Wednesday, 30 April 2014

Fast-food jobs drive employment growth in US

Report shows more gains in low-wage jobs than better paid ones
The Straits Times, 29 Apr 2014

WASHINGTON - The deep recession wiped out primarily high-wage and middle-wage jobs. Yet the strongest employment growth during the sluggish recovery has been in low-wage work, at places such as strip malls and fast-food restaurants.

In essence, the poor economy has replaced good jobs with bad ones. That is the conclusion of a new report from the National Employment Law Project, a research and advocacy group, analysing employment trends in the US four years into the recovery.

"Fast food is driving the bulk of the job growth at the low end - the job gains there are absolutely phenomenal," said Mr Michael Evangelist, the report's author. "If this is the reality - if these jobs are here to stay and are going to be making up a considerable part of the economy - the question is, how do we make them better?"

The report shows that total employment has finally surpassed its pre-recession level. "The good news is we're back to zero," Mr Evangelist said.

But job losses and gains have been skewed. Higher-wage industries - like accounting and legal work - shed 3.6 million positions during the recession and have added only 2.6 million positions during the recovery.

But lower-wage industries lost 2 million jobs, then added 3.8 million.

With 10.5 million Americans still looking for work - the unemployment rate is 6.7 per cent - employers feel no pressure to raise wages for those who are working. As a result, the average household's take-home pay has declined through the recession and the recovery to US$51,017 in 2012 from US$55,627 in 2007, after adjusting for inflation.

With joblessness high and job gains concentrated in low-wage industries, hundreds of thousands of Americans have accepted positions that pay less than they used to make, in some cases, sliding out of the middle class and into the ranks of the working poor.

That includes Ms Connie Ogletree, a former administrative and executive assistant who now earns US$7.25 (S$9) an hour at a McDonald's in Atlanta.

Ms Ogletree is in school working towards a bachelor's degree, in the hope of returning to a white-collar position. Meanwhile, she and her older sister have scrimped and saved to make ends meet on her meagre earnings. She said she appreciated her job - many do not have one - but that she found the work tough.

"When you go into a fast-food restaurant, you want to be sure the people in the back are doing the best job they can," she said. "You want them not to be worried about missing a day if they're sick, to be able to go to a child's play at school or a PTA meeting. I'd like a vacation once a year, but my employer doesn't offer that, or sick days."

Economists worry that even a stronger recovery might not bring back jobs in traditionally middle-class occupations eroded by mechanisation and offshoring. The US work force might become yet more "polarised", with positions easier to find at the high and low ends than in the middle.

The swelling of the low-wage work force has led to a push for policies to raise the living standards of the poor, including through job training, expansion of health-care coverage and a higher minimum wage.

President Barack Obama has supported a Democratic proposal to lift the federal minimum wage to US$10.10 an hour from its current level of US$7.25. Doing so would "lift wages for nearly 28 million Americans across the country", he said.

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