Are Lousy Jobs Responsible for Economic Recovery?

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Brad Plumer calls this “the most depressing jobs chart in a long time”:

Basically, what these charts show is that in countries where the labor market has improved since 2007, average job quality has declined. “The nations that have made the most inroads in reducing their unemployment, such as Germany or Israel, have often done so by adding lots of lower-quality jobs, including part-time gigs and jobs with lower benefits.”

I have some doubts about this. The right-hand chart, which is for developing economies, I’d just toss out completely. The correlation is tiny, and a quick eyeball suggests an enormous variance. This is basically just random data.

The chart on the left, which is for advanced economies, looks better, but the position of Spain gave me pause. According to this data, job quality in Spain has gone up enormously since 2007. Up? What definition of job quality are they using? Here it is:

In advanced economies (a) the change in the percentage of temporary employees, (b) the change in social benefits expenditure as share of total public expenditure and (c) the growth in the average hourly wages between 2007 and 2011 were used.

Hmmm. Hourly wages in Spain may have been flat since 2007, but I don’t think they’ve actually gone up. So that means Spain’s job quality index has skyrocketed because (a) lots of temp employees have been let go, which means there’s now a higher percentage of permanent employees, and (b) social benefits have gone up because the unemployment rate is in the stratosphere.

I dunno. Does that smell like “increased job quality” to you? Me neither. Don’t get me wrong: It makes perfect sense that a reduction in job quality might help keep unemployment in check. I’m just not sure this chart demonstrates it. Spain is such an outlier that I’ll bet it drives a fair amount of this correlation, and I’m not sure I trust a job quality index that gives Spain such a high score.

I might be missing something here. I’m sure someone will let me know if I am. For now, though, I’m a little skeptical of this.


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