You Want Fries With That: Is This Job Growth Sustainable?
Is the recovery going to be characterized by programmers who have been out of work getting new jobs as programmers—or new jobs flipping burgers?
While the manufacturing sector expanded in March, according to the monthly report from trade group the Institute for Supply Management, the surprise in recent data has been significant gains in the service industry. That poses clear risks for the Obama administration’s vision of a sustainable economy.
The service industry is an economic term for sectors that are not goods-producing—and that segment's growth raises some interesting questions about the recovery. Can a service-based economy remain sustainable, and under what parameters can it do so? And do new positions tend to be as high quality in terms of pay and workers' rights as those lost during the recession?
Whether the non-manufacturing gains are sustainable depends on the breakdown of new positions. The latest data from the Department of Labor Statistics, for example, shows gains in leisure and hospitality services, in addition to professional and manufacturing. And while eating and drinking establishments certainly need a core of workers, the second two seem like a more stable foundation for recovery.
“The recovery of the U.S. economy continues, but the pace of expansion has been uneven and modest by historical standards,” Federal Reserve chairman Ben Bernanke said during a recent appearance before Congress. “The job gains in recent months have been relatively widespread across industries. However, the fundamentals that support spending continue to be weak.”
The other issue—of whether recovery-era jobs are as high caliber as pre-recession jobs—is more complex. Recent numbers suggest that after accounting for taxes and inflation, income isn't rising during the recovery.
A minor employment niche that has shown significant growth since the recession—which, in fact, scarcely existed before it—is mobile app design, which now accounts for some 466,000 jobs in the United States, according to a recent study. The success of that narrow segment, though, can be read as a cautionary tale against outsourcing skilled labor to cheaper markets in bulk.
The Institute for Supply Management's manufacturing report showed modest growth in manufacturing sectors in February, which was the 33rd consecutive month of overall economic growth, with the much-touted auto industry continuing to pick up steam.
“There seems to be a much more positive outlook for the economy,” wrote an unsourced respondent in the fabricated metal products industry. “Customers are ordering material for stock rather than just working hand-to-mouth.”
Jon Christian is a reporter with Campus Progress. Follow him on Twitter @Jon_Christian.
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