Why 2015 Job Growth Doesn’t Necessarily Equal Financial Security Resources

On the surface, the latest employment data from the U.S. Bureau of Labor Statistics paints a pretty picture. In May, the U.S. economy added 280,000 jobs, and while unemployment rose slightly to 5.5 percent, this was for a positive reason: More people began actively looking for work, and as would be expected, not everyone was successful.

Major gains were made in leisure sectors, as well as health care, retail, hospitality, and construction, but as the AP reports, many Americans are finding part-time, freelance, and temporary work. What’s more, productivity has decreased, which means workers are producing less an hour and preventing the country from enjoying all the benefits that normally accompany robust job growth.

Over the first three months of 2015, American productivity dropped 3.1 percent, marking the first time in more than eight years that it’s dipped in back-to-back quarters. Were productivity higher, the AP explains, employers could increase wages without having to boost the price of their goods and services. Ever since the recession, many companies have been reluctant to invest in computers and other equipment that would help workers produce more per hour.

“The concern is that there is no way to produce this many jobs in a slow economy without simultaneously having poor productivity growth,” said economist Douglas Holtz-Eakin, who serves as president of the American Action Forum. “Over the long term, the absence of productivity growth is bad for workers and firms alike.”

Relative to before the recession, more of today’s part-time workers say they’d prefer to be working full-time, and in the last year, the number of self-employed Americans has risen by 1.6 million. While some of these individuals are high-price consultants making healthy livings, a great many are freelancers “cobbling together livelihoods from piecemeal work,” according to the AP.

The reason for the jump in freelancers: Companies have an incentive to cut costs by hiring on a project-by-project basis. This is good news for workers who value flexibility, as the AP reports, but it doesn’t fosters stability, and freelance work doesn’t come with benefits. What’s more, it requires people to keep track of earnings and pay taxes on their own.

“More people may be working jobs, but they’re like these serial part-time jobs,” said Allison, a 54-year-old Los Angeles woman who’s been struggling to find temp work since being laid off as a kindergarten teacher. “They’re not life-supporting jobs.”


Leave a Reply

Your email address will not be published. Required fields are marked *