A fundamental shift is taking place in the U.S. economy. In fact, this transition is rapidly picking up momentum and is in danger of becoming an avalanche. The percentage of full-time jobs in our economy is steadily declining and the percentage of part-time jobs is steadily increasing. This is not a recent phenomenon, but now there are several factors which are accelerating this trend. One of them is Obamacare. The truth is that Obamacare actually gives business owners incentive to cut hours and turn full-time workers into part-time workers, and according to the Wall Street Journal and other prominent publications this is already happening all over the United States. Perhaps this is part of the reasons why the U.S. economy actually lost 240,000 full-time jobs last month.
In a recent article entitled “Restaurant Shift: Sorry, Just Part-Time“, the Wall Street Journal explained the choices that employers are faced with thanks to Obamacare…
The Affordable Care Act requires employers with 50 or more full-time equivalent workers to offer affordable insurance to employees working 30 or more hours a week or face fines. Some companies have said the requirement could increase their costs significantly, although others have played down the potential hit.
The cost for small firms to comply with the health law will depend largely on the number of additional full-time employees that sign up for employer-sponsored coverage. Average annual premiums for employer-sponsored health insurance in 2012 were $5,615 for single coverage and $15,745 for family coverage, according to the Kaiser Family Foundation. That is up from $3,083 and $8,003, respectively, in 2002.
Thankfully the implementation of this aspect of Obamacare was recently delayed, but a lot of employers are saying that it won’t make a difference. They know that it is coming at some point, and so they are already making the changes that they feel they will need to make in order to comply with the law…
Restaurant owners who have already begun shifting to part-time workers say they will continue that pattern.
“Does the delay change anything for us? Absolutely not,” Mr. Adams of Subway said, explaining that whether his health-care costs go up next year or in 2015, he will have to comply with the law. “We won’t start hiring full-time people.”
This is very sad, because we have already been witnessing a steady erosion of “breadwinner jobs” in this country.
It is very, very difficult to support a family if you just have a part-time job or a temp job. But those are the jobs that our economy is producing these days.
In fact, if you can believe it, the second largest employer in the United States is now a temp agency. Kelly Services is actually the second largest employer in the country after Wal-Mart.
Isn’t that crazy?
And full-time employment continues to lag far, far behind part-time employment. The number of part-time workers in the United States recently hit a brand new all-time record high, but the number of full-time workers remains nearly 6 million below the old record that was set back in 2007.
For much more on this, please see my previous article entitled “15 Signs That The Quality Of Jobs In America Is Going Downhill Really Fast“.
At this point, employees are increasingly considered to be expendable “liabilities” that can be dumped the moment that their usefulness is over.
For example, employees at one restaurant down in Florida were recently fired by text message…
It’s bad enough losing your job, but more than a dozen angry employees say they were fired from a central Florida restaurant via text message.
Employees at Barducci’s Italian Bistro said they lost their jobs without notice after the restaurant suddenly closed and are still waiting for their paychecks.
This shift that we are witnessing is fundamentally changing the relationship between employers and employees in the United States. The balance of power has moved very much toward the employers.
Most employers realize that there is intense competition for most jobs these days. If you get tired of your job, your employer can easily go out and find a whole bunch of other people who would be thrilled to fill it.
So why has the balance of power shifted so dramatically?
Well, for one thing we have allowed millions upon millions of good paying jobs to be shipped out of the country. Now American workers literally have to compete for jobs with workers on the other side of the planet that live in nations where it is legal to pay slave labor wages.
This should have never happened, but voters in both major political parties kept voting for politicians that were doing this to us.
Now we all pay the price.
Another factor is the rapid advancement of technology.
These days, businesses are trying use machines, computers and robots to automate just about everything that they can. The following example comes from a recent Business Insider article…
On a windy morning in California’s Salinas Valley, a tractor pulled a wheeled, metal contraption over rows of budding iceberg lettuce plants. Engineers from Silicon Valley tinkered with the software on a laptop to ensure the machine was eliminating the right leafy buds.
The engineers were testing the Lettuce Bot, a machine that can “thin” a field of lettuce in the time it takes about 20 workers to do the job by hand.
The thinner is part of a new generation of machines that target the last frontier of agricultural mechanization — fruits and vegetables destined for the fresh market, not processing, which have thus far resisted mechanization because they’re sensitive to bruising.
So what happens when the big corporations that dominate our economy are able to automate everything?
What will the rest of us do?
How will the middle class survive if they don’t need us to work for them?
Over the past couple of centuries, we have witnessed several fundamental shifts in our economy.
Once upon a time, a very high percentage of Americans worked for themselves. There were millions of farmers, ranchers, small store owners, etc.
But then the industrial revolution kicked in to high gear and big corporations started to gain more power. Millions of Americans went to work for these big corporations, but it was okay because they paid us good wages to work in their factories and the middle class thrived.
Unfortunately, the big corporations have realized that things have changed and that they don’t really need us anymore. They can replace us with technology or with super cheap labor overseas.
So that leaves the rest of us in quite a quandry. Very few of us own our own businesses. In fact, the percentage of self-employed workers in the United States is at an all-time record low. And the number of us that are needed by the monolithic corporations that dominate our system is dropping by the day.
All of this is very bad news for the middle class. The only thing that most of us have to offer is our labor, and the value of our labor is continually declining.
Unless something dramatic happens, the future of the middle class looks very bleak.
As the number of good jobs continues to decline, the number of Americans that cannot take care of themselves without government assistance continues to explode. On Friday, we learned that the U.S. economy added “195,000 jobs” last month. But when you look deeper at the numbers, another story emerges. Last month, the U.S. economy actually lost 240,000 full-time jobs. Overall, the U.S. economy has only added 130,000 full-time jobs in 2013, but it takes about 90,000 full-time jobs a month just to keep up with population growth. So we are losing quite a bit of ground as far as full-time jobs are concerned. Meanwhile, the U.S. economy has added more than 500,000 part-time jobs so far this year. Unfortunately, there are very, very few part-time and temp jobs that can be considered “breadwinner jobs”. Part-time jobs are great for teenagers, university students and elderly people that only want to work a limited number of hours, but what most Americans need are good paying full-time jobs with benefits that will allow them to take care of their families. Unfortunately, those jobs are continually becoming a smaller part of our economy.
As David Stockman has noted, the U.S. economy has only regained 200,000 of the 5.6 million breadwinner jobs that were lost during the last recession…
By September 2012, the S&P 500 was up by 115 percent from its recession lows and had recovered all of its losses from the peak of the second Greenspan bubble. By contrast, only 200,000 of the 5.6 million lost breadwinner jobs had been recovered by that same point in time. To be sure, the Fed’s Wall Street shills breathlessly reported the improved jobs “print” every month, picking and choosing starting and ending points and using continuously revised and seasonally maladjusted data to support that illusion. Yet the fundamentals with respect to breadwinner jobs could not be obfuscated.
This is a big problem. As I wrote about the other day, the quality of jobs in America is falling very fast. Only 47 percent of all adults in the United States have a full-time job at this point, and 53 percent of all American workers make less than $30,000 a year.
Meanwhile, the number of part-time jobs has hit an all-time record high, and the number of temp jobs is absolutely exploding.
Incredibly, the number of temp jobs has increased by more than 50 percent since the end of the recession. Approximately 10 percent of the jobs lost during the last recession were temp jobs, but close to 20 percent of the jobs gained since then have been temp jobs.
We are witnessing a fundamental shift in our economy. Full-time jobs are on the decline. Part-time and temp jobs are on the rise.
In fact, the second largest employer in the United States is now a temp agency. Kelly Services has become the second largest employer in the country after Wal-Mart.
But it is really hard to pay the bills stocking shelves at Wal-Mart or working temp jobs for Kelly Services.
Unfortunately, these days millions of American workers find themselves having to take whatever they can find. We live during a period of chronic unemployment. In fact, according to John Williams of shadowstats.com, unemployment in the United States is now higher than it was at any point during the last recession after you factor in discouraged workers and workers that have taken part-time jobs for economic reasons.
So why don’t more Americans go out and start businesses and create their own jobs?
Unfortunately, thanks to the federal government, state governments and local governments, the environment for small businesses in America today is incredibly toxic. In fact, the percentage of self-employed workers in this country is at an all-time record low.
As a result of everything that I have discussed above, more Americans than ever find that they cannot take care of themselves without government assistance.
I have often written about the fact that the number of Americans on food stamps has skyrocketed in recent years. In the year 2000, there were only 17 million Americans on food stamps. Today, there are more than 47 million Americans on food stamps.
But the number of Americans that are dependent on our “modern day bread lines” is actually far higher than that.
According to a recent CNS News article, a total of 101 million Americans are enrolled in food assistance programs. The following are some of the staggering numbers for some of these programs…
The National School Lunch program provides 32 million students with low-cost or no-cost meals daily; 10.6 million participate in the School Breakfast Program; and 8.9 million receive benefits from the Woman, Infants and Children (WIC) program each month, the latter designed for low-income pregnant, breastfeeding, and postpartum women, as well as children younger than 5 years old.
In addition, 3.3 million children at day care centers receive snacks through the Child and Adult Care Food Program.
There’s also a Special Milk Program for schools and a Summer Food Service Program, through which 2.3 million children received aid in July 2011 during summer vacation.
At farmer’s markets, 864,000 seniors receive benefits to purchase food and 1.9 million women and children use coupons from the program.
Yes, there is some overlap in some of these programs. So the actual number of Americans receiving food assistance is going to be less than 101 million.
But clearly something has gone horribly wrong. Our economy is not producing enough good jobs, and more Americans than ever cannot take care of themselves as a result.
This is not normal. What we are witnessing is the slow-motion collapse of the middle class. The number of Americans that are dependent on the government for their daily bread is so large that it is difficult to comprehend. The following are a few statistics from my recent article entitled “21 Facts About Rising Government Dependence In America That Will Blow Your Mind“…
-Back in the 1970s, about one out of every 50 Americans was on food stamps. Today, about one out of every 6.5 Americans is on food stamps.
-Today, the number of Americans on food stamps exceeds the entire population of the nation of Spain.
-According to one calculation, the number of Americans on food stamps now exceeds the combined populations of “Alaska, Arkansas, Connecticut, Delaware, District of Columbia, Hawaii, Idaho, Iowa, Kansas, Maine, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Dakota, Oklahoma, Oregon, Rhode Island, South Dakota, Utah, Vermont, West Virginia, and Wyoming.”
You can read the rest of that article right here.
So what is the solution?
Well, we need a lot more full-time “breadwinner jobs” that will enable men and women to be able to take care of their families.
Unfortunately, we continue to ship millions of good jobs overseas, and our politicians continue to pursue policies which are making the business environment in this country very toxic.
There is not going to be any easy way to fix all of this. We should have seen a nice bounce in the employment numbers during this so-called “recovery”, but that did not happen. And now the next wave of the economic collapse is rapidly approaching, and the employment crisis in this country is going to become a lot more painful.
There was a time in America when virtually anyone that wanted a job could go out and get one and the United States boasted the largest and most prosperous middle class in the history of the world. Sadly, those days are long gone. Back in 1969, 95 percent of all men between the ages of 25 and 54 had a job. But now there are millions of Americans in their prime working years that cannot find a job. Millions of others are working low wage jobs or part-time jobs because that is all they can get. The other day I went to a large retail store and I got into a conversation with the lady who was checking me out. She said that she had worked professional jobs all her life, and that she had taken this job to tide her over as she searched for a new job, but now she had been there for two years with no end in sight. I felt really bad for her, because she was obviously a sharp lady with a lot of skills. But this is the new reality. Good paying manufacturing and professional jobs are being replaced by low paying service jobs. We are transitioning from an economy with plenty of good jobs to an economy with plenty of bad jobs. The next stage in our transition will be to an economy where it seems like there are no jobs for anyone. We are witnessing the tragic downfall of the American worker, and it is heartbreaking.
Many of our politicians insist that things are getting better for American workers, but that is simply not true. Just look at the chart below. Back at the start of 2008, the percentage of working age Americans with a job was sitting at about 63 percent. Since then it has fallen below 59 percent and it has stayed there for over 3 years. After every other recession in the post-World War II era the employment-population ratio has always bounced back. That has not happened this time…
If this number was going to recover, it would have done so by now. We are rapidly approaching the next major economic crisis and the percentage of working age Americans with a job is going to go even lower.
And our politicians are certainly not helping matters. Many of the things that they have done are actually going to accelerate the loss of good jobs. For example, as one small business owner recently pointed out, Obamacare is going to force businesses all over the United States to minimize the number of full-time workers they are using and replace them with part-time workers…
Here is what I am doing for the rest of the year — working with every manager in my company so that as of January 1, 2013, none of our employees are working more than 28 hours a week. I think most readers know the reason — we have got to get our company under 50 full time employees or else I am facing a bill from Obamacare in 2014 that will be several times larger than my annual profit. I love my workers. They make me a success. But most of my competitors are small businesses that are exempt from the Obamacare hammer. To compete, I must make sure my company is exempt as well. This means that our 400+ full time employees will have to be less than 50 in 2013, so that when the Feds look at me at the start of 2014, I am exempt. We will have more employees working fewer hours, with more training costs, but the Obamacare bill looks like about $800,000 a year for us, at least, and I am pretty sure the cost of more training will be less than that.
This will be unpopular but tolerable to most of my employees. The vast majority of them are retired and our company is merely an excuse to stay busy, work outdoors, and get a little extra money.
But this is going to be an ENORMOUS change in the rest of the service sector. I have talked to a lot of owners of restaurants and restaurant chains, and the 40-hour work week is a thing of the past in that business. One of my employees said that in Hawaii, it was all the hotel employees could talk about. Many chains are working on mutli-team systems where two teams of people working part-time replace the former group of full-time employees. 2013 is going to see a lot of people (who are not paid very well to begin with) getting their hours and pay cut by 25%. At the same time that they are required, likely for the first time since many are relatively young, to purchase health insurance.
How could we be so foolish?
Unfortunately, this is not something new. Our economy has been replacing good jobs with bad jobs for quite some time. If you can believe it, 60 percent of the jobs lost during the last recession were mid-wage jobs, but 58 percent of the jobs created since then have been low wage jobs.
Will nearly all of us eventually be working in fast food restaurants or stocking shelves at retail giants like Wal-Mart?
Amazingly, the United States actually has a higher percentage of workers doing low wage work than any other major industrialized nation does.
No wonder our middle class is being absolutely destroyed.
At this point, wages as a percentage of GDP are at an all-time low in America. As millions more good jobs are shipped out of the country, the competition for the remaining jobs will become incredibly fierce and that number will get even lower.
Many Americans that actually do have jobs right now find that they simply don’t make enough to take care of themselves and their families. They are called “the working poor”, and their ranks are growing steadily. Today, about one out of every four workers in the United States brings home wages that are at or below the federal poverty level.
American households are getting poorer at a time when prices continue to rise. Median household income in America has declined for four years in a row. Overall, it has fallen by over $4000 during that time span.
But have the prices in the stores declined?
Of course not.
No wonder middle class families are feeling more financial stress than ever before. A survey conducted by the Pew Research Center found that 85 percent of middle class Americans say that it is harder to maintain a middle class standard of living today than it was 10 years ago.
The transition from good jobs to bad jobs in our economy has been taking place for a very long time, and it is not going to be reversed overnight. Back in 1980, less than 30% of all jobs in the United States were low income jobs. Today, more than 40% of all jobs in the United States are low income jobs. There are less tickets to the middle class than there used to be, but neither political party seems interested in stopping the flow of good jobs out of the country.
If we keep doing the same things that we have been doing, we will continue to get the same results.
When I was young, I was told that there would always be “good jobs” available for anyone that got a good education and that worked hard.
What a crock of baloney that turned out to be.
According to a paper that was recently released by the Center for Economic and Policy Research, only 24.6 percent of all jobs in the United States qualify as “good jobs” at this point.
In a previous article, I detailed the three criteria that they used to define what a “good job” is….
#1 The job must pay at least $18.50 an hour. According to the authors, that is the equivalent of the median hourly pay for American workers back in 1979 after you adjust for inflation.
#2 The job must provide access to employer-sponsored health insurance, and the employer must pay at least some portion of the cost of that insurance.
#3 The job must provide access to an employer-sponsored retirement plan.
More than 75 percent of all jobs in the U.S. today are not “good jobs”, and things are not looking promising for the future.
No wonder so many families are barely surviving these days. Right now, approximately 77 percent of all Americans are living paycheck to paycheck at least some of the time. That is a dreadful number.
But if you still do have a job, you should consider yourself to be fortunate.
There are millions upon millions of Americans out there without any job at all.
Did you know that 53 percent of all Americans with a bachelor’s degree under the age of 25 were either unemployed or underemployed during 2011?
Hordes of fresh college graduates are entering the marketplace each year only to find that the good jobs that they were promised simply are not there.
And now it looks like things are getting even worse. This week Citigroup announced that it plans to eliminate 11,000 jobs in an attempt to reduce costs. But Citigroup is far from alone. We have seen dozens of major layoff announcements since the election. If you doubt this, just see this article and this article.
It is time to wake up and admit that our economy is in an advanced state of decline, that we need to quit shipping our jobs out of the country, and that what we are doing now is clearly not working.
If we are “the greatest economy on earth”, then why are approximately 48 percent of all Americans either considered to be “low income” or are living in poverty?
We need to return to the principles that our Founding Fathers founded this country on or else things are going to get a lot worse and people are going to get very, very angry.
Our politicians have been pitting different groups of people against one another and many of them have been blaming the wealthy for all of our problems. Never before in my lifetime have I seen so much anger directed toward those that have money. This anger is even being expressed in ways that you would not normally expect. For example, the California Federation of Teachers recently produced a video that portrays wealthy people peeing on poor people. That shocked me.
Eventually, all of this anger is going to lead to violence if we are not careful. When the next major wave of the economic crisis strikes and unemployment gets significantly worse, I fear for what might happen. I believe that it is very possible that we may see mobs of struggling people storm into wealthy neighborhoods and play “Robin Hood” with their possessions.
Instead of hating one another, we need to return to the principles that once made our economy so great. Those principles would enable everyone to prosper.
Unfortunately, this country continues to turn away from those principles and hate and anger continue to grow.
If we continue down this path, the end result is going to be a complete and total nightmare.
It is possible to turn this economy around. But we can’t do the same things that we have been doing. We have to start making better decisions.
Do you need a good job? If so, there are millions of other Americans that are just like you. Unfortunately, most of the jobs that are available in America today are either part-time jobs, temp jobs or are “independent contractor” jobs. The “full-time job with benefits” is a dying breed. There are so many desperate unemployed workers in America today that companies don’t have to roll out the red carpet anymore. Instead, they can just hire a horde of inexpensive part-timers and temps that they don’t have to give any benefits to. But isn’t the employment situation supposed to be getting better? No, it really is not. Yes, the U.S. economy added 216,000 jobs in March. However, the truth is that approximately 290,000 part-time jobs were created and about 80,000 full-time jobs were actually lost. This is all part of a long-term trend in America. Good jobs are rapidly disappearing and they are being replaced by low paying service jobs that do not pay a living wage. In many American households today, both parents have multiple jobs. Yet a large percentage of those same households can’t even pay the mortgage and are drowning in debt.
Whenever a new government jobs report comes out from now on, try to find out how many of the jobs that were created were actually part-time jobs. Most Americans that only have part-time jobs are living around or below the poverty line. The truth is that it is really hard to get by if you are only making a couple hundred bucks a week.
As mentioned above, the U.S. economy added 216,000 jobs last month. The Obama administration and the mainstream media heralded that figure as evidence that the U.S. economy is recovering nicely.
But is that really accurate?
Rebel Cole, a professor at DePaul University’s Kellstadt Graduate School of Business, says that when you take the time to do a closer examination of the employment numbers they don’t look so good….
“If you look deeper in the report, there were 290,000 new part-time workers, which means that there were 80,000 fewer full-time workers, that’s not a good sign. Things are getting worse, not getting better.”
Unless you are a teen or a college student or a retired person, most likely you would prefer to be working a full-time job. Most people do not actually have the goal of working part-time. Most part-time jobs pay very poorly and offer very few benefits.
Unfortunately, that is why so many big companies like part-time workers and temp workers. There are so many more rules, regulations and laws that pertain to full-time workers.
Hiring a bunch of part-time workers is so much easier and so much cheaper. Without a doubt it is definitely more profitable in most situations.
Today, there are millions of Americans that have part-time jobs that would love to have full-time jobs. In fact, the government says that there are about 8 million Americans that are currently working part-time jobs for “economic reasons”.
One such worker named “John” recently left a comment on another article I did entitled “How To Find A Job: Just Be Willing To Flip Burgers And Work For Minimum Wage“. John says that the restaurant chain that he works for has implemented a “part-time only policy”….
“Could your family survive on $505 a week?”
If only I could make HALF that much! The dirty secret is McDonalds needs to add 50,000 workers to increase the headcount in every store. The goal is to have no full-time employees who qualify for health benefits. So these 50,000 jobs will pay $174 a week BEFORE taxes, and have no benefits, no vacation days, no holidays off, call in sick and get fired, but they will have 52 mandatory weekends each year.
And how do I know this? I work for a national restaurant chain that already has gone to a part-time only policy. I am scheduled for 23 hours next week. The threshold for benefits is 26 hrs.
Of course I would assume that there are perhaps a couple of full-time workers at the restaurant that John works at (such as the manager). But the reality is that we are seeing this kind of thing more and more around the nation. Companies are being careful to keep hours low enough so that the majority of their employees do not qualify for expensive “full-time benefits”.
Another commenter on that same article said that it is possible to get by on a low wage but that doesn’t mean that it is easy….
I make about $400 a week; my wife nothing. Rent is $500 a month. Credit card bills (run up back when I made about $1200/week) run about $200 a month. Other expenses run us another few hundred dollars. We quit tv. We’re a litte cold. We eat ok. Try to fill the gas tank just once a month. We’re getting by, but able to save nothing, nor do we go out and have fun. Well, fun has become walks on Saturday morning. Those are free. And, as we’ve learned, rather nice.
$10 an hour stinks, but it is livable if you don’t mind admitting that you are poor. I know I’m poor now. It’s just the way it is. If I tried to keep living as i did when I was a middle class manager, I’d be extremely unhappy. I cant say I’m happy about being poor, but my wife and i are finding that happiness isn’t about having “stuff.”
This is the new “American Dream” for millions of American families. They are learning to scratch and claw to get by on what they have.
As I have written about previously, the standard of living of the middle class is being pushed down to third world levels. We have been merged into a “global labor pool”, and what that means is that the standard of living of all workers all over the world is going to be slowly equalized over time.
Translation: your standard of living and the standard of living of virtually everyone that you know is slated to go way down.
Right now America is rapidly losing high paying jobs and they are being replaced by low paying jobs. According to a recent report from the National Employment Law Project, higher wage industries accounted for 40 percent of the job losses over the past 12 months but only 14 percent of the job growth. Lower wage industries accounted for just 23 percent of the job losses over the past 12 months and a whopping 49 percent of the job growth.
So yes, jobs are being created, but most of them are jobs that none of us would really want under normal circumstances.
Unfortunately, times are not normal and millions of desperate people are having to take whatever they can get.
What makes things even worse is that really bad inflation is coming. There are less good jobs for American families and at the same time the cost of basic necessities is going up.
Have you been to the gas pump lately?
As I wrote about yesterday, the average price of a gallon of gasoline in the United States is now $3.70.
A year ago it was just $2.83.
For average American families on a tight budget that is a huge difference.
Food inflation is already here as well.
During the month of February, the price of food in the U.S. increased at the fastest rate in 36 years.
Are you starting to understand why so many American families are feeling squeezed right now?
Times are tough and they are going to get tougher. If you still have a good full-time job you should be very thankful, because there are millions and millions of people that would love to trade places with you.
So do the rest of you believe that America is turning into “the land of the part-time job”? Please feel free to leave a comment with your opinion below….