print to fund it all...

Groundhog Day's picture

it takes about 10 seconds to enter that many zeros and check it for accuracy

Jumbotron's picture

Starwars Star trek Buck Rogers Battlestar Galectica Babylon 5 AND MOONBASE! We also need a moonbase! Damn! We're really getting somewhere here! It's like this plan is all planned out! I just wonder how many days the fed would need to print to fund it all...

 

THAT'S RIGHT !!!  MOONBASE ALPHA FROM SPACE 1999 !!

 

That's even better because as in the TV series after we blast the moon to the outer regions of the universe from a massive nuclear waste dump explosion ( now even 20% BETTER with a Fukushima infusion) we can go about with asteroid mining ready jobs in order to rebuild a new and improved Moon !!!

GDP to the Moon, Alice.....TO THE MOON !!!!!!

A Nanny Moose's picture

We also need a moonbase!

That would be Space 1999 with Martin Landau.

Sokhmate's picture

I'll command the Firefly. The on-board companion alone is worth it, and I'd be free from the Federation.

johnconnor's picture

No man, Palpatine disolved the Senate.. not a bad idea to disolve the Senate and the House if you ask me, a few less parisites and lobbiest sucking off the system