The May Federal Jobs Report and the Fight for $15

By Sharon Post

The month of May 2014 saw job growth of 217,000 in the U.S. but no change in the number of people who are unemployed. Perhaps buoyed by the news of job growth, 218,000 unemployed people who had abandoned the search for work re-entered the labor force in May. But what awaits those hopeful job-seekers?

Although we’ve had several months of relatively positive jobs reports, the pace of job growth has been too slow to employ the nearly 10 million officially unemployed workers in any reasonable amount of time. The number of workers without jobs for 27 weeks or more did not change in May and still accounts for 35% of the total unemployed. Nor has the labor force participation rate budged past the historically low levels that have defined the Great Recession and its long, dreary “recovery.” Prospects for working people are still grim, especially in the 24 states that have callously refused to expand Medicaid even as their residents struggle to get by.

Last month the Chicago Political Economy Group (CPEG) drew attention to another weak spot of the recent employment growth—a disproportionate number of the jobs the economy is creating are low-wage.  So it’s notable that another month of job growth coincides with the largest worker walkout in a campaign to raise wages in a high-profile low-wage sector.  Workers in fast food restaurants in 30 countries and 150 US cities walked off the job in a one-day strike, protesting low wages and rallying around the call for a $15 per hour wage in the industry.

The fast food campaign’s Fight for 15 message has resonated around the country. Seattle passed an ordinance raising the city’s minimum wage to $15 per hour, phased in for various sized businesses over three to seven years. In an interview on WNYC about home care in the Bronx, Carol Rodat of PHI PolicyWorks suggested that the way home care workers will achieve fair wages is to “do like what the fast food people do—demonstrate.”

The fact that a home care worker would join in the call to protest for a $15-per-hour wage is significant given recent trends in health care employment. In May, health care added 34,000 jobs, doubling the average growth for the prior 12 months, and hospital job growth was higher than it has been all year. However, hospital employment has been trending down while ambulatory health care settings, and especially home health providers, continue to drive growth in health care sector jobs. In 2012, hospitals added 73,000 jobs. That dropped to 9,800 in 2013 and we’ve yet to see a return to earlier levels of hospital employment.

Technology and demographics drives some of these changes. More procedures can be performed in outpatient settings, reducing inpatient hospital admissions and staffing needs. However, deliberate policy decisions are also driving the shift from large-scale hospital employment to employment across fragmented ambulatory settings, including home health. Medicare pay-for-performance metrics for hospitals include reducing readmissions and overall costs of care; Medicaid incentives for health plans include reducing hospitalizations for conditions that could have been treated in ambulatory settings. The overall goal of health care policy is to keep people out of hospitals.

While this policy goal is sound—hospital admissions are disruptive, costly and dangerous, so avoiding them when possible is laudable—they create a problem to which the economy has no obvious answer. Hospitals employ clinical workers but also large numbers of service and maintenance workers to serve patients staying for several days. Outpatient centers and physicians’ offices do not need a full-time staff of housekeepers and food service workers. We should not be making health policy based on preserving jobs, and many service jobs in hospitals are difficult, dirty, and dangerous.  But that doesn’t mean we shouldn’t have a jobs policy that can complement our health care policies, a policy that acknowledges and responds to the likely drop in hospital employment.

One frequent criticism of the Fight for 15 workers, and workers like the home care providers in the Bronx who are inspired by the fast food campaign, is that low-wage jobs should be stepping stones, not careers.  Any news article on low-wage worker protests will include comments blaming the workers and excoriating them for demanding more pay from a low-skill job instead of putting in the work to climb the ladder to more prosperous employment.

Recent job reports have shown that this criticism is out of touch with reality. The economy we live in does not create enough good-paying jobs to allow for the kind of mobility implicit in the “stepping stone” story. A more realistic response is an active restructuring of the labor market by creating federally-funded living-wage jobs that serve unmet social needs, as proposed in the CPEG jobs program. A few dozen members of Congress understand that the private sector is not meeting the needs of the economy or society and have co-sponsored HR 1000, the 21st Century Humphrey-Hawkins Full Employment and Training Act. If your representative is not a co-sponsor, contact them to show your support for a federal jobs program and insist that they sign on.

Sharon Post is the director of the Center for Long-Term Care Reform at the Health and Medicine Policy Research Group.  Before joining Health and Medicine she worked for eight years for SEIU as a researcher. She is a member of the Chicago Political Economy Group. 

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