Not All Jobs Are Created Equal

by Fred Siegmund

Is employment looking up? In Newsweek, Daniel Gross says that “Jobs Are on the Way!,” noting that even though employment is still off 11,000 jobs, the all-important service sector has added 58,000 jobs.

He cites the 0.2% drop in the unemployment rate and a few other markers of improvement, concluding America’s job market is turning around.

But, as with so many issues, the devil is in the details.

The author had to ignore the increase of 86,900 jobs in the administrative and support services sector. So many other services were declining that 58,000 was a net gain disguising job losses in other services such as accounting and legal services.

Administrative and support services are part of a carefully defined set of sectors and industries used to report government data. Firms doing administration and support activities do the day-to-day operations of other businesses on a contract or fee basis.

The definition does not tell us what companies in this sector actually do. The answer is a lot of things.

The Many Faces of the Support Sector

If I were going to work in this sector, I would definitely pick a job in a travel agency. I can picture myself relaxing in a cheery office full of travel posters offering a witty patter of conversation describing sunny Caribbean tour sites.

Pick your favorite!

Try a job in contracted office administration, facilities support services, employment placement, temporary help services, desktop publishing, word processing, telephone call centers, telephone answering services, telemarketing bureaus, copy centers, private mail centers, collection agencies, credit bureaus, repossession companies, court reporter companies, travel agencies, tour operators, convention bureau services, ticket services, investigation services, armored car services, security guards and patrol services, security systems companies, exterminating companies, pest control companies, janitorial service companies, landscaping companies, carpet and upholstery cleaning services, chimney sweep companies, packaging and labeling services, convention and trade show organizers, and a few more, but I am out of breath.

Administrative and Support establishments sell almost everything they do to other establishments as part of outsourcing contracts, and they often sell a combination of one or more support services.

A system of outsourcing employment generates a cycle of bidding for service contracts and also with temporary help services bidding directly for available work. Custodians, for example, work for contracting firms that constantly bid new contracts.

Contracts tend to be one to three years, but allow cancellation on 30 days notice. It is labor intensive work with seventy five to eighty percent of total costs come from wage costs and the contractor with the low bid is likely to be the one that pays the lowest wage.

Where is the Saving Coming From?

The more rapid adjustment of labor to the ebb and tide of business may save business costs, but much of the savings appears to be from lower wages and higher unemployment costs for workers and the government rather than any productivity gains from outsourced work.

The Newsweek article makes the mistake so many articles make: they count jobs as though they are all alike.

Next time you hear the job market is improving; ask yourself, “New jobs in what?”

About the author: Fred Siegmund covers America's jobs as part of work doing labor market analysis and projections for a client base of recruiters, trainers and counselors. Visit him at www.americanjobmarket.blogspot.com

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