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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Quantum Nucleonics's picture

While the Fed has had a negative effect on employment as described, there are two likely more important factors... First, a significant portion of the American population who are the primary holders of those temporary, part-time, low skill jobs are as intelligent as your average sofa.  Don't get me wrong, depite "living in poverty", they know how to start their Escalade, change the cable box connected to the their 55" HD flat panel from Springer to Cops, and they can play Angry Birds on their Obama smartphone with the best of them. (Maybe we need to re-define "poverty")  They just don't have any skills that employers actually need.

The other important factor is.... Obamacare. By the end of this year, every employer with more than 50 employees must provide healthcare to all full time employees.  The obvious solution to avoid being slammed with the Obamacare boondogle is to hire only part-timers or outsource overseas.

sethstorm's picture

Then the solution to that is to penalize both practices - temping and outsourcing overseas - and to make the numerical limits 0.

bugs_'s picture

That "poverty line" is probably not adjusted for true inflation so the picture is worse.

Just as the solution to the debt crisis is more debt, the solution to the unemployment crisis is to bring in more cheap labor.  Amnesty will bring millions out of the shadow economy and into that "below the poverty line" stat.

GNWT's picture



party like it's 1999...


with the Silver Liberation Army





dolph9's picture

People here can speak for themselves.

I for one pity the poor fools who are trudging to their full time "jobs", thinking they are "making a difference" and going to be millionaires.  It never occurs to them that they are merely continuing the Ponzi scheme known as Amerika.


Let's get this crash on the road.  Let's celebrate the end of work...let the disability cheats and anchor babies and ghetto queens and aging boomers consume what's left before system reset.

Dre4dwolf's picture

They will just lower the poverty line, thats obviously the solution, we are gona limbo the economy "how low can you go ?"

GNWT's picture

party like it's 1999...


with the Silver Liberation Army...





Angus McHugepenis's picture

GNWT: Sorry to disappoint you... we don't click on spam blogs or website links here. If your sorry attempt at spam is to try and get Google links and ad clicks, well, you're still fucked. Your attempts at gaining page views or Adsense clicks will be for nothing when you get tired of your own efforts, only to realize you do nothing but piss people off with your spam that generates mere pennies from Google ads for your efforts. You will get tired of spending hours spamming the comment sections of blogs, websites, and Eric Holders porn account.

Believe me, I know. I did a test back in 2007/08 to see how much revenue I could generate from NEW websites that I loaded with Google ads and actual informative content. You know what I made on Google ads that year?... $128.00.

I still have about 6 websites that I left up and running after my year long test. Since 2008 those sites have generated another $64 in revenue in the past FIVE YEARS.

Bottom line: Idiots that come to ZH hoping to chase free money from Google ads by spamming links to their own blogs or websites are soon disappointed. You are the latest kid on the block. Angrysinner (bobthehorse & his other aliases) are the most recent idiots spamming links to their worthless blogs.

Stick around if you have something to say. Fuck off if your only purpose is spamming your blog/websites.

EDIT: As I click on GNWT's account profile I get "access denied". I guess that means Tyler has already tossed you.

CuriousPasserby's picture

A quarter of all jobs pay below the poverty line for a family of 4? How many families of 4 are there here?

Maybe 25% of the workforce doen't need to support a family of 4? Lots of students, trainees, pensioners who want a little extra cash, wives/mothers who only need part time work don't expect to make enought for a family of 4. Not to mention not being skilled enought to earn more.

Village Smithy's picture

I think the point is that there is not a lot of money being made out there, that inspite of what the government tells us the economy is shrinking, not expanding. The gov't is doing us all a disservice by not admitting that even harder times are coming. We need a plan to fix a broken system. Not a plan to misinform so that the gross misallocation continues, making things far worse in the future.

caShOnlY's picture

no big deal, just have GM announce the NEW 120 month car loan..... VOILA!!! everyone gets a new car!!!!

Angus McHugepenis's picture

Great idea. A ten year loan for a car that has a 5-7 year shelf life if you never drive it and do all the scheduled warranty maintenance. Sign me up!

I drive a 1988 Ford pickup that I've owned for 5 years. I paid $1,000 for it and my expenses over 5 years are $600 (not including gas). There's not a hope in Hell that any new car dealer will ever see me again in my life time. Where I live, I can budget $2,000 per YEAR and buy another 2 used vehicles that PASS inspection. All I need is willing drivers to fill the seats and we'll take over the world in a bunch of rust buckets without a shot ever being fired.

caShOnlY's picture

the new economy has the poor driving new and the middle class driving used.

Plumplechook's picture

This article is a bunch of fucking bullshit.   Wages for the unskilled in the US are not 'low' - they are simply a true reflection of what these people are worth now.

Wake up and smell the fucking coffee.  In case you didn't get the memo we now live in a globalised world where the shit we buy can be made anywhere.   We want to pay as little as possible for that shit - therefore every manufacturer will find the cheapest workers to make that shit.   Hence its a global race-to-the-bottom for unskilled wages.   There is no reason why workers here in the US should earn one cent more than the equivalent workers making the same shit in some hell-hole in India or China. 

What I hate is the sense of ENTITLEMENT of these fucking unskilled workers in the US.  Somehow they think just because they live here they should earn more money.  But WHY?  Consumers in the US dont want to pay more for the shit these local guys produce - and don't give a shit where the shit is made.   What we especially don't want is to support artifically high wages for these unskilled dweebs so they can live beyond their means.  That is totally unsustainable - and no US corporation can survive for long now paying over-the-odds to local workers.

The answer is simple:  the unskilled need to accept their real worth in this globalised marketplace.  If they don't like it then go get some fucking real marketable skills.




Angus McHugepenis's picture

Did anyone on ZH see the video of the news crew in Detroit film the Chrysler workers exiting the plant at lunch hour and load up in at least 3 of their personal vehicles to go DRINKING IN THE PARK during their lunch break?

Fucking hilarious and sad. The news guy had been stalking these workers for a WEEK and was finally chasing them and yelling questions at them but most tried to cover their faces (yeah, as their vehicles and plates were being caught on camera). About 18 drunken union rats were caught in a park at lunch hour pounding back as much booze as they could swallow (union rules???) and when they got caught they ran like the fucking entitled cowards they truly are.

Apparently this all took place A WEEK AFTER Oscammer made a speech at the same plant that just got a taxpayer bailout to save their jobs. They must have felt entitled to "celebrate"... for an entire week until they got caught drinking their taxpayer funded lunch hour away.

There is a YouTube video of this. I can't look for it because I'm using TOR right now. You ZH'ers are a smart bunch. Google it and watch your tax bailout dollars literally being drunk away. And of course, support the (drunken) American worker who just built your $50,000 new car.

EDIT: I see the UAW is familiar with the ZH red arrows.

ronaldawg's picture

And all of them got reinstated at their jobs.


Who says you can't be a little drunk and high while putting cars together?  What can go wrong?

sethstorm's picture

Sounds like you have a grudge death-wish against these people and you assume that everyone can do as you say. 

Why yes, they have a right to be entitled to a lifestyle fit for being in a First World hyperpower.  Nobody's caring about the business' sense of entitlement to perfect workers and to be treated like they were the Divine Creator himself.

The only function of the world - as you see it - is to completely grind down the First World down to the level of the Third.  It does not work that way, and using the divisive term of "consumer" does not make it any more correct.

Quarky Gluon's picture

Sure specialized skills will work for a while in improving employment but eventually even those jobs may be replaced by robots with artificial intelligence.  Then what?  Are the very few elite that own all those robots be the only ones with any wealth or income?  While some of those elite may give away some of their wealth as charity to the rest of us without jobs or income and struggling with poverty, most will not.  The only solution as I see it is for the government to step in and force a redistribution of wealth because the government will be the only entity with enough power to carry out such an act.  Without the government we will only be left with mere hope that the wealthy elite will have mercy on us and give us a few bread crums so we can at least eat. 

sethstorm'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."

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.

This would be the place for Right to Work to be applied - where you are not required to be a temporary/staffing agency worker to accept employment.  If a business wants temporary workers, it will have to provide a superior argument.  Otherwise a business would have to accept that they can't push around workers by making them accept (perma)temp work.

That, and I'd not mind seeing an employee-side Jackson Lewis grind temp agencies to the ground - with a 96%+ success rate.

Harrison's picture

Funny how the article doesn't mention that a "family of four" generally has TWO people bringing in wages, which would mean that all that has to happen is for both husband and wife to work in order to generate above-the-median household income.

Aegelis's picture

I can't read all these comments, they've gotten way too judgemental of people they don't even know.  Sure there are drug addicts and slackers in society, but there are a whole lot more who work hard trying to do the right thing.  Throwing low-income earners all together into one pot just makes commentators look pretentious, clueless, and useless.

El Hosel's picture

$23,000 was plenty of money when gasoline was 70 cents and a happy meal was $1.99.  The US allows the Bankster bosses and other elites to embezzle Trillions of dollars at the expense of the bulk of the citizens.... hows that working out so far? Works fine if your income is great enough to absorb all the non-inflation that is floating around... The other 90% not so much.

MeBizarro's picture

If you are looking for sympathy or compassion on here for the working poor you aren't going to find much generally.  Ditto a host of other issues too.  

MeBizarro's picture

I always find it ironic on here how there is a extremely liberterian bent with people pissing and moaning about gov't involvement/unions/etc yet when capitalistic practices by large companies are employed to find the cheapest sources of overall production & investing in technology to increase productivity (even if it displaces a lot of human workers) there is a huge uproar.