While many economists were wringing their hands over the measly 162,000 jobs added to the U.S. market in July, other social scientists were more concerned about the types of jobs Americans are taking; last month, the majority of jobs added were in low-wage sectors.
According to USA Today, which reported on the July jobs numbers, 60% of the jobs added to the U.S. economy came from one of four low-wage sectors: retail, restaurants, home health care, and temp agencies. Overall, jobs in these industries have accounted for 45% of additions to the labor market in 2013.
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While the growth of the low-wage economy might seem like good news for Americans lacking a college education or other training, many sociologists and labor activists worry that the growth of low-wage, low-skill work bodes poorly for U.S. workers overall. Many low-wage jobs carry few (if any) benefits and keep employees in a state of financial precariousness. Saving, investing, and paying down debts is difficult on a small paycheck and finding the time to go back to school to obtain marketable skills is also a challenge.
There are several different ideas about why the low-wage sectors are adding more jobs than others. One theory is that employers, anticipating the regulations imposed by the Affordable Care Act, are reticent to add full-time, higher paid workers to their rosters. The ACA requires that employers in large and medium-sized companies provide all full-time workers with health insurance, and many experts feel this discourages the hiring of these types of employees. Another possibility is that demand for the goods and services provided by these industries is ticking up, causing employment in the restaurant and retail sectors in particular to jump to accommodate this growth.