Chart: Good jobs are getting harder and harder to find

August 3, 2012

It's one thing to get a job—any old job. It's quite another to have a good job that pays well and has decent benefits. And, via Kevin Drum, a new report (pdf) from the Center for Economic and Policy Research finds that those "good jobs" are getting increasingly hard to find in the modern-day U.S. economy. Even for well-educated workers.


Don't get too excited just yet. (Byron Holland — AP Photo/New Bern Sun Journal)

The report's authors, John Schmitt and Janelle Jones, define a "good job" as one that pays at least $37,000 per year (that was the median wage for men back in 1979, adjusted for inflation). A good job, they argue, should also provide health insurance and offer at least some retirement benefits.

By that definition, a good job is hard to find: In 2010, only 24.6 percent of workers were in such a situation. That's down from 27.4 percent in 1979. Fewer employers are providing health insurance. And, after the stock market crash in 2000, far fewer companies are chipping in for their employees' retirement.

What's more, while college-educated workers are more likely to have a good job than anyone else, even that's no guarantee:

Only about 40 percent of the college-educated workforce had a "good job" in 2010 by the authors' definition. That's declined slightly over the past three decades, at the same time that the percentage of college-educated workers has gone up. (In 1979, just 19.7 percent of the workforce had finished college. Today, that's up to 34.3 percent.)

Meanwhile, for workers who don't have a bachelor's degree, the odds of landing a job that provides at least a median wage, employer health care, and retirement benefits have plummeted. For Americans who haven't finished high school, the odds of landing a "good job" are approaching zero.

Schmitt and Jones argue that this decline is the opposite of what we'd expect. The workforce is older and better educated today than it was in 1979. So why are there fewer good jobs around? One possibility is that technological change has left behind workers without skills. All the good jobs require education. But if that's the case, then why are "good jobs" becoming less plentiful even for those with advanced degrees?

Instead, the two economists favor a more standard liberal story about changes in the economy. Unions have declined, the minimum wage has withered, and central bankers nowadays prefer to focus on keeping inflation low than on promoting full employment:

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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