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What makes a 'good' job?

Posted: Aug. 14, 2012 | Tags: What Went Wrong

Jobless claims edged down last week for the second week in a row. The Department of Labor reported Thursday that 6,000 fewer Americans filed unemployment claims.  

john_schmitt_cepr

But despite the economy adding a better-than-expected 163,000 jobs in July, at least 12 million Americans are still officially searching for a job. So are there enough jobs to sustain the American Dream?

A new report from the Center for Economic and Policy Research says good, quality jobs are on the decline. What is a good job? One that offers retirement and health benefits for starters.

If a job "had health insurance, it says a whole lot more about the job,” said John Schmitt, senior economist at Center for Economic and Policy Research. He and co-author Janelle Jones wrote the report, “Where Have All the Good Jobs Gone?” 

In addition to the retirement and health benefits, good jobs can be measured by salary, of course. To measure income, the authors used $18.50 per hour, or about $37,000 annually, as a benchmark. The median income for men stood at about $37,000 in 1979 and has not budged much since then. 

But fewer than one-quarter of workers were in jobs that fit this triad in 2010, according to the center. Using data from the Census Bureau’s Community Population Survey, the authors concluded that percentage has fallen from more than 27 percent in 1979. The report estimates if the rate of good jobs had increased with educational attainment and worker experience, the rate would be more than 34 percent — meaning about 13 million more Americans would have so-called good jobs.

The share of good jobs has declined since 2000, after a spike in the late 1990s. But don’t blame the recent recession. 

“If you go from 1947 to 1979, you would see exactly the reverse,” said Schmitt. “You would see huge improvements to wages, huge improvements to health insurance, huge improvements in access to pensions,” he said.

The share of workers earning the good-job threshold income increased 7 points, to 47 percent in 2010. The ascent of women in the workforce accounts for much of that gain. The share of women earning at or above the income threshold more than doubled over the past 30 years, to more than 38 percent in 2010.  

An overall decline in employer-sponsored benefit programs has had the greatest impact on declining fortunes. Analysts did not account for the quality of benefit plans but looked at whether employers contribute in some way to plans. Participation in an employer-sponsored retirement plan has declined 7 percent since 1979.  

But the biggest hit: Employer-sponsored health-plan participation fell 13 percent since 1979. 

Today, education and the right skills set are touted as the route to a good job. But even the increase in the number of people earning a college degree and having top skills has not translated into sustained growth in good jobs, according to the report. Nearly twice as many workers had a bachelor’s or a higher degree in 2010 than in 1979. Workers are also seven years older on average since 1979, which Schmitt says should translate to a more attractive and experienced workforce.

The least-educated have continued to lose the most. Fewer than 4 percent of those without a high school diploma were in a good job in 2010, compared with 18 percent in 1979. For those with at least a high school diploma, fewer than 15 percent are in a good job, whereas close to a quarter held that distinction in 1979.

“The bottom of the labor market has been systematically dismantled,” said Schmitt .

The report debunks the notion that it is just a skills gap leading to fewer good jobs but blames a decline in the bargaining power of workers. According to the report, power has been degraded by a decline in union membership, deregulation and a trade policy that has restructured the labor market.  

“In some ways, we’ve done everything right,” said Schmitt. “Nothing has ensured that the benefits of efficiency are returning to those who have made the efficiency possible.”

 

 

 




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