Jobs Growth Concentrated In Low-Pay, Low-Benefit Industries

The jobs report on Friday was middling at best: decent but not exciting job growth at 175,000 and a very slight uptick in unemployment to 7.6 percent. There were some areas that saw strong growth, however. Yet even that news may not be all positive, as the jobs that were created were in low-wage industries.

Some of the strongest job growth in May was in leisure and hospitality, which added 43,000 jobs, 38,100 of which were at bars and restaurants. Retail also added a lot of jobs, growing by 27,700. While growth in these areas is perhaps a sign of stronger consumer spending, these jobs are mostly low-wage and low-benefit. They also tend to have erratic scheduling, in which employees may not know their schedules ahead of time, and many workers struggle to get enough hours to support themselves.

This has been an ongoing trend in the recovery period. The majority of jobs created since the end of the recession have been low-wage, paying less than $14 an hour. They’ve replaced middle-wage jobs, which were the majority of jobs lost in the crisis. Thus far, half of the jobs created in the recovery have been low-wage. Given such fast growth, a study by the Economic Policy Institute found that more than a quarter of Americans will be working low-wage jobs for the next decade.

There has also been strong growth in temporary jobs, and May’s numbers followed that trend. The economy added 26,000 temp jobs. Overall, they accounted for over a quarter of new American private sector jobs created in 2010 even though they were only about 7 percent of the jobs created after the 2001 recession. Temp jobs have jumped by 50 percent globally since the crisis. These jobs generally pay about 40 percent less than permanent ones.

In response to jobs that pay so low, fast food and Walmart workers have staged strikes in seven cities, demanding higher wages and the right to form unions.