In this year’s State of Working Pennsylvania, our annual evaluation of the health of the economy from the perspective of the middle class, three findings stand out:
- A definite weakening in the overall pace of job growth in Pennsylvania since January 2010 largely driven by the loss of 45,000 jobs in the public sector
- One of the strongest performing sectors in terms of job growth in the period since January 2010 was Accommodation and Food Services, which added 28,000 jobs (an increase of 6.7%) and accounted for one out of every three jobs added in Pennsylvania.
- One of the sectors with the largest share of poverty-wage jobs in the Pennsylvania economy was the supersector Leisure and Hospitality — a sector comprised mostly of Accommodation and Food Service jobs. More than one out of every five jobs in Leisure and Hospitality paid less than $11.19 an hour.
On Wednesday Dean Baker noted that a number of analysts have been arguing that the disproportionate share of new jobs being created in hotels and restaurants is evidence that forces beyond our control are leading to an economy that produces a few high-paying jobs and lots of low-paying jobs for everybody else. Baker calls this the “it just happens” view but then counters:
An alternative explanation to the “it just happens” view is that the weak economy itself is responsible for the proliferation of bad jobs. In other words, because the economy is not generating decent jobs in any reasonable number, workers are forced to take bad jobs. In that story the proliferation of bad jobs is the direct result of a weak economy.
As Baker points out in Figure 1 below, the higher the unemployment rate is in a state, the bigger the increase in the share of all jobs accounted for by hotels and restaurants.
A key reason that hotels and restaurants make up such a large share of job growth in Pennsylvania is precisely because unemployment here remains high. When federal and Pennsylvania policymakers enact deep budget cuts and fail to move forward with much needed investments in our transportation infrastructure, they keep unemployment higher than it should be. That’s a key reason that one of the few bright spots in our economy in terms of job growth is found in sectors that offer workers low pay.