Jobs Report Shows Unemployment Steady, but There’s Underlying Trouble

Zachary Karabell says the kinds of positions added—and not added—aren’t necessarily reassuring.


Friday’s monthly dose of official information about the U.S. employment picture, a.k.a. the jobs report, showed very little change. The official unemployment rate stayed the same, at 8.3 percent, and 227,000 jobs were added. The number of long-term unemployed, or those without jobs for more than six months, stayed the same at 5.4 million, as did the number of those working part time but wanting to work full time, at 8.1 million. And there was also little change in hours worked per week.

From a political perspective, this report will do nothing to dent the Democrat story that economic activity is gathering steam, and it will give Obama et al. another month to tout the success, however delayed, of their multiyear efforts to right the severely listing economic ship. At the same time, because the level of job creation is only steady rather than spectacular, and because the overall levels of unemployment and underemployment remain elevated relative to expectations and to the past 30 years, the Republicans can still viably assail the Democrats for failure to make things better.

But politics, however noisy, is less important than the ongoing structural realities that this report and its cousins describe. It’s less about the headline number than about the emerging trends, which are also captured by a number of private surveys including one recently released by Gallup.

Those trends reveal the existence of a very large class of unemployed, underemployed, and employed but poorly paid workers. They reveal as well an even larger class of well-paid, engaging, and dynamic jobs. Gallup this month actually showed the pace of layoffs increasing in January, and its surveys reveal very little change in the past two years of unemployed and underemployed, with a peak of just over 20 percent in 2010 and declining only to 19.1 percent today. According to Gallup, the jobs situation was actually better at the end of 2010 than it is now.

Dueling survey data are both a problem and inevitable. Creating a statistical snapshot of employment, both in the United States and anywhere in the world, is as much art as science. Sampling sets, seasonal adjustments, whether people describe their reality when asked on the phone, whether there is too much self-selection as to who answers the surveys and who doesn’t, how unemployment is defined (if you haven’t actively been looking for work in months, you are not, statistically speaking, unemployed; you simply aren’t in the work force), all of those create complications. Hence the contrast between Gallup’s surveys and the official numbers compiled by the federal government’s Bureau of Labor Statistics.

Both reports, as well as another report released each month by a payroll services company called ADP, share a common theme, however. There has been real job creation in the past year, but almost all of that has come from lower-income jobs. According to the government, the fastest-growing category is “professional and business services,” which includes temp work. This month, temp work accounted for 45,000 new jobs. The second fastest growing category is health-care services, mostly lower-paid jobs such as caretakers. And the next fastest growing is leisure, with most of that coming in “food services and drinking places.”

An economic system whose primary growth comes from orderlies, bartenders, and temps is hardly the recipe for long-term affluence and global preeminence. That is said with zero disrespect for the hard work, and often drudgery, that those jobs entail. These are honorable professions, and many who find themselves in them are doing their utmost to take care of their own basic needs and those of their families. From a national perspective, however, when these are the only sectors showing consistent expansion, we should not be quick to tout a robust system on the mend. We should be focused with urgency on a national employment picture that is fracturing into a rather stark world of haves and have-nots.

And what of the manufacturing sector, which has shown job creation over the past two years, adding back nearly 450,000 jobs since January 2010? Yes, manufacturing employment has stabilized, but it is still down by millions over the past decade and is now a field for higher-skilled, specialized workers rather than a source of jobs for millions and millions of young people capable of physical work but untrained in robotics and computer systems. Manufacturing is becoming a specialized, high skill, and a fairly higher-wage sector, much like computer programming. That is all for the best for manufacturing and for American output overall, but it only reinforces the larger reality that this is an economic system in which the gap between those who have gained skills and education and those who have not is wide and yawning wider.

The thumbs-up, thumbs-down nature of politics and media impedes our collective ability to cogently address what is going on. It’s not a case of employment strong or weak. It’s a case of what employment, paid how much, where in the country, and what the long-term prospects are for wages, security, national prosperity, and global competitiveness. It’s not a question of competing against others, but it is an issue of remaining viable, innovative, and dynamic in a world in which such qualities are hardly in short supply. Friday’s report, like its monthly cousins in the past and those still to come in the future, quickly gets translated into familiar refrains of greatness or decline. And meanwhile, our system continues to morph and divide, and few of us are confronting those realities with a clear eye and an open mind.