Economy

Joblessness: A chronic drag on the economy and social stability

Commentary: America's unemployment and low-wage crisis poses severe challenges

Job seekers wait in line to enter a job fair at a new Target store on Aug. 15, 2013, in San Francisco.
Justin Sullivan/Getty Images

Every month we get a dose of news about whether the number of new jobs met expectations. The latest news told how America added 148,000 jobs in September — nowhere near the 180,000 expected and well below what we need to replace the millions of jobs lost in the Great Recession.

This focus on predictions distracts from the much more important and troubling story in the official jobs data.

The long-term prognosis is that America does not have — and is not going have — enough jobs for everyone who wants work, at least not under current government policies. Moreover, most of the jobs that have been created during the so-called recovery are low-paying positions, many of them part time with no benefits. These two trends pose major challenges to social stability, long-term economic growth and eventually levels of crime.

A chronic, long-term drag

To be sure, there will be more jobs in the years ahead but not enough to keep up with population growth. Since 2000 the resident population has grown eight times as fast as the number of jobs, a trend illustrated in the graphic accompanying this column (see below).

The employment-to-population ratio has fallen, and it's not headed back up. To restore the ratio to its prerecession level, the United States would need 9 million more jobs today.

The country needs about 90,000 more jobs each month just to keep up with population growth. That means in September, just 58,000 of the new jobs helped reduce the job shortfall. At that rate, it would take almost 13 years just to get back to prerecession levels, which says that the job shortage is a chronic, long-term drag on the economy and the human spirit.

Average wages rose 2.1 percent over the prior year, but that is misleading because higher pay tends to be for the better-paid jobs. For millions of Americans, wages in real terms are flat to falling — a trend that mirrors the decline in union membership among private-sector workers since 1973. The real median wage has been stuck in a narrow range just above $500 per week since 1999. One in three U.S. workers — more than 50 million people — makes less than $15,000 per year, which is not enough to make ends meet.

McBudget

McDonald's tacitly confirmed this fact in July when it provided employees an online brochure on how to budget. The fast-food chain's primary recommendation: Work two jobs.

What the brochure did not show — though it can be calculated from the budget — is that even with two jobs to make ends meet, a worker would need to earn almost $4 an hour more than the $9.03 per hour that the typical fast food job pays.

McDonald's model budget includes $20 a month for health insurance. The average actual cost for a single worker is 22 times that much, research by the Kaiser Family Foundation shows. The Affordable Care Act health-insurance exchanges, together with federal subsidies, reduce those costs, but generally not to that 67 cents a day McDonald's imagined.

To its credit, at least McDonald's is being honest that the wages it (and its competitors) pay are not adequate to support even a single person.

Automation and offshoring

But this depressing truth raises several questions: What happens to a society where working two full-time jobs still leaves a person mired in or on the edge of poverty? How will society bear the costs of workers who become disabled because of lack of health care and are forced to become drains on the state instead of sources of revenue? What happens to social stability when there are not enough jobs for all who need work? How much will a scarcity of jobs erode the work ethic? How much will long-term economic growth be damaged by a lack of well-paying jobs — or any jobs at all?

The harsh reality is that today we can produce much more with far less labor. Not only is more work moving offshore; more work is being performed by machines, a form of capital.

The long-term trend is clear in Census data. About 90 percent of Americans were tied to farms in 1790. That fell to 41 percent by the 1900 census. It now hovers just above 1 percent of the population.

Manufacturing is going the same way as agriculture. It takes fewer hours to build a car now than in the past. Much of the work is done by robots. Even hotel chambermaids are at risk from automated vacuum cleaners.

In fact, any job that can be performed on a computer — engineering, tax-return preparation, financial services — may become automated or move to lower-paid locations that, while halfway around the globe, are only a fraction of a second away.

Although America's employment crisis is grave, there are solutions available that are much less costly than ignoring the problem. We will examine some of them in future columns.

Opinions expressed here do not necessarily reflect those of Al Jazeera America.

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