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Not all jobs are equal

Op-Ed

A lower unemployment rate isn't enough. Americans need work that pays the bills.

January 24, 2012|By Jonathan Tasini
(Jewel Samad / AFP / Getty…)

Politicians bickering over private equity's impact on jobs and how to bring down the high unemployment rate are entirely missing the point about the crisis facing working Americans. The predicament we face isn't simply that there are too few jobs; it's also that an increasing number of workers don't have the kind of job that can pay the bills.

While productivity has grown by more than 80% over the last 30 years, wages have effectively been flat for 80% of Americans. So, although we're making stuff faster and more efficiently, the benefits of that hard work have not trickled into the pockets of the people who do it.

Let's turn first to the intensifying debate over Mitt Romney's role as a private equity manager. It's of course ludicrous that Newt Gingrich and Rick Perry — two veteran advocates of a vehemently anti-union, free-market agenda that laid the foundation for the newly coined "vulture capitalism" — condemned those principles while campaigning in New Hampshire and South Carolina.

But equally absurd is Romney's defense that, at the end of the day, his company, Bain Capital, created more jobs than it destroyed. Even if he's telling the truth by some measures, the fact is that private equity buyouts often enrich those who arrange them by sharp cost-cutting, including dismantling pay and benefits for most of the workers who remain or new hires who join the more "efficient" enterprise. It's simple math: To service the huge debt taken on in virtually every buyout, workers take cuts. And the new jobs aren't necessarily a path to the American dream.

Take Staples, which Romney trumpets as one of his successes. The company certainly pays some of its employees well: Staples Chairman and Chief Executive Ronald L. Sargent received a total pay package of more than $15 million in 2010. But jobs in retail — one of the fastest-growing job sectors in recent decades — tend to pay poorly, and Staples jobs don't seem to be an exception to that rule.

Although the company doesn't publish its wage scale, the website glassdoor.com, which allows workers to post their salaries anonymously to try to give a picture of wages at a company, suggests that the average Staples sales associate or EasyTech associate makes less than $9 an hour. An employee working a 40-hour week, 52 weeks a year at that rate would make significantly less than the 2010 federal poverty level threshold for a family of four of $22,314. So, although Romney likes to claim credit for creating jobs, he needs to be asked how many of those jobs were ones that allowed employees to make ends meet.

And even that question doesn't get at another issue: the number of jobs that were lost as the growth of Staples and similar companies drove mom-and-pop stationery shops and office supply stores across the country out of business.

Republicans, though, aren't alone in muddying the waters. A few days ago, the president held a political photo op, praising several companies for bringing back jobs from overseas: so-called in-sourcing. But he did not address two ugly truths — and the uninformed, lazy news media did not demand he do so.

First, companies are coming back to the United States because wages here are dropping, in real terms. At the same time, lower-wage corporate nirvanas such as China are no longer as cheap an alternative as they once were, partly because the sea of people who worked for next to nothing for so long have had enough and are rising up in protest.

Second, most of the jobs coming back are not high-wage, union jobs with full healthcare and pensions. In fact, with concerted efforts by Republican governors in the Midwest to eviscerate union rights, times have never been better for corporate leaders seeking to lower labor costs. With labor costs in the U.S. dropping relative to those in the Third World, the president's offer of tax incentives to other companies that in-source is unnecessary. As Citizens for Tax Justice points out, using a 2007 Bush administration study, corporations based in the United States already have plenty of tax incentive to locate here because "the United States takes a below-average share of corporate income in taxes compared to other developed countries."

Recent conventional wisdom holds that the president's reelection chances may have slightly improved because the unemployment rate has inched down to 8.5%. But that is a deceptive number. The true unemployment rate is over 15% if you include what the Department of Labor calls "all persons marginally attached to the labor force, plus total employed part time for economic reasons." In English, that translates into people who want to work but are not looking right now along with people who don't have full-time work, many of whom would like to.

If you add those people to the people who have full-time work at or just above the minimum wage, at least 1 in 5 Americans — 30 million people — does not have a decent job. Which explains why, according to the Census Bureau, 46 million people — or about 15% of Americans — live in poverty, the highest percentage since 1993.

There is a serious discussion we need to have about American jobs that takes into account not just the quantity but also the quality. But that isn't a conversation leaders of either party are interested in having.

We need to face up to the reality that the free-market economic principles that have been promoted for decades are an abject failure, at least if you measure success by whether people who work hard can support their families and make ends meet.

Jonathan Tasini, an economic and political analyst, tweets @jonathantasini.

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