We Need More Than Just More Jobs

“Poverty in America: Why can’t we end it?” Professor Peter Edelman asks. Or maybe the New York Times headline writer asks, since Edelman proceeds to tell us that we can — and how.

Top of the to-do list is to create more jobs that pay decent wages.

Well, how do we do that?

We need a full employment policy, Edelman says. This, I take it, means both public investments and diverse fiscal and labor policy changes that would achieve — and then sustain — a negligible unemployment rate.

We’d have more jobs, but also a relatively small pool of jobless job seekers. Employers would thus have to offer decent wages if they wanted to hire people qualified for the jobs they needed to fill.

Professor Robert Pollin, author of the new Back to Full Employment, says this happened in the 1960s and again in the late 1990s, especially for people “at the low end of the labor market.”

Progressives, Edeleman among them, also call for larger investments in education and skill-development.

Not the answer, according to an analysis by the Center for Economic and Policy Research.

We’ve already got a higher percent of college graduates in the workforce than we did at the end of the 1970s. Yet the share of good jobs, as CEPR defines them,* is smaller — and was even before the recession set in.

The problem, it says, isn’t that workers’ skills haven’t kept up with the pace of technological change — though many allege a “skills mismatch” as the source of our persistently high unemployment rate.

It’s that workers have lost their bargaining power, especially those at the middle of the income scale and below.

Diverse changes in the labor market are responsible for this, e.g., jobs outsourced from the public sector and from local manufacturing to cheap labor markets overseas, a “dysfunctional immigration system” that depresses both wages and other aspects of job quality.

For these and a variety of other reasons, many of the top-growing occupations are in service areas where wages are characteristically low — retail sales, home care, food preparation and other restaurant work, etc.

These jobs obviously can’t be exported. Nor can the people who do them be replaced by machines.

But barring policy changes, they’ll still be low-wage jobs with few or no benefits.

I’m all for improving our public education system and for making it possible for low-income people to go to college — and graduate. We’ve got a long way to go.

But if every working-wage person in the country had a college degree, we’d just have even more college graduates doing work well below their competencies — and effectively pushing out people whose skills match the job requirements.

So we obviously need more good jobs for these current and future college graduates.

But if we’re going to end poverty, we need to make those low-paying service and other proliferating bottom-of-the-barrel jobs better too.

I’ll have more to say about this. In the meantime, Happy Labor Day to you all.

* A “good job” pays at least $18.50 an hour — the 1979 inflation-adjusted median for men. It also offers employer-subsidized  health insurance and an employer-sponsored retirement plan. CEPR considers other aspects of job quality important, e.g., paid sick leave, but couldn’t get reliable data to measure changes since the end of the 70s.

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4 Responses to We Need More Than Just More Jobs

  1. I totally agree, Kathryn. I too am all for education and skills development. They are worthwhile in and of themselves.

    But we’re fooling ourselves … and falling for a trap … if we let ourselves think most of low pay in America is because of low worth.

    Fact is, we rely on those low-skilled workers a lot. We could never see ourselves doing that work. So, in one sense, we value that someone else is doing that work. We just don’t value the time they put in.

  2. Kathryn Baer says:

    We would certainly be falling into a trap if we told ourselves (or were persuaded by others) that low pay reflects the low value of the work performed. I think, however, that employers generally pay as little as they can. The value of the work performed isn’t the determining factor.

    Still working on this issue, Michael. Stay tuned.

  3. [...] touted as the answer to persistently high poverty rates. I, among others, am  inclined to think that’s over-simple, though no doubt part of the answer — certainly here in the [...]

  4. [...] I’ve written before, I find this doubtful, though it would surely move some of the low-income workers up from [...]

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