The numbers for September are in: 248K jobs created and an unemployment rate of 5.9%. Our economy has regained all the jobs it lost in the financial crisis and then some. More Americans than ever will be punching the clock on Monday morning! Unfortunately, that's true in a more literal sense than you might think. Clocks are generally punched by workers who do menial, low-paying jobs – exactly the sort the economy is creating. Despite all the apparent progress in the job market, hourly wages remained perfectly flat again in September.
Consider these facts from the National Employment Law Project, which has been following the disturbing trend closely:
>> Lower-wage industries constituted 22 percent of recession losses, but 44 percent of recovery growth.
>> Mid-wage industries constituted 37 percent of recession losses, but only 26 percent of recovery growth.
>> Higher-wage industries constituted 41 percent of recession losses, and 30 percent of recovery growth.
>> Today, there are nearly two million fewer jobs in mid- and higher-wage industries than there were before the recession took hold, while there are 1.85 million more jobs in lower-wage industries.
>> Service-providing industries such as food services and drinking places, administrative and support services, and retail trade have led private sector job growth during the recovery. These industries, which pay relatively low wages, accounted for 39 percent of the private sector employment increase over the past four years.
Wall Street is celebrating this as a great victory this morning; the SPDR S&P 500 ETF (SPY) is up 0.8%. Companies have not only found the labor they need, but they have done so without having to raise pay. It turns out it was just a matter of waiting out a few thousand hold-outs who had hoped, not for a better life, but for a life as good as the one they once had. Such dreamers.
Wall Street should celebrate while it can, for all it has won is one more quarter of low expenses, and it's a pyrrhic victory if ever there was such a thing. The America these public companies once sold their products and services to no longer exists, and the one they have created in its place can't afford them. One more such victory, and we are lost.
Inflation and unemployment were yesterday's problems. America's most serious economic problem now is low wages. The data supporting this are torrential, but still, no one on either side of the political divide has really focused on the issue yet. We need to turn down the volume on politicians and pundits who continue to fight straw men, be they of the left or of the right. We could easily fight these to death – ours, not theirs.
Julian Close has been a business writer since the first day of the twenty-first century, having written for PRA International and the United Nations Department of Peacekeeping. He graduated from Davidson College in 1993 and received a Master of Arts in Teaching from Mary Baldwin College in 2011. He became a stockbroker in 1993, but now works for Fresh Brewed Media and uses his powers only for good. You can see closing trades for all Julian's long and short positions and track his long term performance via twitter: @JulianClose_MIC.