HARI SREENIVASAN: We want to take another look tonight at the latest unemployment report. For more about that, we are joined now from Washington by Nela Richardson. She is a senior economist with Bloomberg.
So we’ve heard that all the jobs lost in the recession have been recovered, but there’s quite a few people saying that not all jobs are created equal.
NELA RICHARDSON: That’s absolutely right, Hari. Actually, it’s an important milestone but it’s a milestone that doesn’t tell the whole story. The quality of the jobs that have been created in the past five years since the Great Depression are of less quality and lesser pay than the ones that were lost. And that is as important to the recovery – job quality – as the number of jobs created every month.
HARI SREENIVASAN: So what sort of jobs did we lose and what sort of jobs did we recover?
NELA RICHARDSON: You know the BLS also put out another set of analyses that said of the top 10 jobs – 1o occupations – created in March, nine of them had average wages below what the annual average is for occupational jobs. Only registered nurses made more than the average. The others were in low-pay jobs like cashiers or secretarial services ranging from about $18,000 to $34,000 annually a year, when the average is about $44,000 a year. So again we’re creating lower-pay jobs in our biggest sectors than were lost in the Great Recession.
HARI SREENIVASAN: So are these jobs or these pay scales keeping up with inflation?
NELA RICHARDSON: Well, they’re basically treading water right now. Janet Yellen said in a recent speech that at best wage growth has grown by two percentage points. When you look at what low-wage workers spend their money on — food and energy – that is not keeping up with bulk of their budget. Energy prices have gone up over 100 percent since the Great Recession. We’re looking at food prices that have gone up on average over 47 percent . So a 2 and a quarter average annual increase in wages simply won’t cut it for a lot of Americans.
HARI SREENIVASAN: So most people look at the stock market and the incredible success that’s had in the last few of years – how come that’ s not translating into good paying jobs?
NELA RICHARDSON: Well that’s a great question and it’s a hard question to answer. Right now companies are sitting on a lot of cash. So the cash is available to create new jobs. The question is the incentive – are companies still fearing risk coming down the road? Is it a lack of demand? This is a question that needs to be answered because we are not getting these good quality jobs that the market needs. It’s also important to understand that the government is not adding jobs. They are not playing their role either. We lost 85,000 net federal jobs last year. So you have our two big sectors not creating those good paying jobs any more.
HARI SREENIVASAN: And long-term unemployment continues to be a problem.
NELA RICHARDSON: Right, 3.7 million Americans have been out of work for six months or more. There are several things that people are trying to do to support the long-term unemployed. One of the most headlined of which is extension of the unemployment insurance benefits which is still making its way through Congress. If that is not resolved by the end of the year, 4 million plus Americans will not have unemployment benefits that need them who are still out of work.
HARI SREENIVASAN: So this might be an economist’s debate, but is this structural unemployment or cyclical unemployment? And why does that matter to most Americans?
NELA RICHARDSON: Well it matters and it is an economists’ debate that economists take very seriously. It matters because if it is indeed cyclical, than the Fed policy of keeping interest rates very low and working through the markets to create new jobs will work eventually. Because eventually theses low interest costs will incentivize companies to create the jobs that we’re all waiting for. But if it is indeed structural, meaning that companies do have job openings and American workers don’t have the skills to meet those jobs, then we have a whole other class of problems that will take years and lots of money to resolve – not just a few quarters.
HARI SREENIVASAN: All right, Nela Richardson joining us from Washington from Bloomberg. Thanks so much.
NELA RICHARDSON: Thank you.