- by New Deal democrat
I haven't had enough time to clean up some draft posts this week, one of which is about the relative strength in this recovery in terms of low wage jobs vs. high wage jobs. Is this recovery unique in that regard, or is it similar to past recoveries?
I figured there would be a Doomer post or two at the usual suspects,and I had hoped to already have the main research done before they weighed in, but I haven't had the time. So, earlier this week Mark Thoma had a brief piece up, and I had an exchange with commenter Anne on the topic. I'm just going to repost the comments here for now:
NDD: Is this recovery actually any different than other post World War 2 recoveries in terms of creating low wage jobs before high wage jobs? I looked at a few post-war recoveries and it looked like the same pattern was followed, but full employment returned quickly so the initial shortfall in higher paying jobs wasn't noticed. Dean Baker seems to be making a similar point in response to the NYT article; namely, it's the shortfall from fulll employment that is responsible for the prevalance of lower paying jobs.
I'm asking the above as a real question, rather than making a statement. If somebody can compare this recovery vs. other post WW2 recoveries in terms of the order of the return of low vs. high paying jobs, I'd be very interested in what they find.
NDD: OK, I've compared construction vs. retail employment as proxies for high and low wage jobs. I used construction since, unlike manufacturing, it can't all be offshored.
Here's what I found. Beginning with the 1957 recession, in every recession except the 2001 recession, retail employment returned to its previous high sooner than construction employment, by as little as 2 months and as much as 62 months! The exception was that after 2001, construction returned to its previous high 7 months ahead of retail.
Needless to say, neither has returned to its pre-Great Recession high, although retail is closer. If these are fair proxies, this supports the idea that the current lag in high paying jobs is a question of intensiy, and is not different in kind from most post WW2 recessions.
Anne: Having now looked carefully at the data from this perspective, I agree. Again, well done. The problem is evidently general demand, not the structure of demand, which makes sense.
I'll have a lot more to say on this issue in the next few weeks or so, because I have a lot of number crunching to do.
For now, the question to Meteor Blades and all of the Doomers at Daily Kos is,
How does the structure of demand (low wage vs. high wage jobs) stack up since 2009 ...
- vs. 1948?
- vs. 1954?
- vs. 1957?
- vs. 1960?
- vs. 1970?
- vs. 1974?
- vs. 1980?
- vs. 1982?
- vs. 1990?
- vs. 2001?
Has this recovery uniquely produced more low paying jobs? Or, like prior recoveries (as to construction vs. retail jobs at least), is the recovery in low paying jobs simply taking place more quickly than the recovery in high paying jobs? Put another way, is this recovery different in kind or just different in intensity? Until you can answer that question, you really don't have a clue about whether this recovery is different from any other recovery in terms of how quickly it has produced low paying jobs vs. high paying jobs.
But don't disturb the echo chamber by forcing them to do some actual comparisons. Spoils all the fun in DOOOOMMM.