From Decent to Lousy Jobs: New Evidence on the Decline in American Job Quality, 1979-2017

Authors:

David R. Howell, The New School

Abstract:

A defining feature of the post-1970s American economy has been unshared growth, strikingly illustrated by the absolute decline in average incomes for the bottom 50 percent of working-age adults. This regressive growth path should have important implications for the share and distribution of decent jobs. This paper uses Current Population Survey data to document changes in job quality for 1979-2017 with measures of decent-, low- and lousy-wage jobs for groups defined by age, gender, education, race and nativity. These indicators are defined by two wage threshold formulas chosen to reflect the wage a full-time worker requires for a basic-needs budget: 2/3 of the mean wage for full-time prime-age workers ($17.50 in 2017), which marks the cutoff between decent- and low-wage jobs; and 2/3 of the median full-time wage ($13.33), the boundary between lousy- and other low-wage jobs. These thresholds generate decent- and low-wage segments (55% and 45% of jobs in 2017), each with two wage contours. A wide variety of non-wage job quality indicators (e.g., benefits, time-off, work scheduling and physical conditions) are found to vary systematically across these four wage contours, from worst in the lousy-wage contour (29% of jobs) to best in the good-wage contour (33% of jobs).

In contrast to much of the recent literature, I find neither “declining-middle’ polarization nor a stable incidence of low- and lousy-wage jobs. Instead, there has been a long-term shift from decent to lousy jobs, particularly striking for young (18-34) workers. There are three sets of main findings. First, the share of decent-wage jobs for all workers fell from 60.4 to 54.8% between 1979 and 2017; for young workers without a college degree, this share fell from 46.6 to 22.9%; and for young workers with at least a college-degree, from 77.5 to 70.3%. Second, using the 1980s as the baseline, there has been a large and persistent post-1990 decoupling of the number of decent jobs from GDP growth. And third, the lousy-job rate for young non-college-degree men increased from 26.6 to 50.9% between 1979 and 2017; it also increased sharply for young women between 2001 and 2017, both for those without a college degree (from 55.1 to 66.4%) and with a degree (from 12 to 17.9%). The lousy-job gender and nativity gaps narrowed considerably, indicating large declines in native-born male advantage, but the racial lousy-job gap has widened for both men and women.

The concentration of young workers in lousy- and low-wage jobs in rapidly growing service sectors like retail trade and food, healthcare and educational services suggests that their plummeting decent-job rates cannot be adequately explained by supply-side failures to invest in education or by the job-destroying forces of globalization and computerization. More consistent with this paper’s job quality results are major shifts in institutions, policies and employer human resource strategies that have undermined worker bargaining power.