Mixed bag: more jobs, less pay

Editorial by Wilmington Star-News, September 1, 2013.

On Labor Day, it's fitting to note that there are definite signs that the economy and the job market are moving forward, slowly but deliberately. The most recent statistics show improvement, and according to the U.S. Labor Department, unemployment claims are near their lowest point since 2007.

In North Carolina there is good news also, even though the state continues to suffer one of the highest jobless rates in the nation. The number of people employed grew in the Cape Fear region as well, to its highest in four years. And according to UNCW economist Woody Hall, that's true even after adjusting for temporary jobs added during the tourism season.

All of this is reason for optimism that we are pulling out of a very deep economic canyon. We hope.

Even with that reassuring news, however, workers in North Carolina also have some worries on this Labor Day.

While businesses are hiring again, most of the jobs created since the recession have been in low-wage jobs, and many workers who lost jobs during the recession were in much higher-paying fields such as manufacturing, finance, information and management. Hence, even if they have found employment, chances are they are still much worse off than before the recession hit.

That trend is true nationally as well as in North Carolina and the Cape Fear region. And if it continues, it does not bode well for our economic future. USA Today reported that 60 percent of the jobs added nationally in July were in four sectors that historically pay low wages – retail, restaurants, home health care and temporary staffing jobs.

In North Carolina, the leisure and hospitality services sector led the way in jobs created since the recession. That category includes jobs in restaurants, bars, hotels, theaters, museums and other attractions. Jobs in hotels, restaurants and the like are important to the health of our economy and are closely related to the tourism industry, which in turn helps support those and other businesses. But they do not pay wages comparable with skilled vocational and career-oriented fields that provide a solid middle-class living. Many of those jobs are part time.

Two other fast-growing sectors, transportation and professional services, pay much better, but jobs are fewer in number than those in low-skill service jobs.

In addition, many people who finally found work after losing their jobs because of the economy have had to take jobs that pay far less than their previous work. That means many are worse off than before, and their spending habits will reflect that. There are still three unemployed North Carolinians for every available job, and in many cases the skill sets do not match. Even given those lopsided odds against job seekers, the N.C. General Assembly slashed unemployment benefits and the length of time a person can receive them. The cuts also meant turning down extended benefits fully funded by the federal government.

Businesses naturally have an obligation to keep costs, including personnel costs, in line. They've had it rough, too

So it's really a mixed bag for those still in the labor force. Economic growth is occurring, but North Carolina came out of the gate much slower than in previous recoveries, and workers are living in an environment of wage stagnation or reduced wages. It appears, however, that the job growth represents a trend rather than a blip on the radar. That is no small accomplishment – it's been a rough few years.