Don’t Go Gaga over the Employment Picture

Look, I think it is great that the economy is adding nearly 300,000 jobs per month. We really do need that. But let’s keep in mind the fact that the type of jobs being created are not the type we want:

The numbers seem terrific: a whopping 295,000 new jobs created in February, with 3.3 million new jobs added during the last 12 months. The pace of job creation now is comparable to the pace of the late 1990s, when the economy was booming.

These are not boom times, however, and the fine print in the job numbers and other economic data helps explain why. The biggest problem is that new jobs being created pay less, on average, than jobs lost during the last several years. That’s depressing middle-class living standards. We’re also likely to see more evidence soon that plunging oil prices are causing job losses in the energy sector, which until recently was one of the brightest spots in the whole U.S. economy.

Overall job trends are clearly positive, and lower energy prices will do a lot more good than harm, since the typical American family is saving about $100 a month by forking over less for gasoline and other types of fuel. But the realignment of the job market due to the combined effects of globalization and digital technology could cause stress on the middle class for years, no matter how strong the aggregate number of new jobs is.

I’d like to think that the increased pace of job creation heralds very good economic times. Perhaps it does. But when I wrote in the past that we have a long way to go before the employment picture can truly be considered a bright one, I wasn’t kidding.