This Recovery Is Creating Jobs If You Can Call Them That

The current upturn, now in its 28th month, is not so much a jobless recovery (there have been modest gains) as a joyless recovery. So say economists at the Economic Policy Institute in Washington. That's because broad-based wage reductions have occurred, and an unprecedented percentage of the jobs created have been either temporary or part-time. This suggests to Lawrence Mishel and Jared Bernstein of the EPI that if current trends persist, living standards may erode despite growth in gross domestic product.

Thus far in the recovery, key employment indicators have been anything but robust. In the first half of 1993, wages for all workers in all occupations averaged $11.49 an hour, 0.6% less in real terms than in the same period two years earlier and 1.1% less than four years earlier. Hourly wages for white-collar jobs have risen just 0.4% during the past two years and have remained unchanged for the past four years, while wages for blue-collar workers slid 5.3% in real terms. The only silver lining was that women in white-collar jobs fared better, enjoying a 2.8% gain in real wages over the four-year period. But women in blue-collar jobs suffered a decline in real wages. And despite the improvement among highly paid women, wages for all women still trail men's wages within all occupations.

Just as discouraging is the nature of job creation. For starters, payroll employment, which fell by 1.3 million jobs during the 1990-91 recession, grew by only 1.9 million in the 28 months of recovery, for a net gain of just 563,000 jobs. The average net gain in the first 28 months of previous postwar recoveries was 3.3 million jobs.

What's more, the jobs being created are neither high-paying nor secure: Part-time jobs account for 26% of those created, and three-fourths of them were filled by involuntary part-timers. The EPI economists note this is the only postwar recovery in which there has not been a significant reduction in involuntary part-time work. And the trend thus far in 1993 isn't promising: Fully 60% of the jobs created from January to July were part-time, with half of these being filled by people who would prefer full-time employment.

Before it's here, it's on the Bloomberg Terminal.