The 162,000 jobs created in July should inspire no great enthusiasm about the current economy, but that at least 70 percent of the jobs created so far in 2013 are part-time is even grimmer news for the U.S. worker. When the nation is still struggling to add jobs after the Great Recession, many American families need much more than part-time work.
Digging into employment data uncovers more bad news. While the employment-population ratio has edged up for high-school dropouts, so has the unemployment rate. In July, those without high-school diplomas had a seasonally adjusted unemployment rate of 11 percent. The unemployment rate of those with just a high-school diploma remains 7.6 percent, twice that of college graduates. And, of those jobs that have been created, many are in lower-paid fields.
According to Bureau of Labor Statistics data, about half the new jobs created in July were in retail (47,000) and food services (38,000).The past few weeks have seen the heightening of concerns over a sustained stagnation in the employment picture. McDonald’s incited a media brouhaha a few weeks ago when it released a suggested monthly budget for a generic worker at the Golden Arches. In addition to presuming unrealistically low expenses in various categories (such as $20 a month for health insurance), this budget also has the average worker work two part-time jobs in order to scrape together a barely livable income. Last week, fast-food workers demonstrated across the country for increased wages.
These are real concerns, and they are not exclusive to fast-food kitchens. They reflect an economy where growth has slowed to a crawl and where many workers find themselves clinging desperately to any rung in the job market. Nearly 20 percent of workers are part-time employees. A hoary myth is that the minimum wage is “meant” only for young people and those just starting out in the workforce, but, as the Heritage Foundation has shown, about half of those working federal-minimum-wage jobs are over the age of 25. And there are plenty of workers struggling at just above minimum wage.
The Great Recession threw millions off private payrolls, and many of those millions linger in some twilight of unemployment and part-time work (if they have not totally dropped out of the labor force). Over 37 percent of those currently unemployed have been unemployed for over 27 weeks. Meanwhile, the flawed implementation of Obamacare has further incentivized hiring part-time workers instead of full-timers. Trade policies and a continued influx of illegal immigrants have also dampened the incomes and economic opportunities of many workers. Escalating expenses (particularly for health care) have posed additional problems for working-class and middle-class Americans.
This trend toward minimal-hour, minimum-wage employment should concern conservatives for a number of reasons. A breakdown in the ladder of economic opportunity increases human misery. It also slows down economic growth. Shrinking take-home pay diminishes the amount of money available to consumers and, therefore, lowers the demand for various companies’ goods and services. Endlessly cheap labor lowers the demand for technological innovations that can improve everyone’s living standards. The limiting of economic upward mobility makes it harder for Americans of many stripes to realize their dreams and ambitions and to contribute the utmost of their talents to the commonwealth.
This breakdown in opportunity also increases government spending and public intervention in the marketplace, sometimes with disastrous results. It is very likely, for instance, that the slowdown in economic growth in the 2000s encouraged many politicians of both parties to look the other way during the inflation of the housing bubble of the 2000s: Accelerating housing values helped make up for wage stagnation and the other trials of the middle and working classes. Meanwhile, cheap labor might be cheap for the employer, but it is rather expensive for today’s American taxpayer. Every worker struggling at the economic margins adds to the growing appetite for government subsidies, from Medicaid to SNAP to housing programs. For those serious about reducing the deficit, improving the economic circumstances of those at the economic margins (and those in the middle) would be a decisive step forward.
Republicans have an opportunity to confront these issues in the months ahead by laying out a set of policy alternatives. But they need to keep their eyes on the big picture. Many on the right note that an increased minimum wage is far from an economic panacea, but explaining the limits of minimum-wage increases is not enough. Nor is another round of financial brinksmanship over the budget likely to address these concerns fully. Collaborating with the Senate on its immigration bill, which would hurt workers already here, seems unlikely to improve the bargaining power of labor. As neoliberal writer Mickey Kaus has argued, for all the president’s protestations about income inequality, the signature domestic initiative of his second term (his immigration agenda) could very well worsen inequality. There is little reason for Republicans — or, frankly, Democrats — to sign on to that outcome.
Reigniting economic vitality and growth would be a key step to turning around the employment picture. Stronger economic growth could generate an upward demand for workers. A stronger demand increases workers’ opportunities for better employment conditions and higher wages in two ways: It helps workers increase their wages at their current job, and it creates opportunities for workers to move on to higher-paying jobs. When there is a glut of the unemployed, it is easy to fill a staff with part-timers. A tighter labor market due to a strongly growing economy would encourage employers to be more efficient and to invest in new technologies, while also making the labor of the employee a more valuable commodity.
Republicans should put forward specific policies that would increase workers’ wages in real terms and improve the ability of workers to bargain for their labor. They could push toward a more market-oriented health-care system, where individuals find health-care coverage more portable and more affordable. They could promote energy development to make various utilities less expensive. They might consider reforming U.S. trade policy so that it doesn’t facilitate the protectionism of other nations. They could call for the enforcement of immigration laws to prevent further illegal labor and the illegal exploitation of this labor. They could push back against guest-worker programs that pervert the market, make it harder for Americans young and old to find employment, and pose further challenges for workers seeking higher-paying jobs. For longer-term growth, they might propose reforms to strengthen the economic positions of American families and improve the education system. The goal of this new set of policies would be to power economic growth by moving toward a sustainable economic cycle, so that rising incomes for all fund new commercial enterprises and slash government deficits.
Last month’s jobs report continues a saga of diminished expectations: fewer opportunities, lower pay, slower economic growth, and greater hardships for Americans. A set of pro-growth, pro-worker, and pro-opportunity economic policies offers a possible remedy to this situation. Conservatives should be able to say something in response to the real concerns of struggling workers, and it is an electoral imperative for Republicans to do so. To regain its electoral viability, the Republican party should have a message that appeals to struggling workers, and for the success of limited-government policies over the long term, it must put forward policies that will actually help the conditions of these individuals.
— Fred Bauer is a writer from New England. He blogs at A Certain Enthusiasm, and his work has been featured in numerous publications.