By Jake Rossen
By Jesse Marx
By Michelle LeBow
By Alleen Brown
By Maggie LaMaack
By CP Staff
By Jesse Marx
Two weeks ago a ranking Bush adviser allowed as how the White House wasn't worried about the increase in the number of jobs moving overseas. "I think outsourcing is a growing phenomenon," Gregory Mankiw, chairman of the White House Council of Economic Advisers, told reporters. "But it's something we should realize is probably a plus for the economy in the long run."
It's the kind of tongue-slip that tends to confirm more conspiracy theories than it sparks, and within days, Bush had hit the campaign trail in search of laid-off workers to console. "There are people looking for work because jobs have gone overseas," he conceded to supporters in Pennsylvania, according to the New York Times. "And we need to act in this country. We need to act to make sure there are more jobs at home, and people are more likely to retain a job." One solution, he posited, was to train U.S. workers for better, higher-paying jobs.
It's a nice idea, but there's mounting evidence that it may be a fantasy. Nationwide, more than 2.4 million jobs have been lost during the last three years. And it is true that now, more than two years after the start of the economic recovery, job creation is beginning to pick up. But according to studies prepared by economists both here and in Washington, the problem is that the new jobs are not nearly as good as the ones we lost.
According to a recent analysis of U.S. Bureau of Labor Statistics data conducted by the Washington, D.C.-based Economic Policy Institute, the jobs that vanished during the economic recovery paid much better than the jobs gained. Wages in the industries that have been gaining jobs since the recession ended in November 2001 pay nearly 21 percent less than those of industries that are losing jobs, or $35,410 vs. $44,570.
The picture's even worse for Minnesota, where the new jobs pay an average of 29 percent less. Jobs in shrinking industries here paid $42,135, while jobs being created by growing industries pay $29,780. Only two other Midwestern states scored as poorly: Illinois saw a 34 percent decline; Ohio 29 percent. (Notably, 95 percent of the 48,000 jobs that left Minnesota in the last three years were in manufacturing.)
"Twelve thousand dollars is a huge shift. It's going from what might be termed a middle-class existence to one that just isn't any longer," says Kevin Ristau, education director of JOBS NOW, a St. Paul-based coalition of organizations concerned with employment policy. "For an enormous number of Minnesota workers, it would shift them from being wage earners who are earning family-supporting wages to ones who aren't."
It's a trend that's likely to continue, adds Ristau. According to Labor Bureau statistics, of the 25 occupations that are projected to see the largest job growth in this decade, only eight rank in the top half for median wages. Eleven are in the bottom quarter.
Further, a January JOBS NOW analysis of Minnesota economic indicators shows that one-third of all job openings here are in three areas with a combined median wage of less than $8 an hour: office and administrative support, sales, and food preparation. Nearly two of every five job openings are for part-time jobs, and only 36 percent require anything beyond a high school diploma.
"There's no evidence here of a shift to high-skill occupations," says Ristau. "The survey shows that Minnesota's workers do not have a skills deficit; what they have instead is a wage deficit."
The biggest drag on wages is the high unemployment rate (up from 3.9 to 6 percent under Bush), but outsourcing is the second most important factor, according to Economic Policy Institute economist Max Sawicky. Bush's aide's faux pas notwithstanding, Sawicky believes the administration sees the flight of jobs overseas as the natural, positive consequence of free trade. "The majority opinion out there is that more is better when it comes to outsourcing," he says. "There's a lack of any serious commitment to full employment on the part of the administration."
Indeed, workers may be wondering whether the so-called jobless recovery is a recovery at all, but things are looking up for corporate America and its investors: According to JOBS NOW, corporate profits rose by an annual rate of 40 percent during the last quarter of last year. But 60 percent of the growth generated during the recovery has gone to corporate profits, while employees have seen only 40 percent of the uptick. In contrast, during previous economic recoveries, 75 percent of income growth went to workers.