Fed’s Raskin Bemoans Quality of New Jobs

A trip to a job fair exposed another concern about the weak recovery to Federal Reserve governor Sarah Bloom Raskin — those who do find employment often must accept low paying positions.

After finding mostly security, restaurant and life guard positions at a job fair held at community college near her home, Ms. Raskin said Tuesday that she investigated the type of jobs that have been gained since the economy emerged from recession.

She found half of all those hired received low pay jobs, but two-thirds of the jobs lost in the recession were middle income jobs like factory and construction workers.

Ms. Raskin said she is concerned about “the quality of jobs available,” while speaking on a panel at a conference on joblessness hosted by the Roosevelt Institute, a self-described progressive policy organization.

“I didn’t think life guard was a job that required an advanced degree,” she said.

The low quality of jobs added in the recovery explains why wages have mostly stagnated even while unemployment has declined in recent years.

Ms. Raskin said the phenomenon suggests there is a disconnect between education and the skills employers need.

She also said the current unemployment rate, which still remains high despite its gradual improvement, underestimates the true scope of the unemployment problem.

The “real risk” of long-term unemployment is that the longer a worker stays unemployed, the more unemployable they grow. Firms are increasingly reluctant to hire people who have been out of the workforce for long stretches, which leads to those workers losing skills and ultimately the ability to ever reenter the workforce, she said.

She didn’t address monetary policy in her remarks.
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Link: http://blogs.wsj.com/economics/2013/06/04/feds-raskin-bemoans-quality-of-new-jobs/