Problem 3: McJobs are taking over
The economy is shedding good jobs, which are increasingly replaced with low-wage, often part-time jobs. During the recovery, job gains have been concentrated in lower-wage occupations, which grew nearly three times as quickly as middle and higher-wage occupations. State and federal governments, for example, have cut 835,000 jobs over the past four years — many of them middle-income positions.
Job growth projections show that this trend will continue. The healthcare, social assistance and retail sectors are among areas expected to add the most jobs by 2020 — all industries notorious for jobs with meager pay and poor working conditions. A lot of these positions will pay the federal minimum wage (US$7.25 an hour) — the inflation-adjusted value of which has declined by more than 30 percent since the 1960s. That is not going to help the approximately 100 million Americans — one in three — either living in poverty or in “the fretful zone just above it,” as the New York Times put it.
Problem 4: Capital is hammering labor
Again, so much for the sharing economy. Workers’ wages as a percentage of the economy just hit another all-time low. In other words, corporations are now paying employees less than they ever have done, as a share of GDP.
At least in the short term, less for workers means more for corporations: Corporate profits as a percentage of GDP are now at an all-time high. Big companies are hoarding cash at historically high levels — not using it for investment, hiring, pay raises or even to reward shareholders. Last time I checked, hoarding is the opposite of sharing. Again, it is a zero-sum economy, and workers are losing. Badly.
Problem 5: Unemployment is twice what they say
Our official 7.6 percent unemployment rate is bad enough, but the real number is actually about twice that. Buried in the monthly jobs report, you will find what is called the U-6 figure, which includes the unemployed, plus those “marginally attached” to the labor force (that is, they want a job, but have largely given up looking), plus those working part-time, but who want a full-time job. The U-6 number for last month was an astonishing 14.3 percent, up half a percentage point from May.
Problem 6: The US is going part-time — and not for fun
In staggering numbers, more US citizens are working part-time — but not because they want to. These involuntary part-timers now number more than 8.2 million — an increase of 322,000 workers from May and almost double the number this time five years ago. It is the highest it has been all year, and the trend line is going in the wrong direction.
Problem 7: Workers are not working
Here is another way of looking at under-employment: Fewer working-age US citizens are working than at any time in the past three decades. That is, the employment-to-population ratio has collapsed. Last month, the ratio was 58.7 percent — a drop from 63 percent five years ago, before the recession hit. Of course, workers sitting on the sidelines are not collecting paychecks, meaning they have much less to spend.
Problem 8: Union wages are much harder to come by
There is power in a union. There is also a higher wage. Last year, the median salary for a unionized worker was about US$49,000, as opposed to about US$39,000 for their non-union counterparts. However, fewer and fewer workers are earning union salaries. Thirty years ago, one in five US workers were union members; now, it is about one in 10.