MONTGOMERY, New Jersey — Job reports have been touted in the media, hundreds of thousands of jobs have been added in recent quarters and the unemployment numbers have looked much rosier than the immediate post-2008 financial crisis.
The reality? A deeper look into the numbers shows that labor participation rates are lower than pre-recession levels, suggesting that the lowering of the unemployment rate is in part due to people simply giving up on finding work, and thus they are dropped from the unemployment statistic consideration.
Also, many of the new jobs being created en masse are not high-quality jobs. Many do not require particular skill sets or experience and do not pay good wages. For these reasons, it is important to look deeper into the numbers than relying on just one, like the unemployment rate, or the jobs added. Context can show an angle of the story that changes everything.
The quality of jobs is of huge importance to looking at economic development, as shown above when dealing with U.S. jobs reports. Domestically, a growth in low-quality jobs (defined for the purposes of this article as low wage, low or no benefits, and little job security or promotion potential) is concerning.
This deeper analysis of the recent jobs reports that are cited in the media at face value shows the different story of economic change. A deep structural economic shift affecting the poor especially may be occurring, but without a closer look at the quality of jobs, it would be much more difficult to decipher.
Deceiving numbers are no new phenomena. China’s statistics on everything from air pollution to overall GDP growth are widely known to be inaccurate. As the saying goes, “lies, damn lies, and statistics.” Intentionally or not, statistics must be looked at critically to avoid being led to wrong conclusions.
Abroad, the facts are no different. The quality of jobs is understated and understudied. Healthy and inclusive economic growth would likely result in a growth of jobs in a variety of sectors – not just retail and food service jobs. A healthy and stable economic expansion should result in job growth across many different tax brackets, in myriad different industries.
If the majority of new jobs created are low-quality jobs, what does this mean for the poor – or even middle class- citizens? A majority of job growth concentrated in low-quality jobs suggests that social mobility will suffer. The middling jobs may be stagnating during this time, and median income will also likely decrease (an average of income is generally a misleading metric in the case of income analysis).
Indeed, income inequality can be associated with trends of low-quality jobs being created, as is currently being observed in the United States economy.
When income inequality reaches high levels in developed or undeveloped countries, this can increase levels of poverty, decrease the standard of living, foster social unrest and generally become a huge obstacle to healthy economic growth. Everyone suffers from a lowering quality of jobs in a regional economy, but the poor suffer the most.
The fourth estate should pay more attention to the quality of jobs and other more discrete metrics of economic health and growth. Looking deeper into the data and understanding more subtle trends is important to gain a deeper and more sophisticated understanding of the economic situation at any given time.
When attempting to create economic growth to help the poor, quality of jobs created through economic growth should be carefully monitored to more accurately understand how those in poverty will be affected.
– Martin Yim
Sources: Bureau of Labor Statistics, The Atlantic, New York Times, Wall Street Journal