Quality Vs. Quantity: Evaluating The Jobs Report

There was mixed news from the Labor Department Friday. On the one hand, the unemployment rate fell to 7.4 percent in July, its lowest level since December of 2008. But job growth fell short of expectations.

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From NPR News, this is ALL THINGS CONSIDERED. I'm Audie Cornish.

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And I'm Melissa Block. We begin this hour with mixed news today from the Labor Department. The unemployment fell to 7.4 percent last month. That's the lowest it's been since December 2008. Still, the economy didn't add as many jobs as analysts had expected. And as NPR's Yuki Noguchi reports, it's not just the quantity of jobs that has many economists worried, it's also the quality.

YUKI NOGUCHI, BYLINE: At 162,000 new jobs, the hiring rate is slower than it has been on average in the last year. In July, as in previous months, most of the jobs added were in low-paying positions, which might help explain why average hourly wages also fell. Those numbers come as no surprise to Morris Cornley(ph), who says jobs are in short supply, especially the well-paying kind.

MORRIS CORNLEY: The economy might be getting better for some, but it's not getting better for the fast food workers and the retail workers that are making 7.35 an hour. It's not getting better for me.

NOGUCHI: For over two decades, Cornley did have a good job driving trucks and making $17.45 an hour until getting laid off three years ago. His job search landed him at Jimmy John's Sandwich Shop in Kansas City working for minimum wage. This week, Cornley joined a nationwide strike demanding fast food chains pay a $15/hour living wage. He says his kids and grandkids work in the industry, but three generations of fast food paychecks still isn't enough.

Cornley says he shares food scraps with his dog.

CORNLEY: A lot of time we eating off the same plate.

NOGUCHI: Close to 60 percent of the jobs created since the beginning of this year are in the lowest third of the pay scale.

DANIEL ALPERT: So when you really look at that it's not surprising that we're not getting the economic growth out of this new job creation.

NOGUCHI: Daniel Alpert is managing partner of Westwood Capital and a fellow at the Century Foundation, a think-tank. In the absence of middle class jobs, he says, people are settling for low wage work.

ALPERT: These tend not to be full-time positions. You're sort of getting a double whammy. Not only are you getting a lot of low wage jobs but you're also getting a lot of part-time jobs.

NOGUCHI: Alpert says there are essentially too many people looking for work. This week, President Obama proposed - and the Republicans rejected - what the president called a grand bargain, including tax cuts in exchange for investments in job training programs. But Alpert says that's not enough to fix the U.S.'s biggest long-term issue - an oversupply of labor.

ALPERT: I feel that it's important that people actually understand the nature of this quote/unquote "recovery." This is not playing out like anything we've seen before and, in fact, it's a very sick recovery.

NOGUCHI: Mark Vitner(ph) is a senior economist with Wells Fargo. He takes a more optimistic view of the low wage boom and what it means.

MARK VITNER: Typically, a lot of the folks that are working jobs at restaurants and retailing are in some sort of state of transition. And I think that's where the economy is today. The economy is in a state of transition.

NOGUCHI: In other words, many unemployed people will need retraining, which can take years. Eventually, he says, the workforce's skills will match the needs of the new economy and better paying jobs will return. But that's cold comfort to Kareem Starks(ph) who ran out of funds before he could complete his college degree. Starks had worked planting trees for New York City Parks and Recreation, earning more than $17/hour, grooming himself, he thought, for a new green economy.

That job ended two years ago.

KAREEM STARKS: I must have went on, like, 50, 60 interviews for different green job positions and I didn't get anything.

NOGUCHI: Starks now works two minimum wage jobs, one at McDonalds and another at a security firm. He says he has colleagues who have also slipped down the pay scale.

STARKS: You know, it's hard to get back in those positions once you fall off. You got to climb your way back up. Like they say, it's an entry-level job, but we're not getting anywhere. They keep us at entry level instead of letting us move up.

NOGUCHI: McDonalds named Starks employee of the month in June, but what he really wants is to get paid $15/hour, or at least the opportunity to work more than the 30 hours a week he gets. I asked him whether he'd consider some job retraining or perhaps completing his college degree.

STARKS: You serious? I can't even afford to buy myself lunch sometimes.

NOGUCHI: Starks says he doesn't have a lot of alternatives. He has a job - two of them, in fact - they just don't pay enough. Yuki Noguchi, NPR News, Washington.

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