By: Brad Tuttle
July 6, 2012
The latest jobs report indicates that economy added a mere 75,000 jobs during the April-June quarter, and that the unemployment rate remains stuck at 8.2%. The news may seem worse in light of the kinds of jobs most likely to be created nowadays: The industries that are growing the quickest and have been hiring like crazy are offering jobs with meager salaries, as well as duties that many workers find beneath them.
Over the past two decades in the U.S., one category of employment has outgrown all the rest: the "personal service job." The jobs that fall into this category include cutting hair, cleaning houses, assisting the elderly, and serving burgers and fries in the fast food world.
Besides the general idea that these jobs all involve helping others in some way or another, they also have a few more things in common: They cannot be easily outsourced to overseas workers (or robots, for that matter), they tend to pay poorly (often, by the hour, and under $10 or $15 an hour), and they tend to be the kinds of low-skill jobs that high school guidance counselors have traditionally suggested for students with barely passing grades. No wonder more and more people are questioning whether the American Dream still exists.
Between 1989 and 2007, a period when the American economy mostly boomed, the number of personal service jobs grew by 36%, according to data cited by the Wall Street Journal. By contrast, middle-skill jobs, including work as clerks and factory production, grew by just 5% during this same time period.
During the years during and after the Great Recession, the trend basically continued: From 2007 to 2010, when the overall number of jobs decreased by 6%, there was a decline of 12% in middle-skill jobs, while personal service employment was one of the only categories to post an increase (2%). Even though it's nice to be employed in a growth industry, these personal service jobs are often the option of last resort for workers. David Autor, an MIT economist who dissected decades of employment data in a recent report, explained why this is so to the WSJ:
"These aren't going to be high-paying jobs because the skills are quite generic. Anyone can be productive at them in the next day or two. If you had to choose which jobs you'd want to go away, you'd pick these low-wage jobs, not the middle-skill ones."
It's safe to say that many of today's low-wage personal service workers landed in their current positions only after failing to get hired for better-paying, middle-skill jobs. Now, though, there are far more openings in the low-skill, low-wage job territory, with dramatic increases in hiring among home-health aide companies and fast-food chains.
Perhaps no segment of the population knows this better than America's young workers (or aspiring workers, as it were). As Bloomberg News and others recently reported, one of the reasons that joblessness among 16- to 24-year-olds was roughly double the national average (16.1% vs. 8.2%, respectively in May) is that young people have often been competing with seniors who cannot retire or who simply want to stay in the workforce at least part-time--and who obviously have plenty more work experience than someone who is 19. CBS Moneywatch noted that "of the 4.3 million jobs created in the past three years, nearly 3 million have gone to people over the age of 55."
The scenario is one in which grandparents are essentially taking their grandkids' jobs. And perhaps worst of all: They're usually not even good jobs.
A new Urban Institute study predicts that hiring for middle-skill jobs isn't expected to pick up anytime soon. Instead, "employment growth is projected to be slightly higher for jobs that require both the lowest and highest levels of education." In other words, workers who used to have a shot at better-paying, middle-skill jobs will probably have little choice but to go with low-skill, low-wage employment for years to come. And considering that the population is aging, and that very few older Americans are confident they'll have enough money to retire, the competition is likely to stay strong down the line for even these low-skill, low-wage jobs, among young and old alike.