The Decline of Good Jobs

August 6, 2011

A new study by the Center for Economic and Policy Research addresses the question of what’s happened with “good jobs” in the U.S. economy.  “Where Have All the Good Jobs Gone? asks are there more or fewer good jobs? Do they require more or less education?

Kevin Drum notes that the researchers “set a fairly low bar” for what counts as “a good job.” “A good job is one that pays $37,000 (the median wage for men in 1979), includes at least some health insurance, and some kind of retirement plan. It doesn’t have to be generous health coverage or a generous retirement plan. Mediocre health plans with big copays still count, and modest 401(k) retirement plans count. The job just has to include something.”Even though the U.S. workforce is better educated today, the number of good jobs so defined has declined.

These graphs tell the story.

Overall, the percentage of workers with “good jobs” has declined from 27% to 24% since 1979.

The authors, John Schmitt and Janelle Jones, note that “the standard explanation for the deterioration in the economy’s ability to create good jobs is that most workers’ skills have not kept up with the rapid pace of technological change.” But based on the data, Schmitt and Jones reject this hypothesis.  Their conclusion is sobering and worth quoting in full:

“We believe, instead, that the decline in the economy’s ability to create good jobs is related to a deterioration in the bargaining power of workers, especially those at the middle and the bottom of the income scale. The main cause of the loss of bargaining power is the large-scale restructuring of the labor market that began at the end of the 1970s and continues to the present.

  • The share of private-sector workers who are unionized has fallen from 23 percent in 1979 to less than 8 percent today.
  • The inflation-adjusted value of the minimum wage today is 15 percent below what it was in 1979.
  • Several large industries, including trucking, airlines, telecommunications, and others, have been deregulated, often at a substantial cost to their workers.
  • Many jobs in state and local government have been privatized and outsourced.
  • Trade policy has put low- and middle-wage workers in the United States in direct competition with typically much lower-wage workers in the rest of the world.
  • A dysfunctional immigration system has left a growing share of our immigrant population at the mercy of their employers, while increasing competitive pressures on low-wage workers born in the United States.
  • And all of these changes have played out in a macroeconomic context that has – with the exception of the last half of the 1990s – placed a much greater emphasis on controlling inflation than achieving full employment.

“In our view, these policy decisions, rooted in politics, are the main explanations for the decline in the economy’s ability to generate good jobs.”

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About Doug Bennett

Doug Bennett is Emeritus President and Professor of Politics at Earlham College. He has a wife, Ellen, and two sons, Tommy (born 1984) and Robbie (born 2003).
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