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Lousy Work, if You can Get it

Gary Lapon Sep 15, 2012

At their convention last week, the Democrats put their record on jobs front and center, claiming to have brought the economy back from the abyss of the economic crisis. They said they had a vision for the economy that will provide workers with a decent life while restoring American industry's competitiveness.

That's no surprise–after all, polls show that jobs and the economy are by far the most important issues for voters. But behind the back-patting and boasting lies the reality of a continuing jobs crisis–and a future in which whatever gains working people won in the past are discarded in a global race to the bottom, leaving U.S. workers to produce more for less.

The U.S. government's monthly report on employment underlined the problem. According to the Bureau of Labor Statistics (BLS), employers added a net total of 96,000 jobs in August–barely enough to keep up with population growth, much less make up for the mass layoffs during the Great Recession. Long-term unemployment continues to plague more than 5 million workers–around 40 percent of the jobless–who have been without work for over 27 weeks.

As pointed out in an August editorial, more than three years into the weakest recovery in history, "[T]he U.S. economy still needs to generate about 10 million new jobs just to make up for losses from the 2007-09 recession and provide employment for young people entering the workforce."

A closer look at the BLS report reveals even worse news. The official unemployment rate declined in August to 8.1 percent–but that's only because more people dropped out of the labor force, and therefore weren't counted in the jobless rate. The BLS's U-6 measure gives a more accurate picture–it includes the unemployed, those employed part-time who would want full-time work, and discouraged workers and others "marginally attached" to the labor market. The U-6 measure stood at 14.7 percent in August.

Another statistic–the employment-population ratio, which measures the percentage of the population age 16 and over that has a job–is at its lowest level in three decades. Since reaching a high point of 63 percent in mid-2007, the figure fell to just over 60 percent as Barack Obama took office and continued to decline before leveling out around 58.3 percent, where it remains today.

African Americans and youth of all races–two groups who mobilized to vote for Obama in unprecedented numbers in 2008–are facing the highest rates of unemployment. Jobless rates for African Americans continue to run at about double the rate for white workers, and official unemployment for workers aged 20 to 24 is 13.9 percent, more than twice that for older workers.

This is one face of the economic crisis still plaguing workers: Three years into the economic "recovery," there is simply not enough work for millions of people who want it.

But there is another jobs crisis–one that gets less publicity. It was summed up aptly by the title of a report released this month by the Center for Economic and Policy Research (CEPR): Bad Jobs on the Rise.

The CEPR report defines a "bad job" as "one that pays less than $37,000 per year (in inflation-adjusted 2010 dollars); lacks employer-provided health insurance; and has no employer-sponsored retirement plan." While these jobs are a step up from unemployment and abject poverty, workers with bad jobs still struggle to get by. They can't look forward to retirement, and without health insurance, they live under the threat that a chance illness or injury could mean financial ruin.

The CEPR found that the share of "bad jobs" in the U.S. economy has increased significantly–nearly one in four jobs were classified as bad in 2010, up from around one in six in 1979. By 2007, the figure for bad jobs was already 22.1 percent–so the trend predates the recession.

The decline was sharpest for those without a high school degree–more than half had a bad job in 2012, compared to one quarter in 1979. Workers aged 18 to 34 were also hard hit, going from 22.4 percent with a bad job in 1979 to 38.5 percent in 2010.

In the past, having a college degree offered significant protection for older workers. But young college-educated workers are increasing likely to find themselves in a bad job, according to the CEPR–plus they face the added burden of paying off increased student loans. More than 15 percent of workers aged 18 to 34 with at least a college degree had a bad job in 2010. Young workers with some college were more than three times as likely to have a bad job (43.5 percent) in 2010 as in 1979 (13.1 percent).

According to the CEPR, the increase in the proportion of bad jobs was primarily driven by a decline in the number of jobs that offer health insurance or retirement plans. And as researchers point out, their figures understate the actual decline in workers' living standards by not accounting for the marked deterioration in the quality of the employer-provided health care and retirement plans where they are still offered.

Over the last 10 years especially, a growing portion health care costs has been shifted onto workers. According to the Los Angeles Times, "The typical family of four with employer-based coverage saw its total monthly health care tab almost double between 1999 and 2009…[Rising] out-of-pocket medical bills…virtually wiped out income gains over the decade, leaving the typical family with just $95 more a month to spend on things other than health care in 2009, compared with 1999."

Today's employer-provided retirement plans have been hollowed out, as well. Over the past few decades, reliable "defined-benefit" plans that pay out a set amount for retirement have in most cases been replaced by "defined-contribution" plans, such as 401(k)s, where workers instead pay into a fund that is linked to financial markets. The percentage of private-sector workers with defined-benefit plans declined by half in the past 20 years, and 401(k)s have not picked up the slack: among those aged 50 to 64, three-quarters have average retirement savings of just $26,395. And half of them have no savings for retirement at all.

According to the CEPR report, "[T]he decline in the economy's ability to create good jobs, in our view, is related to a deterioration in the bargaining power of workers, especially those at the middle and the bottom of the pay scale." This is the inevitable result of the continued drop in the U.S. unionization rate, which has fallen below 12 percent, lower than it's been in over 70 years.

Corresponding to this has been a drop in labor militancy. In the 1970s, on average each year, nearly 1.5 million workers were part of a work stoppage involving more than 1,000 workers. In the 2000s, less than 130,000 workers participated in such a strike in the average year, less than one-tenth the previous level, even though the U.S. workforce is 50 percent bigger since the 1970s.

By attacking unions, employers have been able to chip away at workers' income and especially their benefits–thus capturing the lion's share of income gains over the last three decades, a major reason why inequality remains at levels not seen in the U.S. in 80 years.

All this has taken place under both Democrats and Republicans–a bipartisan character to the bad jobs crisis that was underlined when the Democrats held their national convention in the anti-union, "right-to-work" state of North Carolina.

At the convention, former President Bill Clinton bragged that since 1961, nearly twice as many private-sector jobs were added under Democratic presidents than under Republicans. He said that Obama had created 4.5 million private-sector jobs and had "laid the foundation for a modern, more well-balanced economy that will produce millions of good new jobs, vibrant new businesses, and lots of new wealth for the innovators."

As CNN points out, the claim about 4.5 million new jobs under Obama is misleading. There are not 4.5 million more people working than when Obama took office.

The 4.5 million figure is "is an accurate description of the growth of private-sector jobs since January 2010, when the long, steep slide in employment finally hit bottom," CNN reported. But when the job losses of the first year of the Obama administration are factored in, there is "only a net gain of 300,000 over the course of the Obama administration to date." And once the million jobs lost in the public sector are taken into account, there has actually been a net loss of jobs over the last four years.

For his part, Obama claimed in his speech:

We are making things again. I've met workers in Detroit and Toledo who feared they'd never build another American car. And today, they can't build them fast enough because we reinvented a dying auto industry that's back on the top of the world. I worked with business leaders who are bringing jobs back to America, not because our workers make less pay, but because we make better products–because we work harder and smarter than anyone else.

In reality, employers are relocating jobs to the U.S. in large part because workers in this country are being compelled–as a result of high unemployment, the ongoing erosion of living standards and the dismantling of the social safety net–to worker harder and longer for less.

For example, the Wall Street Journal reported that Caterpillar opened a new non-union plant in Indiana, where new hires make $12 an hour, after closing a plant in Ontario where union jobs paid twice as much. Other major corporations, such as Boeing, have shifted production within the U.S., from regions with higher rates of unionization and higher pay, to regions where workers can be forced to accept less.

According to an analysis by the Boston Consulting Group, the U.S. is "expected to experience a manufacturing renaissance as the wage gap with China shrinks and certain U.S. states become some of the cheapest locations for manufacturing in the developed world."

This begs the question: Who are these jobs really "good" for? While they may help workers scrape by and pay (some of) the bills, employers are the ones who truly benefit. And what is good for the 1 percent is bad for workers.

The fact is that, on the whole, the jobs that are being created, in addition to not being plentiful enough, provide workers with an inferior standard of living, compared with the lost jobs they are replacing.

According to the National Employment Law Project:

In the two years since U.S. employment reached its lowest-point in February 2010, jobs in low-wage industries have grown significantly faster than employment as a whole. This trend…is expected to continue: the Bureau of Labor Statistics estimates that 7 out of the top 10 top growth occupations over the next decade are low wage ones."

Meanwhile, 92 percent of the top 50 low-wage employers made a profit last year, and 63 percent are more profitable now than they were before the recession.

According to the BLS, the professions that will experience the biggest growth by 2020 are registered nurses, retail salespersons, home health aides and personal care aides.

While nurses–who are skilled workers and disproportionately likely to belong to a union–are still able to make a relatively good living, the other jobs pay poverty wages. In 2010, median pay for retail sales workers averaged just $10.09 an hour ($20,990 a year for full-time work), while that home health and personal care aides averaged $9.70 an hour ($20,170 a year).

Then there's the auto industry. Obama, Clinton and all the Democrats tout the auto bailout as among the administration's greatest achievements.

As left-wing journalist Laura Flanders wrote, the bailout of the auto industry was, in fact, begun by George W. Bush before it was taken up by Obama. And the Obama administration used the bailout to demand concessions from autoworkers that "amounted to a slash in all-in labor costs from around $76 per worker-hour in 2006 to just over $50." After the two-tier wage structure the United Auto Workers conceded several years earlier, "[N]ew hires start at $14 per hour–roughly half the pay and benefits of more senior line workers," Flanders wrote.

In other words, rather than a Democratic plan to save good blue-collar jobs, the auto industry bailout was part of a bipartisan effort to use the economic crisis as a pretext to replace good jobs with bad ones.

The result of all of this is that household income has actually fallen more during the recovery that began six months after Obama's inauguration than it did during the recession that preceded it. The majority of working people are worse off today than they were three years ago.

Of course, the recovery hasn't been a complete failure. The rich have done just fine. More than 90 percent of total gains in income during the first year of the recovery went to the wealthiest 1 percent, and corporate profits as a share of the economy are at a record high, while wages are at a record low.

While Republicans are attacking Obama for his poor record on job creation and the economy, they are obviously doing so not out of concern for the plight of working people, but in an attempt to win the election–since their policies would be a disaster for working-class people, employed or unemployed.

The Republicans in Congress have opposed the extension of unemployment benefits, despite record levels of long-term joblessness. They call for tax cuts for the rich, paid for by slashing what remains of the social safety net, and Republican governors like Wisconsin's Scott Walker have been at the forefront of union-busting efforts aimed at eliminating public-sector workers' collective bargaining rights. Although not alone in pushing for austerity, some of the deepest budget cuts at the state and local level have been pushed by Republicans.

Still, Democrats bear a lot of the responsibility for the jobs crisis, despite their rhetoric to the contrary. The politicians of both parties have twisted the truth to paint themselves as champions of good jobs and their opponents as job killers. But neither Democrats nor Republicans have a solution to offer that would guarantee jobs providing comfort, dignity or security.

These will only be won by turning the tide and rebuilding a fighting labor movement.

This article was originally published by Socialist Worker.

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