An Economy For Everyone: August Good Jobs Recap

Patrick DugganQuality Jobs

quality jobs manufacturing

In order to build wealth and create opportunities in and across America’s underserved communities, and reverse the troubling trends we’re seeing in our economy, we no longer find it defensible to focus on job creation alone. It’s clear that job creation does not itself equate to lasting economic change. And so, we must shift our focus to the creation of higher quality jobs — jobs that are good for workers and their families, good for businesses, and good for communities — enabling us to build an economy that works for everyone.

Each month, we bring you the latest roundup of news from the fight for quality jobs for working people.

Where Did You Come From, Where Are You Going

Since 2010, the Brookings Institution has been calculating and tracking something they call the “jobs gap,” which is the number of jobs the economy needs to return to pre-recession levels. With August’s better-than-expected jobs report, the jobs gap is now finally closed! That’s the good news – but there’s unfortunately bad news, which isn’t news to most working people. Wage growth, for example, is still slower than many would like. Both the retail and manufacturing sectors continue to shed jobs. Beyond that, too many people are still working part-time because they can’t find full-time jobs, and the labor force participation rate for prime-aged adults is still quite low.

One of the biggest drivers to this new reality? Restaurant jobs are on fire in 2017, growing faster than health care, construction, or manufacturing. The Bureau of Labor Statistics calls this subsector “food services and drinking places,” and the jobs are mostly at sit-down restaurants, which make up 50 percent of the category. Fast-food joints are the next-largest employer in the category, with 37 percent. Jobs are jobs, but these ones don’t pay very well. The typical private-sector job pays about $22 an hour. The typical restaurant job pays about $12.50. That’s one reason why the Fight for 15 movement to raise the minimum wage has targeted the restaurant industry.

Manufacturing And “Good” Jobs

Manufacturing jobs continue to provide above-average wages, especially for skilled positions that require on-the-job training but not college degrees. Among workers without a four-year college degree, manufacturing workers earn $150 more per week than in other industries. On average, an econometric analysis finds that workers in manufacturing earn 9 percent more per week than workers in other economic sectors, holding other differences between workers equal. However, plummeting manufacturing unionization in the Rust Belt over the past twenty-five years has shrunk the real wage advantage of manufacturing jobs from $220 to $170 per week in the crucial region.

It’s hard to talk about manufacturing and good-paying jobs without talking about equity. While manufacturing has lost about 3 million jobs since 1991, well-paying jobs that don’t require a bachelor’s degree haven’t gone extinct, but they do look different today than in the past. And yet the workers who hold these often coveted positions still look largely the same: They’re white men. There are an estimated 30 million “good jobs”—as defined by salary—for workers without a bachelor’s degree, according to the Georgetown Center on Education and the Workforce. And men hold 70% of those jobs, a gender imbalance that hasn’t budged for the past two decades, according to the report.

Of those 3 million jobs that have disappeared, the biggest reason has been off-shoring to China and other low-wage countries. This past month, Walmart and the Boston Consulting Group released a report saying we could reclaim an estimated 1.5 million jobs through “reshoring” of domestic goods production. Walmart said that all levels of government should pursue more workforce training with curricula aligned with the needs of industries to overcome gaps in high demand skills. They also recommended a push for more vocational schools and apprenticeships to reduce the financial burden of training and re-skilling workers placed upon manufacturers. The policy roadmap suggested that there should be more recruitment of “non-traditional labor pools” like displaced workers, minorities and veterans, to upskill and retain these workers and creating a more diverse workforce.

How Local Policies Help – Or Hinder — Brick and Mortar Small Businesses

Small retail businesses are disappearing from city streets, where the resulting streets are often left empty—leading to so-called high-rent blight—or else replaced by chain stores. Meanwhile, cities around the U.S. are recognizing the value of homegrown retail and are enacting policies to enrich the frequently poor soil where small businesses attempt to grow. That’s because municipal leaders are realizing that the basis of any community is its sense of place—its singular look and feel, roots and aspirations—and local retail is essential to expressing that. Shops are part of culture—in addition, of course, to being the places where you can fix a shoe, find a dress, buy a coffee, and chit-chat.

The toolbox of local shop-saving solutions is expanding, even at this moment when we don’t know what shopping will become in the face of online commerce. San Francisco, for example, has for some time only permitted chain stores on a case-by-case basis. Phoenix is banned from giving large retailers tax and other incentives. Palm Beach, Florida, created a Town-Serving Zone, and Fort Collins, Colorado, declared a development moratorium in order to more sensibly handle a rush of chain stores wanting to locate there. Seattle is working to launch a program to support historic businesses.

Take Vernon County as an example. Heard of it? Me neither. But even if you’ve never heard of Vernon County in southwest Wisconsin you’ve probably eaten food from there. Vernon County has one of country’s densest concentrations of organic farms. That’s not a coincidence. In the face of industrial agriculture and market consolidation, the small farmers of Vernon County realized that they would have to join forces if they wanted to compete. Together, they formed the Coulee Region Organic Produce Pool (CROPP)—better known today as Organic Valley. The local impact has been transformative.

Local policymakers are also realizing that small businesses need money – both to startup and to grow – and when their coffers or big banks can’t or won’t provide it, they need to turn to nonprofits and CDFIs. That means a new focus on creating community quarterbacks and consortiums of small business lenders. Kevin Jones takes to ImpactAlpha to write about this with a new term — System Entrepreneur. They’re is in the middle of the Entrepreneurial Ecosystem — connecting to community, civic, and church sectors, as well as to anchor institutions — bringing in financial instruments that entrepreneurs can use and providing support for them afterwards.

The flipside of this, though, is the hangover from a half-century of states and communities shoveling tax breaks at corporations with the hope that they’d create jobs. Now we know that hasn’t worked, but policymakers are slow to change course. For example, AT&T paid a tiny 8% tax rate while cutting 80,000 jobs across the country. Despite being the backbone of the economy, funding from the Small Business Administration is a fraction of that of corporate welfare.

When you pay taxes, you expect that money to go toward ensuring the greater good of society. Taxes pay for things like roads and hospitals, all of which are mutually beneficial to people from all walks of society. One thing you probably don’t expect your tax money to fund is bailouts for corporations that turn around and incorporate in another country to avoid paying taxes.

Can Capitalism As We Know It Evolve?

Our capitalist system’s single-minded focus on the growth of the capital supply is why corporations have a fiduciary duty to grow their stock value before all other concerns. This prevents even well-meaning chief executives from voluntarily doing anything good, such as increasing wages or reducing pollution, when doing so might compromise the bottom line. Mark Kirk writes in The Guardian that American Airlines CEO Doug Parker found that out earlier this year when he tried to raise workers’ salaries and was immediately slapped down by Wall Street.

Even in a highly profitable industry – which the airlines are, despite many warnings – it is seen as unacceptable to spread the wealth. Profits are seen as the natural property of the investor class. This is why JP Morgan criticized the pay rise as a “wealth transfer of nearly $1bn” to workers. It certainly doesn’t have to be this way, and we don’t need to look backwards to socialism, or any other historical system, as an prebaked alternative. Instead, we need to evolve.