A large body of evidence indicates that many people who lost jobs in the most recent recession have had to replace them with positions that pay much less. If so, consumer spending has been quietly damaged because of a falloff in discretionary income. That, in turn, drags on gross domestic product moving forward.
New data from Gallup shows that the problem is ongoing, rather than improving. A new survey found:
Americans continue to assess the market for quality jobs in the U.S. negatively, with 74% saying now is a “bad time” to find one, essentially unchanged from February.
The figure is not as low as it was in 2007 and 2008, but it is worse than through much of 2009 to 2011.
Job growth has returned to the United States on a limited basis. The millions of jobs lost in the recession may not be replaced for years. That is the position of Fed chair Ben Bernanke, at least, and he is joined in that opinion by many economists.
The most pressing worry about the jobs that have been and will be added in the near-term future rest with data on how many jobs are “full-time temporary workers” who have no benefits and probably have little job security.
The other signal that the job market recovery numbers are misleading is the rise in productivity. Workers work harder for the same wages they had a few years ago — or for less money. Employers can squeeze more effort out of these people because of job loss fears. Companies have come to rely on this new workforce environment to continue, and to benefit their margins.
More and more work can be done by smart machines. A body of research is emerging about how much this will affect job availability. At the very least, it improves employer leverage with incoming employees. In some cases, it trumps the need for any incoming employees at all.
The GDP effect comes because the cost of basic living expenses has not declined in the past several years, and, in some cases, has risen. Certainly health care expenses have shot up, as has the cost of energy. Food and shelter prices have not dropped. People concerned about the permanence of their work, or their future earnings prospects, often will not go beyond paying for the necessities, if they can even do that.
One of the focuses of the Gallup research is that the Fed will continue to keep rates low as a means of bring down unemployment. However, the forces that make for the lack of quality jobs will not be based on the cost of money, primarily. They will be based on the new reality that employers have the upper hand with workers. There is no reason to believe that will change.
Methodology: Results for this Gallup poll are based on telephone interviews conducted March 7 to 10, 2013, with a random sample of 1,022 adults, aged 18 and older, living in all 50 U.S. states and the District of Columbia.