Public Servants Are Losing Their Foothold in the Middle Class

From today’s New York Times:

The anxiety and seething anger that followed the disappearance of middle-income jobs in factory towns has helped reshape the American political map and topple longstanding policies on tariffs and immigration.

But globalization and automation aren’t the only forces responsible for the loss of those reliable paychecks. So is the steady erosion of the public sector.

For generations of Americans, working for a state or local government — as a teacher, firefighter, bus driver or nurse — provided a comfortable nook in the middle class. No less than automobile assembly lines and steel plants, the public sector ensured that even workers without a college education could afford a home, a minivan, movie nights and a family vacation.

In recent years, though, the ranks of state and local employees have languished even as the populations they serve have grown. They now account for the smallest share of the American civilian work force since 1967.

The 19.5 million workers who remain are finding themselves financially downgraded. Teachers who have been protesting low wages and sparse resources in OklahomaWest Virginia and Kentucky — and those in Arizona who say they plan to walk out on Thursday — are just one thread in that larger skein.

The private sector has been more welcoming. During 97 consecutive months of job growth, it created 18.6 million positions, a 17 percent increase.

But that impressive streak comes with an asterisk. Many of the jobs created — most in service industries — lack stability and security. They pay little more than the minimum wage and lack predictable hours, insurance, sick days or parental leave.

The result is that the foundation of the middle class continues to be gnawed away even as help-wanted ads multiply.

Read the complete article here.

Summer Job Isn’t What It Used to Be

From NYT “OpTalk” Blog, September 9, 2014 by Anna Altman:

Once upon a time, hard-working high school students who took a summer job or worked part-time during the school year got an edge over their unemployed peers. Not only did they earn some pocket money — which many students saved for college — but they were also likely to see increased earning potential long after they graduated.

Not only that, teenagers would prove their work ethic, make professional connections, increase their self-confidence and become more likely to graduate from high school in the first place.

But according to a recent article by Jessica Leber in Fast Company magazine, a summer paycheck no longer comes with many of these advantages. Ms. Leber cites a study published last month by Charles L. Baum and Christopher J. Ruhm for the National Bureau of Economic Research. The study looked at two groups, one of high school students in 1979 and another of students in 1997. It shows that, today, high school seniors who also work 20 hours a week are less likely to have increased earning potential later on than they might have been in 1979.

In concrete terms, the 1979 group was likely to see an 8.3 percent increase in wage-earning capacity, compared with a 4.4 percent increase for the 1997 cohort.

Furthermore, the earlier group was more likely to move into better-paying fields. “Senior year employment was predicted to decrease the probability of subsequently working in the relatively low-paid service sector for the 1979 cohort but to increase it for the 1997 cohort,” Mr. Baum and Mr. Ruhm write. For the latter group, the increase in the likelihood of low-paid service work offset “a portion of the benefit of the early work that otherwise would have occurred.”

Overall, Mr. Baum and Mr. Ruhm’s study concludes that working as a student isn’t what it once was: “Work experience during the high school senior year continues to predict positive effects on labor market outcomes 5-11 years after the expected date of high school graduation, but these beneficial consequences have attenuated fairly dramatically over time.”

That students who work during high school may be at a disadvantage for later earnings seems to confirm the degree to which the economy is proceeding on two tracks: one for low-wage earners, and another for students who are in a financial position to pursue internships or other opportunities that lead to connections.