A suddenly seemingly hawkish Ben Bernanke may be giving the impression he is preparing to taper because he feels confident enough about the recovery (just don't ask him about sudden dramatic rises in yields: that "puzzles" him [12]). Yet as those who have been reading Zero Hedge for the past three years know [13], this jobs "recovery" is purely quantitative (not to mention seasonally adjusted): the quality of jobs regained is [14], in a word, abysmal, with the bulk of new job creation benefiting part-time and minimum-wage jobs. If anything, this loss of saving power, is the backdrop not for a recovery, but for a depression far more acute than the current "sugar-high" one when the Fed finally pulls the training wheels off, and when the US consumer realizes that all purchasing power is gone, all gone, and in exchange the only valuable and competitive job skills gained have been, well, absolutely none.
Here are the facts from the NELP [15]:
During the recession, employment losses occurred throughout the economy, but were concentrated in mid-wage occupations. By contrast, during the recovery, employment gains have been concentrated in lower-wage occupations, which grew 2.7 times as fast as mid-wage and higher-wage occupations. Specifically:
- Lower-wage occupations were 21 percent of recession losses, but 58 percent of recovery growth.
- Mid-wage occupations were 60 percent of recession losses, but only 22 percent of recovery growth.
- Higher-wage occupations were 19 percent of recession job losses, and 20 percent of recovery growth.
[16]
2 The lower-wage occupations that grew the most during the recovery include retail salespersons, food preparation workers, laborers and freight workers, waiters and waitresses, personal and home care aides, and office clerks and customer representatives.
[17]
3 The unbalanced recession and recovery have meant that the long-term rise in inequality in the U.S. continues. The good jobs deficit is now deeper than it was at the start of the 21st century:
- Since the first quarter of 2001, employment has grown by 8.7 percent in lower-wage occupations and by 6.6 percent in higher-wage occupations.
- By contrast, employment in mid-wage occupations has fallen by 7.3.
In addition, the wages paid by these occupations has changed. Between the first quarters of 2001 and 2012, median real wages for lower-wage and mid-wage occupations declined (by 2.1 and 0.2 percent, respectively), but increased for higher-wage occupations (by 4.1 percent).
[18]
4 Industry dynamics are playing an important role in shaping the unbalanced recovery. We find that three low-wage industries (food services, retail, and employment services) added 1.7 million jobs over the past two years, fully 43 percent of net employment growth. At the same time, better-paying industries (like construction; manufacturing; finance, insurance and real estate; and information) did not grow, or did not grow enough to make up for recession losses. Other better-paying industries (like professional and technical services) saw solid growth, but not in their mid-wage occupations. And steep cuts in state and local government have hit mid- and higher-wage occupations the hardest.
[19]
In short, America’s good jobs deficit continues. Policymakers have understandably been focused on the urgent goal of getting U.S. employment back to where it was before the recession (we are still missing nearly 10 million jobs), but the above findings underscore that job quality is rapidly emerging as a second front in the struggling recovery.
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And while the Fed is finally thinking about the labor force participation rate as a factor in explaining the unemployment rate (after ignoring it for the entire period it was helping to push the unemployment rate lower), the smartest economists in the room have glaringly forgotten that not all jobs are created equal and that a part-time WalMart greeter "job" is just a little less equal than a Goldman Sachs CEO "job."
Of course, if the Fed wasn't blatantly ignorant of the smallest and most obvious details, it wouldn't have to monetize $2.5 trillion in securities just to undo the mistakes of its previous failed attempt at central planning.