The growth rate of employment is declining over time, as positive growth weakens and recessionary declines deepen.
Charts and data provided by longtime correspondent B.C. reflect what many know from first-hand experience: employment is trending down. The growth rate of employment is declining over time, as positive growth weakens and recessionary declines deepen.
Though the 3-year average annual change has improved to near-zero, the 5-year (i.e. longer-term trendline) is still solidly negative.
We can see the trend in this table:
Average annual change of employment age 25-54
1990-2000 1.76% 1.34%
1990-2007 1.12% 0.99%
2000- -0.31% -0.32%
2007- -0.84% -1.27%
There are two other trends in employment:
1. Decline of full-time jobs and the rise of part-time jobs
2. Stagnation of high-wage employment and increases in lower-wage job sectors.
The sharp rise in retail employment and restaurant work in the latest jobs report continues the pattern where low-paying sectors show the most rapid growth. Also, wage growth has been less rapid in the restaurant sector than elsewhere (0.6 percent over the last year in restaurants compared with 1.9 percent overall).
Industry Employment Trends August 2013 (select either monthly, quarterly or annual changes)
Largest number of job postings: Healthcare, 547,373, a 17% decline
Biggest percentage increase in job postings: Hospitality, 174,757, +34%
Annual declines in job postings:
Human Resources: -10%
IT-Information technology: -10%
Annual increases in job postings:
Financial services: +3%
The job postings confirm the other data that reflect a job market in which demand is concentrated in lower-wage sectors (hospitality and retail) while demand in higher-wage sectors is tepid.
For all the reasons addressed here and many other sites over the years–offshoring, global competition, labor-replacing technologies, the perverse incentives of financialization, structural changes in the economy, etc.–there is no one simple way to boost full-time, higher-wage employment.
If wages cannot easily be increased, the alternative approach is to dramatically lower the cost of living. For more on this, please see The Pareto Economy (February 18, 2013).
Note: blog entries and email will be sporadic for the next few weeks. Your patience and understanding are greatly appreciated.
My new book The Nearly Free University and The Emerging Economy (Kindle eBook)is available at a 20% discount ($7.95, list $9.95) this week. Read the Foreword, first section and the Table of Contents.