September 6, 2013 (Jobs Byte)

September 6, 2013

I did a short post while everyone was out enjoying their Labor Day weekend that I want to briefly revisit. The topic was the growth of bad jobs in the current recovery.

As many people have noted, a disproportionate share of the jobs being created in this upturn are in low-paying sectors like restaurants and retail trade. This means that even the people who are able to find work in the current labor market conditions are unlikely to get a job that will provide enough income to support a family.

This is clearly bad news for large segments of the workforce. The question is why are we seeing so many bad jobs?

On the one hand we have the technology story which tells us the economy has changed. The jobs that used to provide a decent standard of living for the middle class are disappearing. In our brave new world of robots and computers the economy creates some number of very good jobs for the people with the right skills and it creates bad jobs for everyone else.

The other line of reasoning is that it is not technology that has changed, rather it is people's desperation that is forcing them to take bad jobs that they would not have considered otherwise. In this view the bad jobs were always there, but most people had better alternatives so they didn't take them. What's changed from the period when we didn't see so many bad jobs is that we have a much weaker labor market. The weakness of the labor market is the key factor in this story.

Note that these two stories have very different policy implications. In the first story, we want to train more of the losers to get the skills they need to become winners. For the ones who are too old or just can't hack computer technology, well maybe we can dig up some spare change to keep them fed and housed, but you know, life is tough.

In the weak labor market story the key is to boost demand. This can be done through government spending, reducing the trade deficit, or by redistributing work through work sharing. If the labor market tightens then people will be able to get better jobs. In fact, if the labor market tightens enough even the bad jobs will become better jobs. In a tight labor market, employers will pay people much more to work in fast food restaurants or as retail clerks.

President Obama is in St. Petersburg, Russia to participate in the G20 Summit today and tomorrow, amidst a time of heightened tensions between the U.S. and several G20 member nations. Looming over the summit are the Obama administration’s plans for a possible military attack on Syria, while Russian President Vladimir Putin has said that a U.S. military response without U.N. Security Council approval “can only be interpreted as an aggression" and UNASUR – which includes G20 members Argentina and Brazil, issued a statement that “condemns external interventions that are inconsistent with the Charter of the United Nations.”

New revelations of NSA spying on other G20 member nation presidents – Dilma Rousseff of Brazil and Enrique Peña Nieto of Mexico – leaked by NSA whistle-blower Edward Snowden and first reported in Brazil’s O Globo, have also created new frictions. Rousseff is reportedly considering canceling a state visit to Washington next month over the espionage and the Obama administration’s response to the revelations, and reportedly has canceled a scheduled trip to D.C. next week by an advance team that was to have done preparations for her visit. The Brazilian government has demanded an apology from the Obama administration. In an interview with Reuters on Wednesday, an anonymous senior Brazilian official underscored the gravity of the situation:

[T]he official, who declined to be identified due to the sensitivity of the episode, said Rousseff feels "patronized" by the U.S. response so far to the Globo report. She is prepared to cancel the visit as well as take punitive action, including ruling out the purchase of F-18 Super Hornet fighters from Chicago-based Boeing Co, the official said.

"She is completely furious," the official said.

"This is a major, major crisis .... There needs to be an apology. It needs to be public. Without that, it's basically impossible for her to go to Washington in October," the official said.

Other media reports suggest that Brazil may implement measures to channel its Internet communications through non-U.S. companies. But when asked in a press briefing aboard Air Force One this morning, Deputy National Security Advisor for Strategic Communications Ben Rhodes did not suggest that such an apology would be forthcoming:

Since the beginning of the global economic downturn in 2008 governments around the world have faced protests led by popular movements. 

Recently there have been mass protests close to home, in Brazil. These protests were initially sparked by a hike in bus fare prices and tensions over preparations for the FIFA World Cup but quickly developed into more complex nationwide movements demanding more government transparency, particularly with regard to public spending; increased investment in social safety-nets, and greater opportunities for political participation.

The Brazilian protests made big news headlines here in the States; the largest such protests in Brazil since the early 1990s. However, while there is worldwide attention to mass uprisings, there has been little U.S. media coverage of a national strike taking place in another nearby country, Colombia. As explained by Dave Johnson from the Campaign for America’s Future:

There is a big strike in Colombia, and you probably don’t know about it. Farmers and others are protesting over a variety of grievances including the devastating effect of free-trade agreements, privatization and inequality-driven poverty. Corporate-owned American media is not covering it... Almost the only American outlet covering this strike is the Miami Herald.

In fact, major news outlets like The Washington Post and The Los Angeles Times have not covered the farmers’ national strike in Colombia to date (save for the Post’s running of a 127-word AP blurb on August 30). The New York Times has only acknowledged the Colombian farmers’ struggle in an article on the stalled Colombian peace talks from Saturday, August 24 and a 130-word note on August 31. The earlier article mentions the farmers’ struggle in passing:

The rebel group said in its statement that it needed to ‘focus exclusively’ on analyzing Mr. Santos’s proposal, while also criticizing the government's economic and social policies at a time when protests by farmers, truckers and coffee growers are roiling parts of the country.

Dean Baker
Truthout, September 2, 2013
The Huffington Post, September 2, 2013

Dean Baker
Al Jazeera English, September 1, 2013