More Jobs, Less Pay : The Indicator from Planet Money In honor of jobs day, we look at the jobs that used to be high-paying, that are now low-paying. What happened to these jobs? And what can it tell us about the U.S. economy?
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More Jobs, Less Pay

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More Jobs, Less Pay

More Jobs, Less Pay

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(SOUNDBITE OF AIR HORN)

STACEY VANEK SMITH, HOST:

Oh.

CARDIFF GARCIA, HOST:

Kind of sad.

VANEK SMITH: That's so rough.

GARCIA: (Laughter).

VANEK SMITH: Hey, everyone. That is the sound of the Jobs Friday air horn with, you know, a little bit of the air being let out of it because it is Jobs Friday, and 155,000 jobs were created in November. That's today's Planet Money indicator. But it is less than the roughly 200,000 jobs a month that the economy has been creating for most of the past year.

GARCIA: But still, it's not that bad a number because in fact you would expect, at some point, a gradual drop-off in jobs growth this late in the economic expansion. We don't know yet if we have reached that point, or if this month was just a blip or if in fact it does signal some kind of a slowdown. But regardless, the jobs report overall was pretty good.

VANEK SMITH: Important to keep in mind. So as we normally do here on THE INDICATOR FROM PLANET MONEY, we are going to use Jobs Friday as a reason to look at a longer-term trend in the labor market. I'm Stacey Vanek Smith.

GARCIA: And I'm Cardiff Garcia. Today on the show, we look at six jobs that once paid more than the average wage and now pay less than the average. What happened to them? And what do the stories of these specific job categories tell us about the U.S. economy?

(SOUNDBITE OF MUSIC)

HEATHER LONG: Hi. I'm Heather Long, the economics correspondent at The Washington Post.

GARCIA: A few months back, Heather and her colleague Andrew Van Dam wondered, like a lot of people, why wages weren't climbing faster in the U.S. economy. But they were interested not just in the overall economy but in what had happened to specific job categories where wages were not keeping up.

VANEK SMITH: So they looked at six categories - first, jobs in the movie and music industries. A big reason that wages haven't grown more in these areas is online piracy, people finding ways to hear songs and watch movies without having to actually pay for them.

GARCIA: But it's not the only reason. The digital tools needed to produce songs and movies have also become a lot better and a lot cheaper, so a lot more people can try. And consequently, there is more music and movies out there now. But that also means that the money people spend on them also gets spread out between more people, so each individual person will make less.

LONG: It's more accessible to do and probably seen as a - kind of a sexy job to be involved in in industry that's growing, that's expanding, that so many people now recognize. But unfortunately, that means those earnings are diluted.

VANEK SMITH: The second category of jobs that used to pay above average and now pay below average is warehousing and storage. There's been a lot of hiring into warehouse jobs in recent years, especially to store things that are sold online before they get sent to customers. But the nature of jobs in warehouses has changed from when they used to be more industrial jobs that paid more. Heather says this is because earlier jobs required more muscle and more skill to do things like sort metal parts or drive a forklift. Now these jobs pay a lot less.

GARCIA: Third category is food production. Now, the story here is partly about changing tastes by the American consumer. Americans are eating more meat than ever, so the share of workers in the food production business that work in slaughterhouses and meatpacking plants has gone up. But Heather and Andrew found that those jobs don't pay as much as jobs in, like, cheese factories or fruit and vegetable canneries. So average wages in the overall sector have not kept up.

VANEK SMITH: The fourth category of jobs? Repair and maintenance, jobs for people who repair household items, like your television, your refrigerator. Those are lagging in how much they pay.

LONG: And a lot of people blame that on (laughter) the whole industry of do-it-yourself repair people. Instead of picking up the phone and calling the repairman or woman, yeah, you're logging on to YouTube.

GARCIA: Yeah, you're getting those videos that tell you how to fix it yourself. And it's like, I can definitely do this.

VANEK SMITH: (Laughter) Definitely.

GARCIA: Usually, by the way, I can definitely not do this.

VANEK SMITH: (Laughter).

GARCIA: Like, I'm usually wrong. And I give up halfway through, and then I call the professionals. You know?

VANEK SMITH: (Laughter).

GARCIA: But anyways, it's not just about do-it-yourself. These household products have also become better and cheaper through the years, and so they last longer. But that's bad for the repair business. And also, a lot of us just choose to buy new items more frequently rather than get the old ones fixed. That is also bad for repair workers.

VANEK SMITH: The fifth category of jobs where wages have gone from above average to below average is the auto sector - not just people who work on car lots selling cars, but people who work for companies that sell auto parts especially. A lot of this category has gone online, where it's easy to find and compare parts and prices. And so the effect is similar to what happened with repair workers. There's more information freely available, so fewer people are turning to these workers.

GARCIA: Sixth category and the last one - wood products. So these are jobs in lumber-related or wood-related industries, jobs like sawyers and people who work in lumber mills. And these jobs have been hit with a kind of double whammy, Heather says.

LONG: Part of it is that housing crisis that happened. Huge drop-off in demand for buildings, for new homes in that early '09, 2010 period. It's been one of the more sluggish parts of this recovery, to build single-family homes again.

GARCIA: Less demand for homes of course means less demand for wood. The second whammy, by the way, in that double whammy that Heather mentioned is that woodworkers have increasingly had to compete with imported lumber and wood products like furniture from other countries, like Canada and China.

VANEK SMITH: So those are the six job categories whose wages have not kept up with the rest of the economy. And Heather says they do have some things in common. One is that a rising share of the workers who do these jobs do not have college degrees. Another is that five of these six job categories, except for wood products, have continued adding workers.

GARCIA: And you might think, well, if these jobs are paying less, then why would people keep taking them? Why wouldn't these workers start migrating to other jobs that pay more? It's not entirely obvious, and there probably is no one answer. But it's a good reminder that the real world is just messy. So for example, in some cases it might just be very hard to retrain for another job, especially if that also means going without a paycheck for a while, or if it's a job in which the workers have spent their whole careers developing their skills or if they're doing something they really like. But a lot of these workers also just might not have a lot of other options.

VANEK SMITH: And so one lesson from this analysis from Heather and Andrew might be that the U.S. economy has increasingly rewarded higher-skilled jobs over time. Lower-skilled jobs, not as much.

GARCIA: But maybe the biggest takeaway is that it's not obvious how to think about the declining pay in these jobs. On the one hand, it is a problem that these jobs were once a path to the middle class for so many people, and now they're not. This is really tough on workers who lack the option to do something else.

VANEK SMITH: It really is. And on the other hand, this is partly also a story of progress. For example, the reason that jobs in music and movies, as well as jobs in the auto sector and repair and maintenance, don't pay as much as they used to is because technology in those sectors has gotten a lot better. And the trade with other countries that has been hurting people working in lumber-related industries, that also means that those goods from overseas are cheaper for us. In general, better technology and more trade has made it possible for Americans to afford better and cheaper things that in general make their lives better.

GARCIA: And so there's a tension that's clearly revealed by these stories of the jobs that now pay less than average, a tension between workers on the one hand and consumers on the other hand. And also, there's a question for all of us and for policymakers - how do we address the stagnating wages and incomes of people whose jobs are leaving them behind the rest of the economy, but without halting the progress that benefits everyone else?

(SOUNDBITE OF MUSIC)

VANEK SMITH: And Cardiff, before I let you go for the weekend, I feel like we should mention something, which is that THE INDICATOR just had a birthday.

GARCIA: Yes, that's right. Happy...

VANEK SMITH: We turned 1.

GARCIA: ...First birthday to us.

VANEK SMITH: I know. It's been a whole year of Jobs Fridays and economic ups and downs and indicators. And I think maybe this calls for...

(SOUNDBITE OF AIR HORN)

VANEK SMITH: Happy birthday, Cardiff.

GARCIA: (Laughter) And to you.

VANEK SMITH: THE INDICATOR is produced by Constanza Gallardo and Darius Rafieyan and is edited by Paddy Hirsch. Our intern is Echo Wang. And we're produced by NPR.

(SOUNDBITE OF MUSIC)

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