McDonald's National Hiring Day: What does it mean for the economy's recovery?

Commentary about business and finance.
April 19 2011 2:36 PM

Heading for a McRecovery?

McDonald's plan to hire 50,000 people in one day and what it says about America's economic prospects.

McDonalds expands hiring. Click image to expand.
McDonald's is hiring. A lot.

McDonald's has named today, April 19, "national hiring day." As with everything McDonald's, it's all about scale. In one day, the chain hopes to add as many as 50,000 people to its payrolls; worldwide, it employs 1.7 million workers, runs 32,000 restaurants, and serves tens of millions of burgers every day. On the one hand, this is great news: 50,000 jobs! On the other hand, 50,000 McJobs?

Indeed, the McHiringSpree raises the question: Has the recession turned us into a nation of McWorkers? More precisely, what kind of jobs has the recovery ginned up?

The Bureau of Labor Statistics offers a host of month-by-month information on who is working where, for how much and for how long. The data show that a few industries are at or above their level of employment before the recession started. The federal workforce is slightly bigger, once you factor out job losses at the Postal Service and ignore Census hiring. Employment is also up in some niches, like computer systems design. And health care remains the United States' strongest growth industry, with tons of new jobs for workers like home health aides and physicians' office workers.

But the industries where employment remains below peak are too long to list—jobs remain scarce in the vast majority of subcategories, from logging to personal and laundry services. (There's some overlap between the subcategories, though, thankfully not between logging and laundry.) Alas, that is to be expected. The Great Recession sacked the entire economy. Demand remains low. Employers are hesitant to add too many workers, too soon.

So it may be better to measure from the trough than the peak, looking for the industries that have had a jobs uptick since bottoming out. According to the BLS, a lot of sectors have seen a mild, tentative rebound. Businesses from railways to clothing retailers have taken back some of the workers they shed. And one chart looks like a big V, rather than a reverse checkmark, meaning strong jobs growth: "temporary help services."

Despite the gains and the rebounds and the upticks, though, it all adds up to a fairly bleak picture: The jobs we're adding, for the most part, aren't great ones. The National Employment Law Project took a closer look at employment and jobs-growth data in February. What it found wasn't encouraging. The advocacy group says that just 14 percent of recent job growth comes from high-wage industries. About half comes from low-wage industries. According to NELP's report, restaurants and food services businesses,  "especially" fast food outlets, comprised 7 percent of hiring. And most gigs, NELP found, came "from rapid hiring by the temp industry," meaning the positions that often come without benefits, health care, or much income security.

The picture contributes to a larger, yet equally depressing, labor-market story: The country has produced far too few good, stable, middle-income jobs over the past 10 or 20 years, not just the past three. One of the most prominent economists making this case is David Autor of MIT. "Two forces are rapidly shifting the quality of jobs, reshaping the distribution of earnings and job opportunities," he writes in a recent paper. One is educational stagnation among men and gains among women. The other is "employment polarization, whereby job opportunities are increasingly concentrated in high-skill, high-wage jobs and in low-skill, low-wage jobs." Thus comes the frightening possibility of a "barbell" shaped economy, with jobs at places like fast food joints and universities—but not a lot of jobs in between.

There are more optimistic economists (though the discipline's nickname is no accident). Harry Holzer, a professor at Georgetown and former chief economist for the Labor Department, says that the recession has distorted the jobs picture, and that present trends are not permanent. "Early on in a recovery, a lot of the hiring is temporary and low-end," he explains. "In an uncertain labor market, it's easier to hire those workers. Those jobs don't entail a big commitment—no training, no paying a lot of benefits." As the recovery strengthens, he expects the economy to add more and better middle- and high-income positions.

But for the time being, the economy will take any jobs it can get. Besides, those McJobs might be nothing to mock. Several of McDonald's current executives started behind the counter, as did half of the company's owner-operators and 75 percent of its restaurant managers. A low-paying job need not stay a low-paying job forever. And a low-paying job is decidedly better than none at all.

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