Sep. 7, 2012 at 9:36 AM ET
The news Friday that the economy created just 96,000 new jobs in August is another blow to both the millions of unemployed Americans and the countless working Americans who would like to have a better job.
Here's another piece of troubling news: Even if the job market starts to pick up, it may still be hard for some people to find a really good job.
That’s not just because of the Great Recession and sluggish recovery, although the persistently high unemployment rate of the past five years hasn’t helped matters.
Economists say that over the past 30 years or more, the rise of international competition combined with other changes in the U.S. market have generally made it tougher for people to find good-paying jobs that offer great benefits. That’s especially true for people who lack a college degree or other specialized training.
“You’ve had a shift in the economy, obviously, and the composition of the economy,” said Paul Ashworth, chief North American economist for Capital Economics.
A new analysis by the Center for Economic and Policy Research found that 24 percent of U.S. workers held what they defined as a “bad job” in 2010. By their definition, a bad job paid less than $37,000 a year and lacked health and retirement benefits.
That’s up from 18 percent of people who held a similar bad job in 1979. The salary figures have been adjusted to account for inflation.
John Schmitt, a senior economist with the CEPR, a think tank that receives funding from labor unions and other groups, thinks a big problem is that workers don’t have a lot of leeway to ask their bosses for better wages or benefits. That’s been especially true over the past five years or so, as jobs have become more scarce.
“The key for me is the decline in bargaining power of workers,” he said.
He said that’s not strictly about the decline in unionized workers. Even among non-unionized workers, the fact that so many people are competing for the same job has meant that employers have little incentive to offer big wage hikes or generous benefits.
“Employers know that if this worker gives them any push back at all on wages and benefits, they’re going to hire the person who’s just as qualified who is standing behind them,” Schmitt said.
Even when the unemployment rate was lower, Schmitt said it was getting tougher for many workers to ask for better pay or benefits.
One big factor is competition from other countries, where companies have been able to find workers to do similar work for lower wages.
That’s been most noticeable in U.S. manufacturing, which has shed millions of jobs since the late 1970s and early 1980s. But plenty of white-collar technology and professional workers – including even lawyers – have started to see similar competition from workers in India, China and other countries.
The Bureau of Labor Statistics reported Friday that manufacturing shed about 11,000 jobs in August. Some of the biggest job gains were in professional and technical services, including computing, and health care.
The long-term outlook shows that this could continue to be a problem.
The Bureau of Labor Statistics' list of the top 10 jobs that are expected to see the most job growth between 2010 and 2020 starts off on a high note. The number of registered nurses, who take home a median salary of $64,690, is expected to increase by 711,900, or 26 percent.
But beyond that, the top 10 list of fast-growing occupations mainly includes jobs that pay much less. Those include retail salespeople, home health aides and personal care aides. All of those jobs pay around $20,000 a year.
Ashworth, the Capital Economics economist, notes that many of the jobs that have seen the briskest U.S. growth can’t be done elsewhere because they require a physical presence. But he notes that many of those jobs, in fields such as health care and food service, also aren’t highly skilled.
“We’re talking about people who help out in nursing homes,” he said. “Those jobs do tend to be poorly paid and, of course, the benefits coverage is much lower.”
If the economy does pick up and more jobs start being added, Ashworth expects that workers will have more power to ask for better wages and benefits. But it’s not clear how long that will take.