It’s been more than four years since the Great Recession ended in June 2009. The jobless rate has fallen to 7.4% (from a 10% peak in October ’09), but that’s largely because many people have stopped looking for work. Payrolls have expanded by 7.3 million, well short of the 8.7 million jobs lost in the recession.
“It is a very weak job market,” says Dean Baker, co-director of the Center for Economic and Policy Research. “We have fewer jobs [and] people are taking worse jobs.”
Indeed, jobs paying wages in the lowest quintile account for nearly 30 percent of the jobs created since the recession, according to economists at Wells Fargo. More recently low-wage jobs have grown at a 2.7% annual rate -- more than twice the 1.3% growth rate of high-wage jobs, according to UBS economist Maury Harris.
Baker compared the percentage growth of new jobs in the restaurant and hotel sectors to the unemployment rates in individual states and found that the states with the highest jobless rates have a larger share of low-paying jobs. “The two go hand-in-hand,” says Baker. “Because the economy is not creating a lot of jobs, you end up seeing people taking bad jobs who wouldn’t otherwise take them.”
This Friday, the government will release the August employment report. The median forecast among economists surveyed by Bloomberg calls for payroll growth of 180,000 following the 162,000 jump in July and an unemployment rate of 7.4%, the same as in July.
Baker is more pessimistic. He expects payrolls will grow by only 130,000 to 140,000 and suggests the U.S. follow the lead of Japan, providing more government stimulus to generate economic growth and jobs. Japan has had “very robust growth” and its unemployment rate has fallen to 3.8% -- the lowest in almost five years, says Baker. “It’s a very good story for them. It would be nice if we could follow that here.”
The U.S. government did fund a s$787 billion stimulus program in 2009 and 2010 but “needed about three times that to replace the amount of demand lost when the housing bubble burst,” says Baker.
Meanwhile, some low paid workers are losing patience with their job situation. Last Thursday fast food workers in 60 cities across the country staged a one-day strike demanding $15 an hour and the opportunity to form a union without retaliation from their employers.
And today Walmart workers and supporters plan to protest in fifteen cities, demanding a minimum salary of $25,000 a year and the rehiring of about 20 workers who were fired following a June strike.
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