Indicators of the economic recovery weren’t stellar this quarter: consumer and business spending seem to have slowed down, making analysts nervous. Not to mention news out of Europe that the UK and Spain have slid back into recession. Yet it was just last month that a rosy jobs report from the Labor Department touting the addition of 227,000 jobs made some optimistic that we were finally about to experience a real recovery.
But that glow of returning job security isn’t necessarily going to shine on everyone, even if the recovery really does take hold. A report out on Monday from the International Labor Organization took a look at not just how many jobs are being created but perhaps an even more crucial question: What kinds of jobs are being created in the aftermath of the recession? And the answer isn’t heartening.
We’d hope that as the economy starts to pick up the pieces and dust itself off, it would do so by creating stable jobs that pay decently, putting workers on solid footing as we move out of the mess. Yet that’s not what’s going on. The ILO reports, “Since the onset of the global crisis, part-time employment has increased in two-thirds of the advanced countries [in the report], and temporary employment has increased in one-half of the countries.” This comes on the heels of a general increase in this kind of work over the past two decades. What it means is that the jobs our economic recovery is best at producing aren’t full-time—or even permanent. We may be putting people back to work, but it’s in jobs that offer little financial security.
The picture is as bleak in the United States as it is around the globe generally. Part-time employment grew from just under 10 percent in 2007 to just over that figure in 2010. But even worse is the fact that the percentage of the workers in those jobs who would rather be working full-time doubled, from around 7 percent in 2007 to 15 percent in 2010. That’s a lot of people who aren’t working as many hours as they need to. The recovery period has also steadily created more temporary jobs than stable, lasting ones. The Richmond Fed reports that these jobs accounted for over a quarter of all new private sector jobs created here in 2010—even though they were only about 7 percent of the jobs created after the 2001 recession. Although these jobs dropped severely during the crisis, they’ve now climbed higher than they were in 2006.
Beyond giving workers little stability in their lives, temporary jobs pay poorly compared to their full-time counterparts. The ILO’s analysis of nine countries showed that temporary workers are paid about 40 percent less than permanent workers, and that holds true even when controlling for individual characteristics. It may be unsurprising, then, that the report finds that around the world, “the majority of new jobs are remunerated at a rate below average wages.” Are workers who are lucky enough to be re-employed even making what they need to get by?
The United States in particular has intimate knowledge of this phenomenon: we lead developed nations in the share of low-wage workers. Analysis by the CEPR shows that while more than 10 percent of the workforce in most rich OECD countries is in low-wage jobs—defined as making less than two-thirds of the national median hourly wage—about one-fourth of US workers find themselves in that category. That percentage has been on the rise for at least three decades, and the trend is on track to worsen given the kinds of jobs the economy is producing.
It’s obviously important that those who are out of work find their way back into employment. Having a job is better than none at all. But we’re not putting workers—and therefore our economy—on solid footing if most of them are forced into unstable situations. We’re creating a labor force composed of precarious and low-pay jobs. That means more and more families aren’t earning enough to make ends meet or are working in jobs without a predictable future. No matter the pace of recovery, if it continues to produce this kind of work, we still won’t have an economy built on a solid foundation.
