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What the jobful get...

by afew Thu Dec 6th, 2007 at 04:28:55 AM EST

(This is the third part of a survey of US employment. The first was Where the jobless go..., the second, How the jobs are counted...)

Stripping out student part-time jobs may seem like cherry-picking, but it is a reminder that any small job adds to the employment level, even one hour of paid work in the week referenced in the survey. An economy that creates a lot of short-hour part-time employment will look a lot better in the labour stats than one that doesn't. So, the Netherlands, with 45 % part-time jobs in total employment 15-64 (Eurostat), has been considered a "miracle" economy. No doubt there are employees happy with part-time work, but in general it fits with the flexibility sought for by employers.

At least, it's the type of flexibility chosen when the employer must pay a minimum wage, plus social contributions. Another type of flexibility (one many employers would no doubt find preferable) is to have people work full time at low hourly rates. It's been said (and denied) that the US employment numbers look good thanks to "Macjobs" -- low-paid waitressing and burger-flipping. In fact low hourly rates are more prevalent in the US economy than that narrow "Macjob" frame suggests.


The US has a federal minimum wage : $5.15 per hour. The US Bureau of Labor Statistics gives an annual count of jobs that are paid at and under this low hourly rate. They mostly concern young, particularly female, workers in part-time employment, but in the aggregate they amount to nearly 2 million jobs. (Note that these jobs can't be added to the student part-time jobs counted in How the jobs are counted..., since there's probably a considerable overlap between the two).

And this rate, that is not even fully applied across the country, is low and rarely updated. In PPP with the euro in France that is €4.95, or with the pound in Britain £3.60. (Current minimum wages in these two countries are €8.44 and £5.52, though the UK applies lower rates, £3.40 for 16-17, and £4.60 for 18-21-year-olds.)

Of course this is debatable. A low minimum incites employers to give teenagers jobs. But
  • isn't this just a handy way of obtaining better employment numbers with crappy little jobs?
  • this is race-to-the-bottom logic: why bother with a minimum wage at all? Leave it to the market; and let the poorest and weakest compete for lower and lower pay.

Hourly Earnings from the BLS

The US Bureau of Labor Statistics annually compiles estimates of hourly pay (Occupational Employment Statistics) for all occupations across all industries (farming and self-employed not included). The 2006 data published this year are available in a large .xls file. The job count of 133 million covers some 800 occupations across these 20 sectors of activity:

OES Overview

11     Logging (1133), support activities for crop production (1151), and support activities for animal production (1152) only.
21     Mining
22     Utilities
23     Construction
31-33 Manufacturing
42     Wholesale trade
44-45 Retail trade
48-49 Transportation and warehousing
51     Information
52     Finance and insuarance
53     Real estate and rental and leasing
54     Professional, scientific, and technical services
55     Management of companies and enterprises
56     Administrative and support and waste management and remediation services
61     Educational services
62     Healthcare and social assistance
71     Arts, entertainment, and recreation
72     Accomodation and food services
81     Other Services (except Federal, State, and Local Government)
99     Federal, State, and Local Government (OES designation)

The interest of these extremely detailed data lies, not in the calculation of a mean hourly rate (and a theoretical annual salary) for each occupation, but in the supply of the tenth, twenty-fifth, fiftieth, and seventy-fifth percentiles. That is, the upper limit of the first decile, or lowest-income 10%, then the first quartile (lowest 25%), the median (half the hourly rates below it, half above), and the third quartile (up to 75%). The percentiles allow us to look at income distribution, which the mean (average) does not.

The OES says this of the data:

Frequently Asked Questions

The OES program is the only comprehensive source of regularly produced occupational employment and wage rate information for the U.S. economy...
<...> These data inform the so-called "good-jobs/bad-jobs" debate on how business cycles and structural economic change impact wages and employment across the range of occupations; and how many and what types of jobs are impacted by off-shore outsourcing. <...>

The OES says in an accompanying file :

Wages for the OES survey are straight-time, gross pay, exclusive of premium pay.

What surprised me, browsing through the file, was the contrast between the mean hourly rates (fairly comfortable), and the skimpy look of the first decile in many instances, and even the quartile or median in some. Apparently one-tenth, or one-quarter, or even half the wage/salary earners in some occupations (even entire industries) were badly paid: above the federal minimum, but badly-paid all the same (those paid at or below the federal minimum would be "hidden" at the bottom of the first decile).

I wondered how many of these hourly rates would be legal in the UK or France. (Note to those who ask for more countries to be included in these comparisons: that's fine by me, but it's already a fair task taking three. Perhaps someone else will feel inspired to work on this, or we'll have to wait until I do... ;)). The data are from May 2006. The British minimum wage was then £5.05, in PPP $7.18. In France the SMIC (minimum wage) was €8.03, in PPP $8.35. It was clear that, applying the British minimum already, whole slices of hourly wages in the OES were beneath what a worker in the UK could expect. But the data don't come with age groups, and the UK having three age group definitions of the minimum wage, there was no way of reaching a clear-cut breakdown of the figures.

Comparison with French Minimum

Sorting the first decile on the basis of $8.35, out come immediately eight industries that pay less than that to the lowest-paid 10% of all their workers across the board :

  • Agriculture, Forestry, Fishing, and Hunting (but see above for limits)
  • Retail Trade
  • Real Estate and Rental and Leasing
  • Administrative and Support and Waste Management and Remediation Services
  • Health Care and Social Assistance
  • Arts, Entertainment, and Recreation
  • Accommodation and Food Service
  • Other Services (except Public Administration)

Of these, Agriculture (note again that actual farm workers, a group one would expect to be low-paid except for the very highly-skilled, are not included), the Retail Trade, Arts, Entertainment, and Recreation (!), and Accommodation and Food Service (less surprising), show the entire first quartile beneath $8.35. And you need to get past the median in Accommodation and Food Services to get paid at or above the level of the French minimum wage. That is, (since the median is at $8.00 and the 75th percentile only at $10.37), maybe 55% to 60% of the 11 million workers in that sector don't get paid the minimum for France. Here's the count of workers paid less than $8.35 in those eight industries (note that these levels are an understatement of the reality, since in many cases the $8.35 limit may be situated anywhere between the 10th and the 25th percentile or even beyond the 50th, as we have seen) :

Agriculture etc94 923
Retail Trade3 879 070
Real Estate214 870
Administrative and Support835 018
Health Care and Social1 558 667
Arts, Entertainment466 733
Accommodation and Food5 524 500
Other Services383 310
Subtotal12 957 090

After this, in the other industries, it's down to an occupation-by-occupation count within each sector. It should be noted that each industry has its specific service employees, such as waitresses, cleaners, child care personnel, grounds maintenance workers, drivers, etc, and not surprisingly they figure among the low-paid. Here is the breakdown of numbers of employees paid under $8.35 in the twelve other industries :

Fed State Local admin260 368
Educational services472 955
Management35 536
Prof, Sci, Tech services154 714
Finance112 346
Information163 579
Transportation156 267
Wholesale276 784
Manufacturing555 127
Construction210 117
Utilities4 549
Mining8 064
Subtotal2 410 402

This brings us to a total of:

Eight industries12 957 090
Twelve industries 2 410 402
Total15 367 492

In percentage terms, that's 11.5 % of the 133 million wage/salary earners in the survey.

Once again, there are numbers missing because they are not surveyed (farm workers) or because they are hidden in the lower reaches of the next decile or quartile up. So, at the least, 11.5% of American wage/salaried workers are paid less than the French minimum hourly rate.

What Does It Mean? And What Does It Matter?

This is an arbitrary line drawn from outside across American wage statistics. Certainly, but American financial capitalism and its theorist-soldiers have been drawing arbitrary lines all over other nations' economies for years now, so this is just a tiny little get-your-own-back attempt. OK, but it's not meaningful! Well, one thing it does is show that you really shouldn't compare apples with oranges. French employment isn't the same fruit as American employment. Who cares? What people want is jobs, you elitist shit! Do they? They want jobs that force them to work long hours all year round just to keep their head above water, and maybe not even that?

The OES data offer a mean annual salary for each occupation (and each industry). It doesn't look so bad. For instance, in the Accommodation and Food Services industry, the mean annual salary indicated is $19, 650. Not much, but almost double the federal poverty threshold for one person in 2006, $10, 294. (That's an absolute level, linked to the CPI and not to the general standard of living in the country, and it's for one unrelated person only).

But the mean annual salary in the OES data is derived from the mean hourly rate, which, in the case of the occupations with low rates at the bottom of the distribution, is closer to the 75th percentile than to the median, meaning that the very best hourly rates at the top of the distribution pull the mean upwards. In Accommodation and Food Services, where the median is $8.00, the mean is $9.45, the 75th percentile $10.37. And the mean annual salary is obtained by multiplying the hourly mean rate by 2,080 annual hours. If you're in the bottom half of the distribution, the best you can hope for in annual salary is $16, 640; in the bottom quarter, $14, 144; in the bottom 10%, $12, 521.

That is, if you work 40 hours a week 52 weeks a year (40 x 52 = 2, 080).

That annual mean salary calculation is a fiction, of course. People earning these low hourly rates are probably working whatever hours they can get, which may mean more than 2, 080 a year. It may mean working more than one job (the BLS counts 7.5 million persons running two jobs or more). Or it may mean not getting the hours and being one of the 7 to 8 million working poor.

And this is not limited to waitresses and burger-flippers. The OES data show it concerns many different occupations and sectors of activity, right across the board. Fifteen and a half million workers at the minimum, to judge by the crude arbitrary line I drew.

But whether people really want jobs in these conditions or are simply forced to take them isn't really within my focus. I'm trying to examine what's in the "full employment economy" tag of countries like the UK and the US. What's in the way the statistics are constructed, and finally, what's in the employment. The statisticians are no doubt rigorous and honest, but the concepts and rules they work with produce indicators that are insufficiently informative or misleading, and that are distorted by social developments politicians studiously ignore, at least insofar as they impact the main indicators. As to what counts as good-number-boosting "employment", the very low pay in the bottom deciles we've seen evidence of here makes me think that, if this is what's meant by creating jobs, any fool can do it.

Summary

In Where the jobless go... I looked at distortion of the US unemployment rate by

  • high sickness/disability numbers
  • high military/prison population

My conclusion was that these accounted for several points (hard to evaluate) missing from the unemployment rate.

In How the jobs are counted... I looked rather at the employment rate, more and more often used as a more solid indicator than the unemployment rate. This indicator too is open to distortion in the marginal young and old groups. Later retirement in the US tends to support the employment rate, earlier retirement in the UK and above all France, reduces it. Special early retirement schemes hide unemployment among the over-55s in France.

Youth figures are very considerably distorted by the cultural habit (or economic necessity) of student part-time jobs.

In this diary, I looked at hourly rates of pay in the US, finding that a large percentage of wage-earners are paid less than mandatory levels in other countries (UK and France again), and indeed at levels that cannot fairly be thought consonant with "earning one's living".

We have already concluded here at ET that comparisons between countries, based on the unemployment or the employment rate, are unlikely to be rigorous or useful. As for using the US employment situation as an object lesson for other countries that are told to consider the American model as the best and only way : the distance is great between the hype and the reality.

Previous Labour Market Diaries

What's really wrong with the Eurozone labour market? by Colman June 2005

The Party line by Jerome a Paris Aug 2005

Comparing unemployment statistics by Colman Sep 2005

OECD says ET was right about UK unemployment by afew Oct 2005

European Unemployment by TGeraghty Nov 2005

Youth unemployment by Jerome a Paris Jan 2006

Graphic statistics by Alexandra in WMass Jan 2006

More employment statistics by Jerome a Paris Jan 2006

The Inverted Example of Spinning Jobless Statistics by DoDo Feb 2006

Actual facts about the French labor market by Jerome a Paris March 2006

European Employment: Some Good News by TGeraghty Sep 2006

What's unemployment, again? by Jerome a Paris Jan 2007

Fascinating employment and unemployment numbers by Jerome a Paris Feb 2007

CS Monitor: stats are only good when they suit us by nicta March 2007

Soundbite Statistics : the Unemployment Rate by afew June 2007

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Thanks a lot for this excellent diary, Afew!

So, we need another diary on Purchasing Power Parity...

"Dieu se rit des hommes qui se plaignent des conséquences alors qu'ils en chérissent les causes" Jacques-Bénigne Bossuet

by Melanchthon on Thu Dec 6th, 2007 at 03:31:29 AM EST
Trust you. So who's going to do that one?

(Could it be a Pandora's box?)

by afew (afew(a in a circle)eurotrib_dot_com) on Thu Dec 6th, 2007 at 11:59:51 AM EST
[ Parent ]
People don't want jobs, they want money.

Un roi sans divertissement est un homme plein de misères
by linca (antonin POINT lucas AROBASE gmail.com) on Thu Dec 6th, 2007 at 04:46:17 AM EST
I am not so sure about this. Jobs also give meaning and some sense of respect to someones life, the feeling to be useful, of sustaining yourself, and also simply act as a source of social contacts many unemployed people miss dearly. When given the choice between benefits and a only slightly better paying job, a surprising amount of people want the job.

For a given GDP and income distribution, I think it is healthier to have it produced by all people together than by a subset with redistribution. Not because it is economically more efficient ( although it probably is), but because having a paid and useful job is valauble in itself.

Of course, this is probably the result of ages of indoctrination that only having a job makes you a worthy memmber of society, and only paid work is worthy of respect. But on the other hand, if there is useful and respectworthy worked outside of jobs, it is not unreasonable to pay for it.

by GreatZamfir on Thu Dec 6th, 2007 at 05:48:27 AM EST
[ Parent ]
The thing is, whereas that might be true of some stable, long term jobs, even "paid employment" as a source of socialisation is being destroyed. Precarity means moving from job to job, never really staying somewhere for a very long time ; it makes it hard to invest oneself in social relations there. Iterim workers are often shunned by those with more permanent employment.

Also, the way the work environment is now more and more designed, with competition between workers, makes friends at work an harder thing to establish.

And our societies are of course weaning people out of the techniques for social linking out of employment. Only when people are forced together, such as in schools or companies, they can form social bonds ; unlike in nearly all others society where one knew lot of people in the community... Individualism means not knowing one's neighbours.

The concept that socialisation has to be linked to a business relationships is a great victory for business relationships, not for socialisation...

Also, the insistence that everyone should have jobs, on what are essentially the employers' terms, give those great powers. For example, they can refuse to let people find other balances between work and the rest of time available. Which is one of the main reasons there are so many jobless...

Un roi sans divertissement est un homme plein de misères

by linca (antonin POINT lucas AROBASE gmail.com) on Thu Dec 6th, 2007 at 07:37:17 AM EST
[ Parent ]
The concept that socialisation has to be linked to a business relationships is a great victory for business relationships, not for socialisation...

Yup. Sig line?

by afew (afew(a in a circle)eurotrib_dot_com) on Thu Dec 6th, 2007 at 11:57:56 AM EST
[ Parent ]
Since reading this book one year ago about the way work was valued and considered over time, I've been meaning to diary about it. Procrastination has impeded me, though.

The book, Le travail, une valeur en voie de disparition, describes the evolution of philosophical and moral approaches to work over time. How it was disregarded by the greeks, etc...

The three important aspects of work being alienation because of its forced, repetitive aspects ; personal development through the necessity of acting on reality ; and involvement in the social world through the collective aspects of employment. Although well managed companies try to develop and make the latter two aspects of work seem important to induce qualified worker retention, it is hard to hide they only want labour, not people, and thus I feel the first aspect is still the most striking...

Un roi sans divertissement est un homme plein de misères

by linca (antonin POINT lucas AROBASE gmail.com) on Fri Dec 7th, 2007 at 06:17:07 AM EST
[ Parent ]
Linca,
Do you know if it's available in English? I looked at Amazon, but couldn't figure it out.
Would like to read it.


Capitalism searches out the darkest corners of human potential, and mainlines them.
by geezer in Paris (risico at wanadoo(flypoop)fr) on Fri Dec 7th, 2007 at 08:22:34 AM EST
[ Parent ]
It's available in Spanish possibly...

It also seems she has written an English language, journal article version, but it's not free access (maybe ManFromMidleTown would have access? why can social scientists learn about Arxiv?). Maybe you can obtain it from her...

Un roi sans divertissement est un homme plein de misères

by linca (antonin POINT lucas AROBASE gmail.com) on Fri Dec 7th, 2007 at 08:52:25 AM EST
[ Parent ]
I think there's some truth in what you say, but it has become a truism that a job gives a person a sense of belonging, and usefulness, and value. I think linca has replied ably to that.

Your main remaining point, to me, is: people will go for jobs if they get more than in social benefits. In America, benefits were slashed in the '90s so that people were forced to take jobs at wages they can't possibly approve of. I don't think people get a sense of value out of being forced to accept low wages. Or rather, the sense of their own worth they get is a low one. (No better than on redistributed income, you might reply -- but on benefit their time is their own).

And my main point above, of course, (measly and unfeeling as it may be), is that creating shitty jobs (unstable, short part-time, low-wage slavery) fixes a nation's labour figures just fine.

by afew (afew(a in a circle)eurotrib_dot_com) on Thu Dec 6th, 2007 at 11:56:43 AM EST
[ Parent ]
I've noticed one aspect of job-related gratification over my career. When the business is new - and especially when the field of endeavor is new - it is exciting and fulfilling to go to work. I say that from work "on the floor" to technical staff to management.

It's all downside, when the market matures, for everyone but the accountants, lawyers, and "human resource" people. At that point they get to be creative about how they redirect, or 'reorganize', the company.

As for the low-end jobs, it is a disgrace for a nation to call that 'employment'.

paul spencer

by paul spencer (spencerinthegorge AT yahoo DOT com) on Thu Dec 6th, 2007 at 08:06:11 PM EST
[ Parent ]
i am an employer in the us. try and get someone to work for 5.15 an hour.
forget it.

starting wage for anyone who actually shows up every day is around 10/hour\

my daughter who is totally unskilled recently looked for work; got three job offers within 10 days, starting at around 8.50 with raises after 3 months

so - at least where i live - in  the rust belt - there are alot of low paying jobs.  but realistically, no one works for minimum wage. if that is what you offer, you get applicants that have serious problems.  not to say we  dont need to find a place for those people. but they are not "mainstream" people that can read, write and show up every day.

my employees start at about $12/hour and we have a hard time finding people. some of them cannot read particularly well, but they work.  this economy is a jobs machine.
\
our task as a policy matter is to create better jobs. but you are way off base if you think alot of reliable people are getting minimum wage. it is not so. even illegals won't work for that; and why should they. there is plenty of work.

talk to employers. it is impossible to find people at minimum wage that anyone would want to hire.  and employers don't expect to hire at that rate. even temp services have to pay more, and do. and they also often drive people to work.

by tomcunn (tomcunn@execpc.com) on Thu Dec 6th, 2007 at 10:20:51 PM EST
you are way off base if you think alot of reliable people are getting minimum wage

If you read what I wrote, you'll see that's not what I'm saying.

First of all, I'm looking at official statistics, not entering into considerations about the skills, reliability, and "employability" of different individuals. That's for employers to judge. I'm glad to hear your business starts people at $12 an hour.

As to the federal minimum of $5.15, I quote the BLS figures that show nearly 2 million workers are paid at or under that rate. I also noted a lot of youth, feminine, part-time work in there, so I was not making out the fed minimum was widespread.

But the main thrust of what I studied was the lower levels of pay in the OES survey - above the fed minimum, but still very low. There are all the same, whatever you say, at least 15 million jobs that pay under $8.35, according to the Bureau of Labor Statistics. And these jobs are not confined to one sector (farming isn't even included in the numbers), they are across the board, though mostly in service activities.

So - your local experience says one thing, but national statistics say another.

by afew (afew(a in a circle)eurotrib_dot_com) on Fri Dec 7th, 2007 at 01:56:26 AM EST
[ Parent ]
Any guesses as to why the national statistics are so much at odds with your personal experience? I too am originally from the rust belt, but, happily, a while ago, so my experience is out of date.

It's an interesting exercise to attempt to imagine managing a non-starvation existence on the real minimum wage, --or even on $10 an hour.

In 1960, fresh out of high school, I poured beer in a High street bar for more than the minimum wage.
 

Capitalism searches out the darkest corners of human potential, and mainlines them.

by geezer in Paris (risico at wanadoo(flypoop)fr) on Fri Dec 7th, 2007 at 08:35:20 AM EST
[ Parent ]
i do not know why the statistics are different; but they do not reflect common experience;  that is the problem for the left in the us.   the sytsem actually works pretty well for most people. jobs are abundant.  we can put up with precarite b/c anyone can find a job in a week. so the claim of the left that there are plutocrats and everyone else does not resonate. we are not all working for amalgamated spats.

the problem, is that it is a totally talent based economy. so their has emerged an underclass that is small, but not tiny; that group really does have problems getting and keeping work. for a whole variety of reasons that we cannot figure out; and we don;t know what to do about it.

by tomcunn (tomcunn@execpc.com) on Fri Dec 7th, 2007 at 10:25:34 AM EST


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