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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Angus McHugepenis's picture

You have a much more twisted imagination than I do. And you look like a running, screaming, cartoon potato.

Fucking brilliant the correlation you just made to Darth Vader and Barecrack Openbagma. Now I'm wondering if George Lucas is the sire of Barecrack.

Edit: I am LOL'ing by the way.

trav777's picture

dude, the Challenger blew up because fucking rubber O rings couldn't take the fucking COLD.

Odd failure modes are a HALLMARK of complex systems.

Angus McHugepenis's picture

"Odd failure modes are a HALLMARK of complex systems".

That's the technical way of saying; "We're winging it, and we won't know if it's safe until it blows up". Hey, I'm a fucking MIT Engineer bitchez! Trust Me!

giddy's picture

...ummm...just as James Burnham describes in The Managerial Revolution...

Sudden Debt's picture

Thx, just found a few pdf's to read this weekend :)

Deacon Frost's picture

The Death Star is almost completed.

Fiat money creation without limit

Expansive government regulations



The ‘cost structure’ for businesses in the US makes no sense.

That is, the expenses that a firm must take into account when manufacturing a product or providing a service. Types of cost structures include transaction costs, marginal costs and fixed costs. Combining fixed costs with variable costs make up the total cost of production.

And in the end, it comes down to the ROI.

daxtonbrown's picture

The solution to too many part time minimum wage jobs is to simply outlaw them.

Like Duh Tylers, Zerohedge is always making things so difficult.

And break some windows too, that's another one of those Duh moments.

ZeroAvatar's picture

Did you spend your requisite 2 years READING ZH before commenting?

bobthehorse's picture

Post-industrial America.

What a shithole.

The kings have capitalism have reduced us to slaves.



Angus McHugepenis's picture

Already done and in place. It's call the Bernanke Death Print Star.

Tango in the Blight's picture

No build a Death Star and let Luke destroy it. Then build another Death Star and let Lando destroy it. It's the ultimate stimulus, so sayeth Obi Wan Bernanke.


outamyeffinway's picture

From the Death Star we can branch out and mine asteroids.

localsavage's picture

Fuck it .....make the poverty level 15k and Obama can talk about how many he has lifted from poverty.

DoChenRollingBearing's picture

The whole employment picture is very bleak.  We will not be growing jobs or growing the economy.


N N Taleb says in his new book that education FOLLOWS a nation's wealth.  That is, a country gets rich, THEN improves its education (I cannot provide collaborating info though).  He says there is NO EVIDENCE that improved education makes a country get richer.  Of course a degree sure does help MANY individuals do better...

If what Taleb says is true, then ALL MONEY spent by .gov on education is not only wasted, but a big negative.

Sudden Debt's picture

We will be growing weed to deal on the corners of the street

Carl Spackler's picture

"They" already do that in California.

Check out Mendocino County.

Any other ideas?

Sudden Debt's picture

Well than Americans should grow some balls to do something about their problems and get out of their fucking cough!

Angus McHugepenis's picture

"get out of their fucking cough"!

I think you meant couch, as in sofa, as in sofucking good to sit on as my ass gets bigger with every ton of Cheetohs I eat watching DWTS, NASCAR, football, etc.

My doctor once asked me to turn my head an "cough". That's the last time I ever went to him. I started seeing his wife after that.

Pure Evil's picture

Yes, everyone becomes employed in some phase of the entertainment industry. Sports, movies, television, and porn.

Angus McHugepenis's picture

And the way things are going we will be smoking our own inventory since nobody can afford to buy it. I don't take EBT's or SNAP or whatever they call it these days. And I most certainly WILL NOT accept a blow job from a toothless hobo as payment either!

NidStyles's picture

Education is subject to the same Demand/Supply as the rest of the market. If there is no demand for higher education or intelligent workers, then guess what, there will be no supply created for that demand. Doesn't matter if you given millions of degrees out a year, the demand from the market defines what those graduates actually need to know, and it creates the environment that teaches them how to think by putting them in realistic situations for those fields.


You can not educate people on how to think, or what they should think about. Only by actual experience and demanded ability can they learn these things.

azzhatter's picture

Because wealth is created by actually producing something, not consuming it. These "well" educated kids today think life is just sitting around circle jerking for a big salary. You know, like CNBC pundits.

Seasmoke's picture

and NOT ONE of those quarter jobs, is a public employee

DOT's picture

Not True !

States and public bodies such as universities are notorious abusers of the "limited term" employment agreement. No benefits, the guy working next to you makes $68K with all the perks, and you are out on your ass after 5 months.

NidStyles's picture

Odd, the same people that I went through school with as my teachers are all still there in those schools.

DOT's picture

Who runs the networks and makes sure all your old school chums (indoctrinators) get paid ?

edit: forgot my s








Teamtc321's picture

You should have checked native american even though you are probably not and wrote in progressive in your Bio. You would be sitting right in there still with the rest of the eater's. 

Problem solved eh...........Simple enough.


lakecity55's picture

Soon, we'll all be Public Servants, Comrade!

Forward, Soviet!

rsnoble's picture

Let's see..........a consumer based society that has 1/4 of the population below the poverty line meaning those in realistic poverty is a much higher %.  And what seems to be the problem????  It's hard to sell people stuff beyond rent and food.  Maybe that's why food is high?  They'll get all your money and then force you into borrowing it as well. Fuck them all this collapse is well deserved.  Of course it won't really hurt the rich they'll still have all that nasty gold they warn us about and the poor will just die.  End of story.

clagr's picture

This is not suprising since the 'poverty level' is a function of the average earnings measure. It automatically goes up as incomes go up. It is calculated to be roughly at the 1/4 point.

hardcleareye's picture

According to the Census Bureau..

"Poverty thresholds were originally derived in 1963-1964, using:

  • U.S. Department of Agriculture food budgets designed for families under economic stress.
  • Data about what portion of their income families spent on food."   


"..... updated for inflation using Consumer Price Index (CPI-U)."


I call bullshit on your statement......" It is calculated to be roughly at the 1/4 point."




secret_sam's picture

That's not true.  Why would you make something like that up?

The poverty level was initially "asserted" by some arcane calculation mechanism in 1963, and has been calculated ever since by adding CPI adjustments.

Since FEDGOV completely distorts CPI, it's bound to be on the low side.

An individual qualifies as being "in poverty" if his/her household income is below $11,170, unless over the age of 65, in which case it's below $10,800.  I guess old folks don't need to eat as much.

A Nanny Moose's picture

Ha! We simply couldn't afford using the real poverty level.

syntaxterror's picture

get to work mr. chairman!

ebworthen's picture

And the FED buying $85 Billion per month in MBS's and other financial deriviatives is supposed to help employment.

And Obamacare is going to encourage employers to hire full time career employees.

And the mountainous debt and deficit and unfunded liabilities won't crush the buying power of the ever shrinking amount of dollars made (or cause stagflation, bi-flation, or hyper-inflation).

I never realized a PhD in Economics included an emphasis in Fairy Tale Construction.

cynicalskeptic's picture

well..  the Fed IS keeeping bankers employed........ (and very well compensated as well)

Carl Spackler's picture

"And the FED buying $85 Billion per month in MBS's and other financial deriviatives is supposed to help employment."

Yes.  Those employed at Goldman Sachs and other primary dealers.

lolmao500's picture

Good thing...


Study: Nearly Half In U.S. Lack Financial Safety Net

Nearly 44 percent of Americans don't have enough savings or other liquid assets to stay out of poverty for more than three months if they lose their income, according to Wednesday's report by the Corporation for Enterprise Development. Almost a third have no savings accounts at all.

Recovery indeed.

Getting Old Sucks's picture

I don't even believe the 44% figure.

azengrcat's picture

LOL why would you save money where creditors could get it?  Leverage to the max and jam all your savings in your retirement account(s).  If something bad happens go bankrupt and play the routlette wheel again.  If you don't have a job you can earn your EBT, cell phone, and free medical while sitting on fat 401K stacks.  If the printer keeps printing you gotta keep dancing.

ebworthen's picture

How the hell do you build a safety net when both hands are hanging onto a limb?

And those that did build one got holes cut in half of it in 2008, and since then are getting 0.35% interest, and are going to get reamed again by the next crash and the draconian taxes that CONgress will slap onto any and every IRA and 401K (if they don't just confiscate the money outright).