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When job creators create lousy jobs

danps's picture

One of the most interesting links I found while researching last week's post on Teach For America was the item on how TFA hiring in Connecticut was denying job opportunities to local residents. It occurred to me that the author was getting an on-the-ground look at a similar phenomenon I've observed with the oil and gas industry in Ohio (and presumably elsewhere): both TFA and fracking rely on short term, out of state labor.

(I know TFA recruits have the opportunity to extend beyond their initial two year contract, but the very fact of a two year contract sends a strong message that the job is not intended to be permanent.)

The degree to which this is happening makes aggregate reporting on job gains inadequate. Necessary but not sufficient. With fracking, for instance, the numbers are terrible - and what were considered dire warnings from activists a few years ago about the dubious economic benefits of it are now blandly accepted as conventional wisdom.

Last summer the Plain Dealer reported that "employment levels increased by less than 1 percent in 15 eastern Ohio counties where the highest number of horizontal shale wells have been drilled." Then it followed that up a few weeks ago with an article that painted a very rosy picture of a dismal reality: Jobs are going to migrant workers, and the main economic impact is bumping up business to the hotels and restaurants that serve them.

As a side note, moving the goalposts appears to be a feature of crappy job boosterism. In the August PD article, note that we are once again just a step further down the resource extraction path away from JOBS: "Future job growth will depend on whether Ohio's shale wells produce 'natural gas liquids,' or NGLs, which are used by industry and whether the price of 'dry gas' used for heating, power production and manufacturing increases beyond the current prices." Meanwhile, an industry flack mumbles that jobs were never the point anyway: "I think the real indicator is sales-tax receipts that have grown in the eastern counties where this activity is taking place."

So the relevant question is, are meaningful jobs created? I'd say a meaningful job has three characteristics: It employs locally at a living wage for the long term. As I've written before the oil and gas industry would like the public believe fracking does all three, and will be an anchor for communities much like steel mills once were. The reality is far different.

Jobs created for migrants or in a boom town - where there isn't sufficient housing for the influx of new workers, and those lucky enough to have a roof over their heads often have no toilet or running water - don't seem like much to celebrate. (To be fair, it's been positive for at least one ancillary industry.) Similarly, TFA's transition from plugging individual vacancies to wholesale replacement of local workforces seems like a really raw deal for the communities targeted by it.

This process has been happening for a good long while now. A scrap of folk wisdom from the Clinton years shows how many people intuitively understood that. Deals like NAFTA (which ought to be called free capital agreements since trade is incidental to their purpose (via)) destroyed hundreds of thousands of good-paying manufacturing jobs, while new positions were created in the lower-paying service sector. The running joke went something like this: "I know they've created millions of new jobs. I have two of them."1

That trend - which again, folks were very much aware of from the start and had no illusions to the contrary about - is our new reality. We should take that into account the next time we are assured that a good jobs report means that this time, for reals, pinky swear, the Great Recession is totally over. The jobs number by itself is not nearly enough.

We also need to know how much those jobs pay, who is filling them and for how long. It may not be possible to break it down to that level of detail, in which case fine. But such reports should be seen as of limited utility. People need steady work nearby at good wages, and a report that doesn't address that isn't (and shouldn't be) of much interest.


1. Additional appearances:

  • Here: "He said I created 11 million jobs. Well, I met a guy the other day that got three of them. "
  • Here (PDF): "President Clinton has created millions of new jobs--I have three of them!"
  • Here (PDF): "Oh sure, America is creating millions of new jobs. And I've got three of them."
  • And I remember seeing it in an editorial cartoon as well (that's where I first read it) but don't remember who or where.


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