{"id":942,"date":"2019-12-10T16:24:10","date_gmt":"2019-12-11T00:24:10","guid":{"rendered":"http:\/\/savingusmanufacturing.com\/blog\/?p=942"},"modified":"2019-12-10T16:24:10","modified_gmt":"2019-12-11T00:24:10","slug":"u-s-private-sector-jobs-have-declined-since-1990","status":"publish","type":"post","link":"https:\/\/savingusmanufacturing.com\/blog\/general\/u-s-private-sector-jobs-have-declined-since-1990\/","title":{"rendered":"U.S. Private Sector Jobs Have Declined since 1990"},"content":{"rendered":"\n

On\nNovember 14, 2019, Cornel Law School \u201cannounced the launch of a new tool for\nevaluating the U.S. employment situation and predicting related variables: the U.S.\nPrivate Sector Job Quality Index (JQI).\u201d The Index described in the White\nPaper<\/a> represents 18 months of research by Daniel Alpert, adjunct professor\nat Cornell Law School and founding managing partner of the investment bank,\nWestwood Capital, LLC, Jeffrey Ferry, chief economist at the Coalition for a\nProsperous America (CPA), Dr, Robert C. Hockett, Professor of Law at Cornell\nLaw School, and Amir Khaleghi, a Research Fellow at the Global Institute for\nSustainable Prosperity (GISP) and a PhD student at the University of\nMissouri\u2013Kansas City.<\/p>\n\n\n\n

At\nthe many economic summits I\u2019ve attended over the past 25 years, I\u2019ve heard\neconomists state that the U. S. is creating more low paying jobs than high\npaying jobs but there hasn\u2019t been any data available to track this trend on a\nregular basis.  For the first time, the Job\nQuality Index provides a tool to measure \u201cdesirable higher-wage\/higher-hour\njobs versus lower-wage\/lower-hour jobs.\u201d<\/p>\n\n\n\n

The\nauthors define job quality as \u201cthe weekly dollar-income a job generates for an\nemployee\u201d They explain that \u201cThe JQI is an analysis of weekly incomes earned by\nthe holders of each of the private sector P&NS jobs in U.S. It derives its\ndata from the hourly wages paid, and hours worked by, holders of jobs in 180\nseparate sectors of the American economy.\u201d<\/p>\n\n\n\n

Since\nthe end of WWII, the \u201cpercentage of private U.S. jobs in the service-providing\nsectors increased steadily from approximately 55%\u201d to \u201caround 83.5%\u201d at the end\nof the Great Recession in 2009.  It has remained\nflat since that point. However, the paper states that \u201cWhile service-sector\ngrowth as a percentage of all jobs has leveled off, job quality continues to\nworsen.\u201d <\/p>\n\n\n\n

The\nauthors commented, \u201cAs weekly earnings of services sector jobs have, to an\nincreasing degree, materially lagged those of jobs in the goods- producing\nsector (Figure 6), an increase of the percentage of service sector jobs would\nnaturally result in an increase in the number of jobs below the mean, as\nreflected in the JQI.\u201d <\/p>\n\n\n\n

In\naddition, the authors note that the gap between higher-wage\/higher-hour jobs\nversus lower-wage\/lower-hour jobs\u201d has widened almost four-fold to $402 in 2018 from $104 in 1990\u201d  <\/p>\n\n\n\n

The\npaper states, \u201cjobs as tracked by the JQI are defined by reference to data on\nprivate sector (nongovernmental) employment provided by third party\nemployers\u2014it does not include self-employed workers. In the first iteration of\nthe JQI being presented in this paper, the index covers only production and\nnonsupervisory (P&NS) positions, which account for approximately 82.3% of\nthe total number of private sector job positions in the country.\u201d <\/p>\n\n\n\n

By\nthe end of 2020, a second index (JQL-2) \u201cwill run and be maintained\nside-by-side with the original JQI-1 index. This will track all private sector\njobs, with data commencing in 2000.\u201d<\/p>\n\n\n\n

Monthly\nrevisions to the JQI-1 will be published \u201ccontemporaneously with the monthly\nrelease of U.S. employment data by the BLS (generally on the first Friday of\neach calendar month. In the future, the JQI will be \u201cpresented as a three-month\nrolling average of monthly readings. This is done to address month over month\nvariability which is too volatile to be a reliable directional trend measure.\u201d<\/p>\n\n\n\n

The\nNovember\nJQI<\/a> stated:  \u201cthe U.S. Private\nSector Job Quality Index (JQI)\u00ae<\/sup> <\/strong>has been revised to a level of 80.39<\/strong>,\nrepresenting a minor decline of 0.04<\/strong>% from its level one month ago and\nreflecting a somewhat lower proportion of U.S. production and non-supervisory\n(P&NS) jobs paying less than the mean weekly income of all P&NS jobs,\nrelative to those jobs paying more than such mean. The mean weekly income of\nall P&NS jobs as of the current reading (reflecting the level as of October\n2019) was $794<\/strong>, a change of 0.9%<\/strong> from its level the month prior.\u201d  The chart released is shown below:<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

The\npaper is divided into five parts:<\/p>\n\n\n\n

Part\nI \u2014 Need for the JQI: The Unmeasured Problem with American Jobs<\/p>\n\n\n\n

Part\nII \u2014 Construction of the JQI: Capturing and Tracking the Data (explains the\ndevelopment technical detail, setting forth the assumptions and algorithms\ninherent in its generation)<\/p>\n\n\n\n

Part\nIII \u2014 Applying the JQI: Illuminating Areas of Confusion in Economic\nTransmission (discusses the relationship and potential forecasting usefulness\nof the index in connection with other economic data)<\/p>\n\n\n\n

Part\nIV \u2014 Further Developing the JQI: What the Future Holds for the Index (discusses\nfuture maintenance and expansion of the index)<\/p>\n\n\n\n

Part\nV \u2014 Conclusion: An Index for our Time <\/p>\n\n\n\n

Among\nother things, Part III discusses \u201cThe relevance of the resulting \u201cPhillips\nCurve,\u201d relating lower unemployment to higher levels of inflation\u2026[which] remains\u2014in\nvarious modified forms\u2014part of central bank policy consideration to this day.\u201d <\/p>\n\n\n\n

It also discussed the impact of the JQI on household incomes and consumption\nwith regard to the U.S. Balance of Trade in Goods. The authors comment, \u201c\u2026as\nAmerican consumption has continued to rise, the goods consumed had to be\nproduced by someone\u2014even as U.S. goods production jobs plummeted. As evidenced\nby the U.S. balance of trade over the past several decades, goods consumed by\nAmericans at the margin came increasingly to be manufactured abroad\u201d <\/p>\n\n\n\n

They later comment, \u201cThe decline in U.S. job quality over the past\nthree decades is linked substantially to a decline in goods-producing jobs.\u201d<\/p>\n\n\n\n

 Some of the findings of the\nresearch that were of particular interest to me in Part III were: <\/p>\n\n\n\n

  • \u201cThe JQI\u2019s\ndefinition of high-quality jobs (those above mean weekly earnings) provided an\naverage of 38.26 hours of weekly work at year-end 2018, compared with low\nquality (those below the mean) which provided 29.98 hours.\u201d<\/li>
  • The percentage\nof goods producing jobs as a percentage of total private sector jobs dropped from\n25.6% in 1990 (down from a high of 43% in 1960) to 16.4% in 2018. <\/li><\/ul>\n\n\n\n

    The\nresearches commented, \u201cSurprisingly, the data as analyzed with the JQI also\ntend to predict the performances of many other salient metrics of the national\neconomy and\u2014in the end\u2014financial markets too\u2026The JQI can significantly improve\ndecision making of policymakers as well as better-inform participants in the\nfinancial markets.\u201d<\/p>\n\n\n\n

    In\ntheir Conclusion, the authors remind us of the fact \u201cthat the US manufacturing\nworkforce has declined dramatically in the past three decades.\u201d Between 1970 and\n1990, the decline was gradual, going down from \u201c17.8 million manufacturing\nworkers\u201d to \u201c17.7 million.\u201d By the year 2000, \u201cit was down 2.4 percent to 17.3\nmillion manufacturing workers.\u201d In the next decade, \u201cmanufacturing employment\nfell off a cliff. By 2010, manufacturing employment was down a shocking 33.2\npercent at 11.5 million. Since 2010, the figure has crept up only somewhat, to\nreach 12.8 million in May 2019.\u201d<\/p>\n\n\n\n

     \u201cMeanwhile, the total US working population\nhas grown dramatically over those years. In 1970, manufacturing workers\naccounted for 22.6 percent of total US civilian employment. As of May 2019,\nthey accounted for just 8.2 percent of the total.\u201d<\/p>\n\n\n\n

    They\ncomment, \u201cAn important question surrounding the decline of manufacturing is\nwhether those leaving manufacturing are transitioning into better or worse\njobs.  After building the new Job Quality\nIndex, \u201cthe answer is that lost manufacturing jobs were chiefly replaced by\nlower-wage\/lower hours service jobs.\u201d<\/p>\n\n\n\n

    The\nWhite Paper confirms my research in writing three books and hundreds of\narticles in the past ten years \u2014 losing millions of manufacturing jobs between\n2000 – 2010 resulted in a decline in the middle class because manufacturing\njobs are the foundation of the middle class. Without a strong middle class, we\nrisk becoming a nation of \u201chaves\u201d and \u201chave nots.\u201d I hope the Job quality Index\nwill wake up more economists, Congressional representatives, and employees of government\nagencies to the dangers of this trend before it\u2019s too late.  <\/p>\n","protected":false},"excerpt":{"rendered":"

    On November 14, 2019, Cornel Law School \u201cannounced the launch of a new tool for evaluating the U.S. employment situation and predicting related variables: the U.S. Private Sector Job Quality Index (JQI).\u201d The Index described in the White Paper represents 18 months of research by Daniel Alpert, adjunct professor at Cornell Law School and founding […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[17,1,103,51],"tags":[95],"class_list":["post-942","post","type-post","status-publish","format-standard","hentry","category-economy","category-general","category-jobs-2","category-manufacturing","tag-manufacturing-jobs"],"_links":{"self":[{"href":"https:\/\/savingusmanufacturing.com\/blog\/wp-json\/wp\/v2\/posts\/942","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/savingusmanufacturing.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/savingusmanufacturing.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/savingusmanufacturing.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/savingusmanufacturing.com\/blog\/wp-json\/wp\/v2\/comments?post=942"}],"version-history":[{"count":1,"href":"https:\/\/savingusmanufacturing.com\/blog\/wp-json\/wp\/v2\/posts\/942\/revisions"}],"predecessor-version":[{"id":944,"href":"https:\/\/savingusmanufacturing.com\/blog\/wp-json\/wp\/v2\/posts\/942\/revisions\/944"}],"wp:attachment":[{"href":"https:\/\/savingusmanufacturing.com\/blog\/wp-json\/wp\/v2\/media?parent=942"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/savingusmanufacturing.com\/blog\/wp-json\/wp\/v2\/categories?post=942"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/savingusmanufacturing.com\/blog\/wp-json\/wp\/v2\/tags?post=942"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}