Job growth is coming from low-paying industries

The US economy is gaining workers, but many positions are part time or paying modest wages as the service sector picks up.

By Aimee Picchi Aug 5, 2013 1:15PM

Image: Couple ordering meal in restaurant © NULL/CorbisIn the battle for a stronger U.S. economy, does quality or quantity matter more? 


That's a question posed by this year's job growth, given that low-paying industries have accounted for 61% of the country's employment gains, The Associated Press reports, citing a Moody's analysis of Labor Department statistics.


Those industries, however, make up only 39% of overall jobs, which means that employment growth is predominantly coming from jobs with rock-bottom wages, such as restaurant and hotel workers.


"The jobs that are being created are not generating much income," Mizuho Securities USA chief economist Steven Ricchiuto wrote in a client note, according to The AP. 


Even worse, part-time work has contributed 77% of this year's job growth. With the Affordable Care Act going into effect in January, some employers such as Regal Entertainment Group (RGC) have cut back hours as a way to avoid the mandate to provide health care insurance. 


Unemployment is easing, but many of the gains have come via jobs that pay minimum wage or less, as in the case of waitstaff. Average earnings fell by 2 cents to $23.98 an hour, according to Friday's job report. 


That may be adding fuel to the push for a higher minimum wage, with congressional Democrats calling for a $10.10 baseline federal wage. Fast-food workers have recently organized walkouts in support for higher wages, and some researchers note that the country's current $7.25 minimum wage buys far less than it did in previous decades. 


The growth in low-paying jobs comes as the U.S. service sector saw a pickup in July. The pace was the fastest since February, the Institute for Supply Management said Monday.


While manufacturing and midlevel jobs can be shifted to lower-wage countries such as China or India, a McDonald's (MCD) crew member can't be automated. 


As John Canally, an economist with LPL Financial in Boston, told The AP, "You're getting jobs added, but they might not be the best-quality job."


Follow Aimee Picchi on Twitter at @aimeepicchi. 


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31Comments
Aug 5, 2013 1:46PM
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So after all the stimulus dollars borrowed and spent, and after all the money created out of thin air, most of the jobs that were created are just low-paying, crappy jobs.  And when presented with these pathetic results, the natural response from big government, Keynesian progressives is to raise the wages of these crappy jobs via a government mandate. Their idiocy knows no bounds.
Aug 5, 2013 2:03PM
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So we have created 222,000 full time jobs YTD so far, and 700,000, under 30 hour minimum wage jobs...   Big deal.

We continue to layoff more full time people than are hired.  The jobs report looks dismal the deeper you look into it.

Obamanomics...  FAILED...  
Aug 5, 2013 4:39PM
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I was wondering what jobs were created as in New York wages have dropped on a temporary level from $30/hr. to a miserly $15/hr.  Try living off of that and no relief in sight and worse no one cares about it. "let them eat cake"!  I am fed up, have two degrees and because "machines" have taken  over line in the Matrix, my career is over. I am trying to reinvent myself but at what cost.  What a way to live if you call it living. Life has gone from insecurity to no life at all and very soon, there will be a domino affect.  The house of cards will come tumbling down and no one to catch it.
Aug 5, 2013 1:35PM
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You do realize Aimee that the 1%er's don't eat at Micky D's or even Red Lobster?
Aug 5, 2013 8:13PM
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Fast food workers demanding higher wages? Fast food is already pushing into the prices for a good meal at a sit down restaurant.  Why would I go to McDonalds or Burger King when I can have Sizzlers. You push wages in fast food and you will drive them out of business.
Aug 5, 2013 2:29PM
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Brutus, DLH & Mirage are all correct. The $85 billion monthly Kool Aid has paid the rent and interest on the fake paper while doing NOTHING for those obligated to repay it. The only sensible thing left is to-- close the banks, end the Federal Reserve and to get RID of Wall Street. Anyone involved in these will need some de-programming and a black mold & cockroach infested trailer in some hot-land. Given the state of worldwide economics, I don't see anyone who wouldn't immediately be devoured by their own people standing in protest. No One-World-Currency chants in replacement. The world's finance is best fractured while the world itself is best kept intact. This was a train wreck but at least we know who the wreckers are and can eliminate those genetic codes. Keynes was a nutcase but Inflationists have been beyond dangerous more than once in the last few centuries and getting them permanently gone is now a global mission.
Aug 5, 2013 3:09PM
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I love that we have a Fed that is open about policy and why they are making the decisions based on data.   Now they have benchmarks for the data that will give you a good indicator on when the Fed will change policy.  This is just the economy trying to fudge the numbers and bring down unemployment to trigger the taper.  Confirmation bias anyone?  Notice how Bernanke uses language like threshold instead of trigger?  Its because this article points out his worse fear, that the economy is a house of cards still and he has to use language to manipulate public opinion so we don't kill ourselves lol.
Aug 6, 2013 8:26AM
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Loss of manufacturing jobs and schools turning out millions of functional illeterates that are untrainable for technical jobs along with Obamacare supressing employment, this trend will accelerate. Oh I forgot, government training programs and green energy jobs will make up for te decline in overall job losses in other sectors. HA 
Aug 6, 2013 1:10AM
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This is what I've been saying. There are so many hundreds of thousands of jobs created, but how many are part time or minimum wage? They don't say that, they just announce, hundreds of thousands of jobs created!

In our Sunday paper, there's a banner that says how many jobs listings there are and how much in coupons there are. There might be 100 jobs listed, but when you look at them, most of them are "airlines are hiring, get your diploma in aircraft maintenance". "Be a medical coder in as little as 18 months!" "Get your CDL!"

Then there's the ones that are "Wanted, child educator wanted. Fridays 2-4 after school at blahblahblah day care center." "Hiring school bus drivers. Must be available 5-8 am and 1-4 pm."

 

Really??? REALLY????? Out of these 100 or so "jobs" listed, only 2 or 3 may be actual full time, actual jobs. The rest are training for jobs or part time jobs, but all of them are minimum wage, service industry jobs.

Aug 5, 2013 7:53PM
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Why is when these "jobs" are "created" its always slammed as being too low paying? Is it not better to at least be working and looking for something better than sitting at home collecting unemployment from those of us who are working or paying into the system? It's not like anyone is forcing anyone to take a job and trust me I have seen people turn down jobs paying $11.00 an hour because its better to stay on unemployment.
Aug 5, 2013 5:25PM
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if this headline is correct, then why should the minimum wage be raised if all these minimum wage jobs are fueling the economy?

 

seems like backwards logic to me

Aug 6, 2013 8:02AM
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Wow another MSN article for the brain dead. Only the idiot liberals who support Obo would deny the truth.
Aug 6, 2013 1:45PM
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Aimee,

 

Does the quantity or the quality of the liberal c$ck you s$ck to keep your job matter?

Aug 6, 2013 8:54AM
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Many employers are shooting themselves in the foot by scrimping on employee wages, benefits, and advancement opportunities. The best way run off customers is to treat them poorly with malaise, indifference, disrespect, and unprofessional attitudes. For many businesses, this is becoming the new standard of customer service, fueled by revolving door HR policies and rock bottom expectations for rock bottom pay. With employees as well as the products and services they represent, you get what you pay for.
Aug 6, 2013 2:41PM
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I am so confused by how so called "experts" belive that these jobs numbers and quality are not the largest road sign that has ever been right in front of thir faces that this economy is in serious trouble...the stock market today dived due to the fed saying it could start to reduce printing in september...and for those who dont understand its not printing by the way its injecting money into banks which in turn loan to large companies to either rollover debt or share buybacks...there is so little velocity being produced by the cash being injected"its the lowest in decades" that it points to deflation of most assets except for commodities....These jobs combined with deflation in a economy depending on consumers for 70% of GDP seems very evident to me that in the coming years we are in big trouble....In a deflation cycle raising wages would only harm everyone including the companies that refied their debt and took on more debt..leading to bankruptcy and further loss of jobs...What we need is less of a focus on shareholder value and calls for companies to take on debt by billionare investors in order to increase dividends.."that does sound insane doesnt it? rob the company with debt to pay the shareholder!"...and a return to a larger portion of profits going to the employees which in turn increases incomes which get spent on consumer products which in turn are taxed which in turn drives GDp and tax revenues...Its a vicious but good cycle...I will miss the gains I've made on stocks the last few years but in the long run it would mean more of a constant growth instead of the volotility weve had every seemingly five years...The U.S. is the worlds consumer... if more money is in the hands of those that spend the most the entire world will reap the benefits...If i purchase my own stock that money is now going into wall street which supports wall street...if i increase the wages of my middle class employee it supports main street...they purchase a home..or purchase a car..or lawn mower..or furniture..or a computer...The middle class.."the largest consumer" used to grow which in turn grew the economy...now it is shrinking...see whats happening?...the only GDP growth is now more and more from financials on wall street and does not create the numbers of jobs that increased spending power could...and which in turn would ward of the deflation...but with all the fed money injection rising wages could start a severe bout of inflation..its going to be a scary ride the the next few years...but can still be money making time by shorting stocks and playing the voltilty on wall street but on main street there isn't any such thing as shorting...except for short of a pay check... 

Aug 6, 2013 1:36PM
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A healthy economy will create low paying jobs, however they will be only a portion of the spectrum. When employers compete for employees, wages will rise, any artificial increase in wages (minimum wage increases) is inflationary, pandering, and moves us further from full employment (where there will be competition for employees). Citizens of this great nation should be clamoring for full employment rather than minimum wage increases.
Aug 6, 2013 10:58AM
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True, the statistics show a downside, but there is a big upside to buffer the statistical blow. Most Literature, Science, and Art majors are able to find employment.
Aug 5, 2013 2:59PM
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This is what happens when people make loans that can't be paid back.  Rules and regulations are needed so the economy doesn't go off the rails like it did a few years back.  We need solid banking regulation to make sure it does not happen again.  Wall St. does not live on Main St, profit incentive drives them and its what makes them tick, and often times they step out of bounds

Democratic ideology is to raises the min wage and regulate out the ****, but u can't over regulate or it creates inefficiencies and bad spending, not to mention lazy incentives.

Republican attitude is to let everything be as is, let markets figure themselves out.  Thats all cool and all but people are corrupt(after all economics is a social science).   Too many people get taken advantage of with this system and it ends up being 99% vs 1%.

How about we put our minds to work and actually get something done in Washington for once?  Because the cost of living is marginalizing the middle class and allowing for corporate welfare to be at an all time high. 

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