| How Good Are the New Jobs?
by Tim Kane, Ph.D., Backgrounder #1773, June 30, 2004
http://www.heritage.org/
Economic pessimists have changed their tune. After years of trumpeting a "jobless recovery," the skeptics are admitting that America is in the midst of a jobs boom, with 1.4 million new jobs over nine straight months of payroll growth. Now the pessimists insist that the new jobs are no good.
But if the jobs being created are not any good, what is? Since January 2001, American incomes have risen by 7.5 percent, wages have risen by 2.4 percent, and the government projects 21 million good job opportunities over the 2002-2012 decade.
Argument #1: American Pay is Higher Today Than During the Dot-Com Boom
Multiple indicators show big pay gains in recent years. Real disposable income per capita is 7.5 percent higher than it was in January 2001. Annual real income per capita--a broader measure of quality of life--is up 5.2 percent ($1,819) in the United States over the same period. That is real money, after inflation, that would pay for an extra 900 gallons of gas for every American.
Real hourly earnings are up by 1.61 percent since March 2001, when the recession began; up 2.37 percent since President George W. Bush was inaugurated; and up 8.87 percent over the past 10 years. One advantage of earnings data is that they count only "production or nonsupervisory jobs," so they are not skewed by rich incomes, but the downside is that they are also limited to traditional payroll jobs since the source is the Current Employment Statistics (CES) survey.
Regardless of which statistics--even non-inclusive CES figures--one uses, American jobs are higher-paying now than they were during the dot-com boom or, more technically, the pre-recession peak of the first quarter of 2001.
Argument #2: New Jobs Are Quality Jobs
The number of payroll jobs has increased for nine straight months according to the CES, especially in the service-providing sector.
The Occupational Outlook Quarterly indicates that future jobs will be concentrated predominantly in health, education, retail, and computers. Registered nurses earn a median salary of $48,090 and are projected to add an astounding 110,119 gross job openings per year. Furthermore, health care jobs comprise one-half of the 20 occupations that are projected to grow the fastest in the 2002-2012 decade. Computer occupations account for another five.
According to official projections, the top occupations in numerical decline are farmers and ranchers, sewing machine operators, typists, and stock clerks --not IT workers, not scientists, and not the highest-paying professions.
Making projections about future employment is inherently uncertain, mainly because the fast pace of technological and social change means that there will be new occupations in 10 years that are simply beyond today's imagination.
Everyone knows of the financial rewards that favor people with high intelligence, education, and skills. However, in American society, there is a second, deeper trend toward personal, face-to-face employment. Not everyone needs a Ph.D. to do well in the future. Physical therapists, personal tutors, and gardeners are examples of growing occupations that are high-skill but not necessarily high-education. It is easy to imagine an America where all senior citizens are well-cared for, all workers are coached to succeed, and all children are nurtured by personalized educators. Personal attention is a key trend in the future, and therefore in the workforce.
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