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novapsycheU.S. market sees major decline in job quality
The U.S. labour market -- while finally experiencing increases in job creation -- has also seen a dramatic drop in employment quality, with low-paying jobs elbowing aside higher-paying ones, CIBC World Markets said yesterday.
The brokerage's employment quality index -- which measures the overall tone of the market by looking at things such as compensation, job stability and the mix of full-time and part-time employment -- fell by eight points between 2001 and 2004, a decline CIBC called dramatic.
The slide occurred largely because of the "swapping of high-paying for low-paying jobs" with gains coming from traditionally lower-paying sectors like hospitality and education, while better-paying jobs in areas such as transportation, manufacturing and natural resources disappeared, CIBC said.
The brokerage also found that the average wage in sectors that gained jobs over the past three years was 30 per cent lower than the average wage in industries that lost jobs.
As well, the brokerage noted that the number of jobs in high-paying industries fell by more than 2 per cent since the current economic recovery got under way in late 2001.
By comparison, the number of jobs in low-paying industries rose by 1.2 per cent during the same period.
"The message is clear," CIBC World Markets economist Benjamin Tal said. "The vast majority of jobs that evaporated during the 'job-loss' recovery were high-quality jobs."
Between early 2001 and early 2004, the U.S. employment market shed roughly two million jobs as the labour market remained weak even as the broader economy improved. By March, however, the picture began to brighten with the U.S. economy producing more than 300,000 new jobs.
The next round of employment numbers -- measuring June's hiring levels -- are due next week. Economists polled by Briefing.com are expecting to see non-farm payrolls swell by another 240,000 positions, following a gain of 248,000 in May.
On average, the U.S. economy has now generated 240,000 new positions a month so far in 2004.
Since early 2002, however, part-time employment growth has outpaced that of full-time hiring, climbing by 5.2 per cent, CIBC said.
At the same time, the number of people self-employed rose by 5 per cent, well ahead of the 1.7-per-cent growth among regular employees.
"On average, self-employment jobs pay less -- roughly 80 per cent of regular employee's compensation -- and are less stable," the report noted. "What's more, given the nature of the recent [employment] cycle, many of those new 'entrepreneurs' were forced into self-employment due to the lack of alternatives."
CIBC also found that, given the current employment distribution, it will take roughly 20 per cent more jobs than in the last economic expansion to generate the same salary gains.
I stand corrected: Quality of new jobs a matter of debate
The U.S. labour market -- while finally experiencing increases in job creation -- has also seen a dramatic drop in employment quality, with low-paying jobs elbowing aside higher-paying ones, CIBC World Markets said yesterday.
The brokerage's employment quality index -- which measures the overall tone of the market by looking at things such as compensation, job stability and the mix of full-time and part-time employment -- fell by eight points between 2001 and 2004, a decline CIBC called dramatic.
The slide occurred largely because of the "swapping of high-paying for low-paying jobs" with gains coming from traditionally lower-paying sectors like hospitality and education, while better-paying jobs in areas such as transportation, manufacturing and natural resources disappeared, CIBC said.
The brokerage also found that the average wage in sectors that gained jobs over the past three years was 30 per cent lower than the average wage in industries that lost jobs.
As well, the brokerage noted that the number of jobs in high-paying industries fell by more than 2 per cent since the current economic recovery got under way in late 2001.
By comparison, the number of jobs in low-paying industries rose by 1.2 per cent during the same period.
"The message is clear," CIBC World Markets economist Benjamin Tal said. "The vast majority of jobs that evaporated during the 'job-loss' recovery were high-quality jobs."
Between early 2001 and early 2004, the U.S. employment market shed roughly two million jobs as the labour market remained weak even as the broader economy improved. By March, however, the picture began to brighten with the U.S. economy producing more than 300,000 new jobs.
The next round of employment numbers -- measuring June's hiring levels -- are due next week. Economists polled by Briefing.com are expecting to see non-farm payrolls swell by another 240,000 positions, following a gain of 248,000 in May.
On average, the U.S. economy has now generated 240,000 new positions a month so far in 2004.
Since early 2002, however, part-time employment growth has outpaced that of full-time hiring, climbing by 5.2 per cent, CIBC said.
At the same time, the number of people self-employed rose by 5 per cent, well ahead of the 1.7-per-cent growth among regular employees.
"On average, self-employment jobs pay less -- roughly 80 per cent of regular employee's compensation -- and are less stable," the report noted. "What's more, given the nature of the recent [employment] cycle, many of those new 'entrepreneurs' were forced into self-employment due to the lack of alternatives."
CIBC also found that, given the current employment distribution, it will take roughly 20 per cent more jobs than in the last economic expansion to generate the same salary gains.
I stand corrected: Quality of new jobs a matter of debate