Cashiers at Wal-Mart

Having recently posted a series of three articles on the quality of the jobs created in America over the last few years (see here, here, and here), we paid close attention to this story last week about how 11,000 people applied for 400 positions at the new Wal-Mart in Oakland.

A bit too weary of the entire jobs dilemma to comment on it at the time, after almost a week, the story has not left our thoughts.

We continue to think about the irony of it all. By the millions, men and women make the long journey from rural areas in China to densely populated cities in the hope of securing manufacturing jobs paying less than 50 cents per hour. At the same time in Oakland, by the thousands, men and women make the short trip over to the new Wal-Mart in the hope of securing retail trade jobs paying 20 times that amount.

The products sold in Wal-Mart first pass through the Chinese hands of factory workers half way around the world. They then go into boxes, onto ships and trucks, and onto store shelves where they are selected by the end-consumer. Before beginning the final leg of their journey, these products pass briefly through the American hands of cashiers at Wal-Mart.

"I needed a job ASAP, and they had their doors open," said Virginia Ford, 19, of Oakland, who had applied for 25 jobs in three months before she landed one as a cashier at Wal-Mart in Oakland on Tuesday.

It is unlikely that Virginia sees the irony. She's just happy to have a job.

Stephen Levy, an economist for the Center for Continuing Study of the California Economy, said the pent-up demand for work reflects the Bay Area's slow recovery from the dot-com crash ... ""It's not about Wal-Mart -- it's about the rest of the labor market," Levy said. "If the rest of the labor market was strong, you wouldn't have 11,000 people applying for 400 jobs."

Stephen probably doesn't see the irony either. It sounds as though Stephen is close enough to the problem of job creation in America that irony such as this would be the furthest thing from his mind. He and a growing number of economists are increasingly concerned that there are serious problems with the quantity and quality of jobs being created in the last few years - despite what the government statistics indicate.

What the government statistics indicate in this case is quite peculiar indeed. Per the 2002 census data, there are a total of 1,461,000 people in Alameda county, of which about 950,000 are between the ages of 18 and 65. With a reported unemployment rate of about 5%, this would mean that there are less than 50,000 unemployed individuals in the county, and 11,000 of them applied for jobs at Wal-Mart!

Now, you can do the math any way you like, for example, including nearby counties or considering a different proportion of the total population, but the fact remains - 11,000 job applicants (as reported by Wal-Mart) and low unemployment (as reported by government statistics) can not both describe what happened at Wal-Mart.

Of course, we can offer no solutions to the problems of job creation in America. We just think it would be nice if policy makers could come up with something better than the current approach to job creation. The current approach, that is, of using ultra-low interest rates and ultra-loose lending standards to enable a dangerous housing bubble, which then creates a small number of housing related jobs, but which more importantly makes enough homeowners feel "wealthy" enough that many of them will borrow against their homes to aid in their continued purchase of imported goods from China at stores like Wal-Mart, thus creating more low-paying jobs at retailers like Wal-Mart.