It was JOLTS report day today, and because it’s one of Federal Reserve Chair Janet Yellen’s favorite measures of labor market health (she’s a labor market specialist), it’s always worth scrutinizing closely. As usual, most of the commentary generated by this monthly survey of job openings and labor turnover (including hiring and quitting activity) focused on how many positions employers say they’re looking to fill. (The latest June figure fell a bit month to month, but it’s still at near-record levels.) And as usual, I’m more focused on where these figures are changing within the labor market – because to heal meaningfully, the economy needs not simply more jobs, but more good jobs.
Discouragingly, the June report shows that high and rising levels of the employment opportunities offered by this economy are still coming in the kinds of low-pay, dead end sectors few parents would hope their children stay in – if they enter them at all. More and more of the new jobs are also found in what I call the government-subsidized private sector – parts of the economy that aren’t formally owned by the government, but where hiring (and other performance measures) are heavily influenced by government largesse. Health care services is the major example here.
According to these Labor Department data, 32.79 percent of job openings posted in June were in three low-wage sectors: retail trade, leisure and hospitality, and the poor-paying segments within a larger category called professional and business services. (Workers in these less-than-choice jobs range from clerical personnel and janitors to call center and telemarketing employees to security guards.) And actually, this figure is conservative, since many other broad sectors of the labor market include their own low-paying sub-sectors.
For comparisons’ sake, when the last recession technically started, in December, 2007, these low-wage openings accounted for 30.46 percent of all listed job openings. The percentage dipped to 29.48 in June, 2009, when the current recovery technically began, but then rebounded to 32.34 last June. One year later, we learned today, it’s higher still.
In addition, the portion of America’s private sector still predominantly influenced by market forces keeps generating ever smaller shares of the nation’s job openings. When the recession supposedly began, the subsidized private sector accounted for 17.74 percent of all new openings. At the recovery’s onset, this figure rose all the way up to 21.98 percent – reflecting the health care services sector’s unique employment resilience during the downturn and its immediate aftermath.
As the “real” private sector regained its job-creation momentum, the prominence of subsidized job openings faded – to 17.30 percent last June. But by this June, the new Labor Department report shows, it was back up to 18.86 percent.
If you’re fine more than half of America’s new employment opportunities being created by parts of the economy that either pay poorly or rely on government subsidies, you’ll be cheering the new JOLTS numbers. If you think they’re a dubious foundation for enduring prosperity, you’ll recognize them as yet another sign that, despite a low overall headline unemployment rate, the U.S. Labor market and the broader economy remain a long way from health.