If you’re into quantity over quality, you’ll agree with the apparent consensus this morning that the just-released Labor Department JOLTS report was good news – and could put pressure on Federal Reserve chair Janet Yellen to raise interest rates at the central bank’s meeting this month, since it’s one of her favorite measures of labor market health. If you rank quality higher, you’ll have real doubts, for the new statistics on turnover in the labor force make clear that the American jobs market keeps morphing into an ever lower-wage jobs market.
Quantity-wise, the JOLTS report was indeed a winner, showing openings for a record 5.753 million employment opportunities in July – an all-time monthly high. But an unusually large share of these job openings came in anything but the kinds of positions any responsible parent would want their child to choose for a career. I can’t say that this is a record (that would take lots of numbers crunching) but fully 34.09 percent of the openings were in the low-wage sectors of retail, leisure and hospitality, and a low-paying sub-sector of the professional and business services category called administrative and support services. (See last month’s JOLTS postfor more info on this latter group of service jobs.)
But I can say that this low-wage share of the latest monthly job openings number (all the July data are preliminary) is higher than its June counterpart – which itself was revised upward from 32.79 percent to 33.14 percent. It’s higher than the level from a year ago (32.09 percent). It’s higher than its level when the current recovery technically began, in June, 2009 (29.48 percent). And it’s higher than where it was when the last recession began, in December, 2007 (30.46 percent).
I completely agree that for a great many reasons, any job is better than no job at all. But shouldn’t an advanced economy like America’s that’s more than six years into an economic recovery be creating better and better job opportunities for its population, not worse and worse?
The lone development that arguably could pass for good news in the JOLTS report is the dip in the share of job openings in the government-subsidized private sector – industries like healthcare services, where levels of demand and employment largely stem from politicians’ decisions, not market forces. Such openings represented 17.96 percent of all openings in July – down pretty significantly from an 18.82 percent June figure that itself was revised down from 18.86 percent.
Even better, this preliminary July figure is also lower than last July’s 18.11 percent, and way down from the 21.98 percent level it hit when the recovery began, and healthcare hiring was the only part of the jobs market showing any life at all. But the government-subsidized private sector generated only 17.74 percent of new job openings at the last recession’s December, 2007 onset, indicating that, again, six-plus years into a recovery, even on the quantity side, the “real” private sector still isn’t pulling the job-creation weight that a truly vibrant economy needs.
DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer