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Saturday, 28 May 2016

Junk-jobs nation

U.S. recovery leaning heavily on McJobs

The U.S. recovery is leaning heavily on McJobs. Lower-paid and temporary work accounted for most of May’s 175,000 employment increase and 850,000 of new jobs in the past year. And part-time work remains high and may rise as Obamacare kicks in. The jump in jobs might look good, but for many it’s not a path to prosperity.

New positions in leisure and hospitality, retailing and temporary work made up 97,000 of May’s increase and 40 percent of the 2.1 million jobs added to the economy since May 2012. Yet their overall share of the existing labor force is just 23 percent. Manufacturing, meanwhile, has added just 41,000 jobs over the past 12 months and actually lost 8,000 last month.

A job’s a job, but weekly earnings average only $525 and $351 in leisure and hospitality compared with $989 in manufacturing and $824 overall. The relatively high number of positions offering more meager pay explains the overall sluggish pace of wage increases, which have barely keep pace with even currently subdued inflation.

Meanwhile, the number of people relying on part-time work has not decreased as much as might be expected. Usually, the ratio increases during recessions – it peaked at 5.9 percent of the workforce in November 2009, for example. Last month, it was 4.7 percent, or 5.9 million. While an improvement, in percentage terms it’s around the same level as the peak of past recessions and is way above the 3 percent of 2007.

Worryingly, that may soon increase even if the economy continues to improve. That’s because President Barack Obama’s healthcare reforms, due to kick in next January, force employers to provide health insurance to employees working more than 30 hours a week. Some employers, especially in industries and companies with thin margins, may shift more of their workforce below that threshold. That’s likely to affect jobs that are already at the lower end of the wage spectrum.

That’s grim reading for blue-collar living standards. Workforce participation is near a 34-year low, even after increasing slightly in May. But for many in or looking for lower-paid jobs, it must often seem barely worth bothering.

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U.S. nonfarm employment rose by 175,000 on a seasonally adjusted basis in May from the previous month, the Bureau of Labor Statistics announced on June 7. The unemployment rate rose by 0.1 percentage point to 7.6 percent. March and April figures were revised down by a net 12,000 jobs.

Professional and business services added 57,000 jobs in May. Temporary help services added 26,000 jobs and in the last 12 months have added 186,000 positions, or 7.5 percent of the total employed in that sector. Leisure and hospitality services added 43,000 jobs and retail trade added 28,000 jobs, while manufacturing employment declined by 8,000 and government employment declined by 3,000.

Since May 2012, temporary help services, retail and leisure and hospitality have accounted for 40 percent of the 2.1 million jobs added to the economy.

Average private-sector weekly earnings rose by 35 cents to $824.21. Manufacturing weekly earnings were $988.58, retail sector earnings were $525.51 and leisure and hospitality sector earnings stood at $351.05.

The number of part-time workers for economic reasons – which excludes students, retirees and the like - was 7.9 million in May, 4.7 percent of the labor force. Part-time work generally peaks in recessions. It hit 4.2 million, 4.5 percent of the labor force, in 1975; 6.9 million, or 6.2 percent of the labor force in 1982 and 9.1 million, or 5.9 percent of the labor force in November 2009. In December 2007, at the start of the recession, it was 4.6 million, or 3 percent of the labor force.

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