Numbers don’t always tell the whole story – and in the case of the U.S. job market, don’t let the record-low unemployment figures fool you.
While the common narrative says that the job market is booming based on the Department of Labor’s employment statistics, a deeper dive pokes a few wholes in this theory. As many Americans have discovered, quantity isn’t always better than quality.
Though the U.S. government has reported 50-year highs in employment for eight consecutive years, the reality is that the job market isn’t as robust as we have been led to believe. Job seekers have been forced to spend copious amounts of time searching for employment, only to be disappointed with low salary offers. Those lucky enough to have a job have seen minimal wage increases. And many newly created jobs are in the gig economy – i.e. freelancing with companies such as Uber, Lyft and Instacart – that aren’t viable long-term career options.
The evidence contradicting the “best job market ever” narrative isn’t just anecdotal. A recent study by the Brookings Institute revealed that a substantial amount of newly created jobs fall in the “low-wage” category. The report published by this nonprofit public policy organization showed that more than 53 million American workers earn low hourly wages. That figure is staggering when you consider that it represents nearly half of all workers between the ages of 18 to 64.
In an effort to measure job quality and pay, researchers have created a new metric called the U.S. Private Sector Job Quality Index (JQI). This metric tracks the income an employee’s job generates on a weekly basis, and early returns have not been promising.
Like the Brookings Institute study, JQI data shows a slow hourly wage along with flat or declining hours worked. For nearly 30 years, a toxic formula of less hours worked and less pay has left little room for growth for many American workers.
While prior generations excelled in the manufacturing sector, the U.S. economy has shifted toward a service-based one built around healthcare, hospitality, restaurants and leisure. Unfortunately, those types of jobs include much lower wages and fewer opportunities for career advancement – many do not even include important benefits such as healthcare or retirement plans.
If you are one of the millions of Americans working a low-quality job, you can expect to make about $14.65 per hour while working just under 25 hours per week. That $360 weekly paycheck certainly falls well short in paying the bills.
America’s 13.5 million retail workers don’t have it much better. While they do get a slight bump in hourly pay ($16.73 per hour) and hours worked (30.3), that amounts to just over $500 in weekly pay. Overall, the lack of upward mobility, healthcare coverage and other benefits leaves millions of Americans in a disadvantageous position when it comes to their finances.
Daniel Alpert, an adjunct professor at Cornell Law School and managing partner of Westwood Capital, warned, “This is talking about the erosion of the middle class: the more people you have in low-wage, low-hour jobs, the worse the inequality is.”
Certain industries will always have a strong demand for highly skilled jobs that attract qualified candidates with high salaries, inclusive benefits packages and plenty of room for growth. Unfortunately, the percentage of workers who have a legitimate shot at these types of careers is quite low. That leaves millions of Americans struggling to get by on low-wage positions and a stagnant future.
The government needs to be more honest with its citizens when it comes to job inequality in America. Just because the raw numbers reflect record-low unemployment, that does not mean the job market is robust or even good.
Quality is more important than quantity, and the job market is no different.