McJobs – would you like more money with that?
The theory is that for most New Zealanders, the benefits of economic recovery and beyond will come through rising wages as businesses improve their profitability.
But if you look at the type of jobs many New Zealanders will be doing in the next decade or so, there’s not much reason to get excited.
Most new jobs are likely to be low paid, continuing a trend where relatively high paying manufacturing jobs have been lost and replaced by “low quality” ones.
I haven’t been able to find anything similar for New Zealand, but the US Bureau of Labor Statistics has come up with the 10 jobs expected to provide the greatest number of new jobs in the US in the next decade:
• Registered nurses
• Home health aiders
• Customer service reps
• Food prep and serving staff
• Personal and home care aides
• Retail sales
• Office clerks
• Accountants
• Nursing aides, orderlies
• Post secondary teachers
New Zealand won’t be a hell of a lot different.
The worrying part of this list (no, not more accountants) is that six of the 10 are low paying. Three of the six are in health.
The Department of Labour has calculated that New Zealand will need to treble the number of paid care givers between now and 2036 to cope with demand from all the oldies.
So probably no worries about getting a job. But would you want one?
Many workers in the health sector are now paid little more than the minimum wage. Ditto for the food industry and retail sales.
So unless there is a radical shake up in what people in these industries get paid, the so-called growth dividend is not likely to be all that great for a large number of people.
These jobs are low paid because they are low skill, often casual and dominated by women.
And they don’t generate much revenue for a business. Paul Callaghan in his book Wool to Weta has a table showing the revenue per employee for some of the world’s largest business.
McDonald’s workers earn US$9389 each compared with an Apple employee’s US$1.3 million.
So one of the things that can be done, as Callaghan argues, is to create more jobs in ventures that generate high levels of wealth off relatively low levels of investment in raw materials, bricks and mortar and other increasingly scarce resources.
We have been poor at this compared to other countries.
Other things that can be done (and are being done with mixed results) to improve the situation include improving skills and lifting productivity.
Another is just to pay these people more.
Commenting on the top 10, Harvard University labour economist Lawrence Katz said the challenge was to move these jobs up the skills ladder. There’s no reason, he says, that home health care workers couldn’t be better educated to provide patients with greater value and, as a result, command higher wages.
Katz said this wouldn’t necessarily require spending more on education, but rather changing what’s taught to focus more on different skills like problem solving, interpersonal relations and teamwork.
The problem of course is how the Government, as the by far largest health funder, going to pay more. Already the health dollar is stretched to braking point.
As the Ministerial Review Group on health says “We like to consume health services like other OECD countries, but we are less able to afford to”.
There are no shortcuts to dealing with the dilemma of how to pay wage earners more from an economic cake that is not growing fast enough to keep up with demands and expectations.
The only way we will be able to do this is to speed up growth of the cake.