(What’s Left of) Our Economy: The New JOLTS Data Flunk the Job Quality Test

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administrative and support services, Employment, job openings, job quality, Jobs, JOLTS, leisure and hospitality, professional and business services, recovery, retail, subsidized private sector, wages, {What's Left of) Our Economy

If you’re into quantity over quality, you’ll agree with the apparent consensus this morning that the just-released Labor Department JOLTS report was good news – and could put pressure on Federal Reserve chair Janet Yellen to raise interest rates at the central bank’s meeting this month, since it’s one of her favorite measures of labor market health. If you rank quality higher, you’ll have real doubts, for the new statistics on turnover in the labor force make clear that the American jobs market keeps morphing into an ever lower-wage jobs market.

Quantity-wise, the JOLTS report was indeed a winner, showing openings for a record 5.753 million employment opportunities in July – an all-time monthly high. But an unusually large share of these job openings came in anything but the kinds of positions any responsible parent would want their child to choose for a career. I can’t say that this is a record (that would take lots of numbers crunching) but fully 34.09 percent of the openings were in the low-wage sectors of retail, leisure and hospitality, and a low-paying sub-sector of the professional and business services category called administrative and support services. (See last month’s JOLTS post for more info on this latter group of service jobs.)

But I can say that this low-wage share of the latest monthly job openings number (all the July data are preliminary) is higher than its June counterpart – which itself was revised upward from 32.79 percent to 33.14 percent. It’s higher than the level from a year ago (32.09 percent). It’s higher than its level when the current recovery technically began, in June, 2009 (29.48 percent). And it’s higher than where it was when the last recession began, in December, 2007 (30.46 percent).

I completely agree that for a great many reasons, any job is better than no job at all. But shouldn’t an advanced economy like America’s that’s more than six years into an economic recovery be creating better and better job opportunities for its population, not worse and worse?

The lone development that arguably could pass for good news in the JOLTS report is the dip in the share of job openings in the government-subsidized private sector – industries like healthcare services, where levels of demand and employment largely stem from politicians’ decisions, not market forces. Such openings represented 17.96 percent of all openings in July – down pretty significantly from an 18.82 percent June figure that itself was revised down from 18.86 percent.

Even better, this preliminary July figure is also lower than last July’s 18.11 percent, and way down from the 21.98 percent level it hit when the recovery began, and healthcare hiring was the only part of the jobs market showing any life at all. But the government-subsidized private sector generated only 17.74 percent of new job openings at the last recession’s December, 2007 onset, indicating that, again, six-plus years into a recovery, even on the quantity side, the “real” private sector still isn’t pulling the job-creation weight that a truly vibrant economy needs.

(What’s Left of) Our Economy: Few Signs of Real Recovery in the JOLTS Labor Data

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hiring, job openings, job quality, Jobs, JOLTS, labor, recovery, {What's Left of) Our Economy

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.