Good Jobs

Robert Kuttner argues that publicly subsidized human-services jobs should be good-paying jobs with benefits:

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Here is a very straightforward proposal. Let's have a national policy to make every human-service job a good job -- one that pays a living wage with good benefits, and includes adequate training, professional status, and the prospect of advancement -- a career rather than casual labor.

These, after all, are jobs caring for our parents, our children, and ourselves. Transforming all human-service work into good jobs would not merely replenish the supply of decent work. It would vastly improve the quality of care delivered to the elderly at home or in institutions; to young children in pre-kindergartens or day-care facilities; and to sick people whether in hospitals, hospices, outpatient settings, or their homes.

These are also the jobs that cannot be outsourced. Even if we succeed in reviving American manufacturing, the process of automation means that America is almost certain to become even more of a service economy over time. Good service-sector jobs can help replace for good factory jobs.

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This effort would be part of two broader labor-policy shifts that America sorely needs. First, we need to reverse the trend toward casualization of labor that has been occurring for three decades. One of the great advances of the 20th century was regularization of the employment relationship. Through successful social struggle, growth of unions, and enactment of legislation, most jobs came to provide decent wages and fringe benefits. Workers could not be fired without cause. Loyalty to the firm was reciprocated. Grievance systems were created and respected. Economists termed these jobs primary labor-market jobs. Casual, secondary labor-market jobs, which paid less and offered no such guarantees, continued to exist, but they were the exception. In recent years, however, the shift to casual jobs has become the norm, and in low-paid human-service work, casual, high-turnover jobs are the industry standard.

Second, the upgrading of human-service work would reverse another insidious trend -- the employer's habit of trying to increase the efficiency of labor by fragmenting jobs into separate tasks and paying the lowest possible wage for each task -- a strategy known as Taylorism, after the early 20th-century "efficiency expert," Fredrick Winslow Taylor, who first recommended it.

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Writing in the New York Times Week in Review, Louis Uchitelle reviews the recent decline in the floor for wages in the U.S. labor market.

The $20 hourly wage, introduced on a huge scale in the middle of the last century, allowed masses of Americans with no more than a high school education to rise to the middle class. It was a marker, of sorts. And it is on its way to extinction.

Americans greeted the loss with anger and protest when it first began to happen in big numbers in the late 1970s, particularly in the steel industry in Western Pennsylvania. But as layoffs persisted, in Pennsylvania and across the country, through the ’80s and ’90s and right up to today, the protests subsided and acquiescence set in.

Hourly workers had come a long way from the days when employers and unions negotiated a way for them to earn the prizes of the middle class — houses, cars, college educations for their children, comfortable retirements. Even now a residual of that golden age remains, notably in the auto industry. But here, too, wages are falling below the $20-an-hour threshold — $41,600 annually — that many experts consider the minimum income necessary to put a family of four into the middle class.

The nation’s political leaders — Democrats and Republicans alike — have argued that education and training are a route back to middle-class wages for those who have fallen out. But the demand isn’t sufficient to absorb all the workers that the leaders would educate.

…. The trend in the hourly work force is striking. Take only the peak years in each business cycle, starting in 1979. The proportion earning at least $20 an hour declined from 23 percent that year, to 20 percent in 1980, to 18 percent in 1989, and to 16 percent in 2000. Manufacturing was hit the hardest.

Uchitelle doesn’t take the data to the next point, which is a focus of our research at The Mobility Agenda: the high proportion of the U.S. labor market made up of low-wage jobs. Our policy leaders haven’t focused nearly enough on the fact that the U.S. isn't just losing better jobs, growth in low-wage jobs is changing our economy in ways that affect all of us. Our economy is heavily dependent on individual spending. When workers don’t earn enough to take care of daily expenses like housing, transportation, and food – spending and consumption decline. And that hurts the economy for all of us. As is apparent today.

Unfortunately, over 40 million jobs in the United States—about one in three—pay low wages of $11.11 or less, often providing no employment benefits and little flexibility. Even though the United States is among the wealthiest nations in the world, employers pay these workers less than workers who hold similar jobs elsewhere.

The last decade has seen some progress on advancing a number of well-known policies to improve job quality by boosting the minimum wage and expanding publicly subsidized employment benefits, like child care and wage subsidies such as the Earned Income Tax Credit. Likewise, we support efforts to address education and advancement strategies that prepare workers for skilled jobs.

Still, when one worker advances out of a low-wage job and another worker takes it, the job does not change.

In contrast to the manufacturing jobs, many of these jobs are in growth sectors like retail and hospitality, jobs that will not be off-shored because they are geographically specific.

At The Mobility Agenda, we’ve surveyed key contacts across the nation for new ideas and strategies to strengthen the labor market by improving these jobs. State and local stakeholders are experimenting with a host of new initiatives to improve low-wage jobs. These innovative ideas are less well known and are not commonly incorporated into the agenda of advocates and academics. For much more information about these new strategies, see our web based resources on this research, starting here.

Reporter Tony Pugh has an excellent story in the McClatchy papers that uses CEPR economist John Schmitt's research on the decline in good jobs, particularly for workers with only a high school diploma or less. Here are the opening paragraphs that Pugh uses to frame the data:

The steady loss of "good jobs" by less-educated workers has left them more vulnerable to recession than at any time in nearly 30 years, and signs are mounting that a recession is either already here or coming soon.

High school dropouts and even high school graduates who lack specialized job training have seen their already limited employment prospects steadily decline during America's decades-long shift from a manufacturing-based economy to a service economy.

Not long ago, Americans who were unable to attend college could count on finding local factory jobs after high school. The lucky ones landed in muscular industries such as aviation, steel and automobiles, while others found work on assembly lines building durable goods.

These and other "good jobs" were the signature byproducts of a robust economy that once was the envy of the world. The jobs provided stability and decent wages that allowed families to buy homes, provide for their children and retire in modest comfort.

This is a good example of a story that tells a structural economic story effectively. Instead of starting with a sympathy story about an individual worker who is harmed, Pugh describes the overall decline in employment prospects and how they stem from the shift to a service economy. With this framing established, Pugh goes on to tell the stories of two individual laid-off workers, but in both cases he does a good job of explaining the economic factors that led to the layoffs. He also goes back to Schmitt for an explanation of why good jobs are declining:

Helping fuel the loss of good jobs has been a decline in union membership, industry deregulation, increased outsourcing of state and government services and economic policies that focus more on containing inflation than on maintaining full employment, Schmitt said.

My only critique of Pugh's report is that he doesn't say much about how to fix the decline in good jobs. Ideally, he would have gone one step further and provided the thoughts of Schmitt and others on the numerous policy options available to turn bad and so-so jobs into good ones.