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Welcome To The McJobs Recovery. Do You Want Fries With That?


Naomi Klein in 2000, talking about attempts to organize McDonald's workers.

I know a lot of media people read our site, so I wonder why they seem so oblivious to the ongoing economic pain suffered by so many through this recession. Do they know how clueless they sound? The middle class is being systematically hollowed out of our country, pushing people to the margins and leaving nothing but the economic extremes. From Andy Kroll at TomDispatch:

Think of it as a parable for these grim economic times. On April 19th, McDonald's launched its first-ever national hiring day, signing up 62,000 new workers at stores throughout the country. For some context, that's more jobs created by one company in a single day than the net job creation of the entire U.S. economy in 2009. And if that boggles the mind, consider how many workers applied to local McDonald's franchises that day and left empty-handed: 938,000 of them. With a 6.2% acceptance rate in its spring hiring blitz, McDonald’s was more selective than the Princeton, Stanford, or Yale University admission offices.

It shouldn’t be surprising that a million souls flocked to McDonald's hoping for a steady paycheck, when nearly 14 million Americans are out of work and nearly a million more are too discouraged even to look for a job. At this point, it apparently made no difference to them that the fast-food industry pays some of the lowest wages around: on average, $8.89 an hour, or barely half the $15.95 hourly average across all American industries.

On an annual basis, the average fast-food worker takes home $20,800, less than half the national average of $43,400. McDonald's appears to pay even worse, at least with its newest hires. In the press release for its national hiring day, the multi-billion-dollar company said it would spend $518 million on the newest round of hires, or $8,354 a head. Hence the Oxford English Dictionary’s definition of "McJob" as "a low-paying job that requires little skill and provides little opportunity for advancement."

Of course, if you read only the headlines, you might think that the jobs picture was improving. The economy added 1.3 million private-sector jobs between February 2010 and January 2011, and the headline unemployment rate edged downward, from 9.8% to 8.8%, between November of last year and March. It inched upwardin April, to 9%, but tempering that increase was the news that the economy added 244,000 jobs last month (not including those 62,000 McJobs), beating economists' expectations.

Under this somewhat sunnier news, however, runs a far darker undercurrent. Yes, jobs are being created, but what kinds of jobs paying what kinds of wages? Can those jobs sustain a modest lifestyle and pay the bills? Or are we living through a McJobs recovery?

The evidence points to the latter. According to a recent analysis by the National Employment Law Project (NELP), the biggest growth in private-sector job creation in the past year occurred in positions in the low-wage retail, administrative, and food service sectors of the economy. While 23% of the jobs lost in the Great Recession that followed the economic meltdown of 2008 were “low-wage” (those paying $9-$13 an hour), 49% of new jobs added in the sluggish “recovery” are in those same low-wage industries. On the other end of the spectrum, 40% of the jobs lost paid high wages ($19-$31 an hour), while a mere 14% of new jobs pay similarly high wages.As a point of comparison, that's much worse than in the recession of 2001 after the high-tech bubble burst. Then, higher wage jobs made up almost a third of all new jobs in the first year after the crisis.

The hardest hit industries in terms of employment now are finance, manufacturing, and especially construction, which was decimated when the housing bubble burst in 2007 and has yet to recover. Meanwhile, NELP found that hiring for temporary administrative and waste-management jobs, health-care jobs, and of course those fast-food restaurants has surged.

Indeed in 2010, one in four jobs added by private employers was a temporary job, which usually provides workers with few benefits and even less job security. It's not surprising that employers would first rely on temporary hires as they regained their footing after a colossal financial crisis. But this time around, companies have taken on temp workers in far greater numbers than after previous downturns. Where 26% of hires in 2010 were temporary, the figure was 11% after the early-1990s recession and only 7% after the downturn of 2001.As many labor economists have begun to point out, we're witnessing an increasing polarization of the U.S. economy over the past three decades. More and more, we're seeing labor growth largely at opposite ends of the skills-and-wages spectrum -- among, that is, the best and the worst kinds of jobs.



I don't know how administration officials can really believe that unemployment is structural -- that is, some industries have reached new levels of productivity and simply don't need as many workers -- because if that were true, we'd see a healthy recovery in other sectors, and we don't. No, the real problem is that corporations have used this recession as an excuse for massive layoffs, and holding that threat over remaining workers to keep wages low and work loads high:

There are two problems with the jobs recovery: Employers haven’t added enough jobs. And those they have added aren’t particularly good ones.

The former problem has gotten a lot of attention, with many economists and politicians talking about job growth averaging less than 100,000 a month last year, not enough to keep up with population growth or make a significant dent in unemployment.

But experts say the low-wage jobs that have been added are also a serious problem — putting downward pressure on wages and keeping consumer spending in check.

“Growth has been concentrated in mid-wage and lower-wage industries. By contrast, higher-wage industries showed weak growth and even net losses,” said Annette Bernhardt, policy co-director for the National Employment Project. She said that growth has been far more unbalanced than during previous job recoveries.

Bernhardt’s analysis of the first seven months of job growth in 2010 found that 76 percent of jobs created were in low- to mid-wage industries — those earning between $8.92 to $15 an hour, on average, well below the national average hourly wage of $22.60 in 2010.

She said a preliminary analysis of full-year results suggests the same trend is still holding true, although she cautioned that final employment figures are needed.

But the biggest problem is continued job losses in higher-wage industries severely hit by the bursting of the housing bubble — construction and financial services. Recoveries in those sectors helped lead the economy out of earlier downturns, but they’re still suffering more than a year and a half after the official end of the Great Recession.



How are people supposed to take care of their families on month-to-month contract jobs - and why doesn't anyone seem to care?

Companies have hired more temps for four straight months. Yet they remain reluctant to make permanent hires because of doubts about the recovery's durability.

Even companies that are boosting production seem inclined to get by with their existing workers, plus temporary staff if necessary.

"I think temporary hiring is less useful a signal than it used to be," says John Silvia, chief economist at Wells Fargo. "Companies aren't testing the waters by turning to temporary firms. They just want part-time workers."

The reasons vary. But economists and business people say the main obstacle is that employers lack confidence that the economic rebound has staying power. Many fear their sales and the overall economy will remain weak or even falter as consumers spend cautiously.

Companies also worry about higher costs related to taxes or health care measures being weighed by Congress and statehouses. That's what Chris DeCapua, owner of employment firm Dawson Careers in Columbus, Ohio, is hearing from clients.

DeCapua says corporate demand for temporary workers has surged. That's especially true for manufacturing-related jobs involving driving forklifts, assembling products, packing merchandise and loading it on trucks.

Yet that demand hasn't spilled over into a demand for permanent workers. And DeCapua doesn't see it turning around anytime soon.



Let's see: No new jobs, benefit extensions screwed up and Christmas is coming. You'd think the administration and Congress would be doing something about this, but you'd have better luck asking Underdog:

Nov. 19 (Bloomberg) -- The number of Americans filing claims for unemployment benefits held at a 10-month low last week, a sign firings are letting up as the economy recovers.

Initial jobless claims were unchanged at 505,000 in the week ended Nov. 14, in line with the median forecast of economists surveyed by Bloomberg News, Labor Department figures showed today in Washington. The number of people collecting unemployment insurance dropped in the prior week, while those getting extended payments jumped.

The loss of 7.3 million jobs since the recession began in December 2007, the biggest drop of any postwar economic slump, makes an acceleration in firings less likely as consumers begin to spend. A rebound in hiring may take longer to develop as companies have ample room to boost hours for current employees before taking on additional staff.

“The labor market is improving, but at a glacial pace,” said Tom Porcelli, a senior economist at RBC Capital Markets in New York, who had forecast claims would fall to 503,000. “People are having a hard time finding a job as companies remain wary of the economic recovery. We expect it will be a jobless recovery.”



Hundreds of Thousands About to Lose Unemployment Benefits

I've sent out more than a hundred resumes since last year, and I've gotten exactly one callback. And it's not as if I'm being fussy, either. Yeah, it's pretty ugly out there:

WASHINGTON - In the coming weeks and months, hundreds of thousands of jobless Americans will exhaust their unemployment benefits, just when it's never been harder to find a job.

Congress extended unemployment aid twice last year, allowing people to draw a total of up to 59 weeks of benefits. Now, as the recession drags on, a rolling wave of people who were laid off early last year will lose them.

Precise figures are hard to determine, but Wayne Vroman, an economist at the Urban Institute, estimates that up to 700,000 people could exhaust their extended benefits by the second half of this year.

Some will find new jobs, but prospects will be grim: Layoffs are projected to go on, and many economists expect the jobless rate, already at 8.5 percent, to hit 10 percent by year's end.

"It's going to be a monstrous problem," Vroman said.

U.S. employers shed 663,000 jobs in March, and the jobless rate now stands at its highest in a quarter-century. Since the recession began in December 2007, a net total of 5.1 million jobs have disappeared.

Those who know that their unemployment aid is about to run out are counting the days, taking on odd jobs, moving in with relatives and fretting about the future.

"My biggest fear is we'll lose the house," said Hernan Alvarez, 54, an Orlando, Fla., construction worker who lost his job in July and whose benefits will end in four weeks. "The only thing I can do is keep looking for work and hope tomorrow will be better than today."

That so many people have remained on jobless aid for more than a year underscores the depth and duration of the recession, which began in December 2007. If the downturn extends into May, it will be the longest recession since the Great Depression.

Problem could get worse

The jobs crisis it has created has proved worse than most economists forecast — not to mention what lawmakers expected when they extended jobless benefits last year.

In March, nearly a quarter of the unemployed had been without work for six months or more, the highest proportion since the 1981-82 recession.

And the problem will probably get even worse. Employers typically remain reluctant to hire even months after a recession has officially ended. In the 1990-91 and 2001 recessions, the jobless rate peaked more than a year after the recovery began.

"What comes next, I'm afraid, will be the mother of all jobless recoveries," said Bernard Baumohl, chief global economist at the Economic Outlook Group, a consulting firm. "While we may emerge from recession from a statistical standpoint later this year, most Americans will be hard-pressed to tell the difference between a recession and a recovery the next 12 months."



Mike's Blog Round Up

Liberal Oasis: Alito blogging 24/7...here, here, and here, and there's much more.

ReddHedd has a wrap from Tuesday. Talk left looks through it as well.

Norbizness: Another edition of "The Left"

Daniel Gross: For the American worker, this jobless recovery has also been “wageless” -- characterized by an extraordinary stagnation in real wages

Talk To Action: Why the Religious Right loves the Imperial Presidency

ZenPundit: The Darwin Awards...a rare moment of ZenPundit levity

Daniel Gross: For the American worker, this jobless recovery has also been “wageless” -- characterized by an extraordinary stagnation in real wages

Talk To Action: Why the Religious Right loves the Imperial Presidency

ZenPundit: The Darwin Awards...a rare moment of ZenPundit levity



Will 'The Hammer' Get Nailed?

TIME Mar. 21, 2005

The G.O.P. leader's troubles mount, with new questions about his dealings with the former aide who helped build his political machine. Read on...

Just as new scandals concerning alleged ethical violations by DeLay (R-TX) and other Members have erupted in recent days, the House Ethics Committee has become virtually powerless. The reason? Rules passed by the GOP congress at the beginning of 2005 make it virtually impossible for the Committee to launch any investigation of unethical conduct. But you can help to resolve the gridlock in the Ethics Committee: click here     [thnx to Dabobbo

Oy... Matthew Yglesias

As I just IMed to a colleague, someday when I'm powerful and important, I'll write my chilling expose about how little journalists understand about the issues they write about. Until then, you'll have to read U.S. News and World Report's thoughts on the labor market:

Breathe easy, workers: The jobless recovery is indisputably over. Some 262,000 new jobs were created last month, with almost every sector of the economy contributing, including manufacturing. That's icing on the cake after January, when the U.S. labor market at long last recouped all of its losses from the 2001 recession. There are now about 300,000 more people working than in February 2001, the pre-recession peak.

This is a bit like John Kerry taking solace in the fact that he's the second-highest all-time vote getter in an American presidential election. The American population grows at around 0.9 percent each year -- that means we've got something like 9 or 10 million more people than we had in February 2001 chasing the additional 300,000 jobs. click here