Fixing the bad jobs economy
By Herbert J Gans
One of the lesser known facts about the post-recession economy is that while new jobs are being created at near record levels, a significant number are bad jobs. No one knows exactly how many, but in April 2014,the National Employment Law Project, which measured job quality by industry wage level, reported that 44 percent of jobs created (pdf) between 2010 and 2014 were in lower wage industries, compared to 56 percent in mid wage and high wage ones.
The proportion of bad jobs was probably even higher since the study set the low wage floor two dollars above the current federal minimum wage. We also know that growing industries like health and other care as well as tourist related enterprises and many small manufacturing firms all pay minimum wages.
The trend may not even be new, for there is some evidence that the rising proportion of bad jobs goes back as far as the 1970s. John Schmitt and Janelle Jones of the Center for Economic Policy Research estimate the ability and willingness of employers to create good jobs has decreased (pdf) by a third since 1979.
More important, the forces behind the creation of bad jobs remain in place. Global competition with low wage countries, outsourcing of American jobs, increasing computerization and robotization, the political influence of corporate and Wall Street firms and the weakening of unions continue. Moreover, many industries and occupations that depend on low wage workers are still expanding. Consequently, the economy may continue to produce too many bad jobs even when it is also producing record profits for many employers and their shareholders.
A future economy which operates with an ever rising proportion of bad jobs is a horrifying possibility. It depresses consumer demand and thus sets the economy on an ever declining and deflationary path. Bad jobs also harm workers and their families. Frequent budgetary crises, economic worries and feelings of insecurity are known to endanger the physical and mental health of their holders. They can spread to partners, children and family life, and may even scar subsequent generations.
Can Anything Be Done?
In theory, even trends that date back to the 1970s can be reversed, for new goods, services and ideas are invented all the time. A spurt of economic growth in labor-intensive industries and occupations that offer more good jobs would be especially welcome.
In reality, however, the political power holders that protect the current economy are likely to maintain their extraordinary influence over the economy as long as possible, and so government has to take the first step.
Despite the fact that it now lacks political power to reduce the proportion of bad jobs, government already runs a program to help compensate for such jobs. The Earned Income Tax Credit program, which pays working families with children modest sums enough to move many above the poverty line, is now 40 years old and continues to have bipartisan support.
Still, in the long run, government may have to create a significant number of good jobs, especially white, blue and pink collar ones, for example by social and physical infrastructure programs and trillion dollar economic stimuli. It may, however, also need to establish broader and more generous income support programs with a potent and guaranteed impact on consumer demand.
For now, the first step is simply to begin to make the bad jobs problem visible to elected officials and the general public by beginning to establish an official count of bad jobs. This count should be added to the federal monthly jobs reports that now concentrate on the number of new jobs.
Before inaugurating this count, political agreement on the characteristics of bad jobs will be needed – and reaching that agreement should also help bring the problem to public and political attention.
Although job quality is to some extent in the eye of the beholder, there is already widespread agreement that minimum wage jobs are bad.
The counting should therefore begin with minimum and below-minimum wage jobs so that a firm baseline can be established. Future counts will then enable the government to determine whether the proportion of such jobs is increasing significantly. If so, a long term and even permanent bad jobs economy may be developing, and effective policies (and politics) to correct it will be needed.
Broader definitions of bad jobs which include working conditions must also be proposed and agreed on. Even now, jobs are already considered bad if they are temporary, provide only involuntary part time work, subject workers to constantly varying work schedules, offer no time off for worker or family sickness, promise no job security, and lack safe and healthy working conditions.
Counting working conditions would undoubtedly show that many jobs have multiple bad working conditions, suggesting that eventually, levels of badness can be determined, and hopefully agreed on by policy analysts, politicians and the public.
Once the size of the bad jobs problem is known, beginning with minimum and below minimum wage jobs, private and government employers can be encouraged, pressured and incentivized more than at present to improve the quality of their jobs.
Even now, bad job holders themselves have started to exert that pressure, especially those with union or other organizational support. Movements for raising local, state and federal wage minimums to $15 per hour, and for hiking wage hikes in box stores, fast food chains and other minimum wage industries are already under way.
Although some states and localities have joined these efforts, little or nothing can be expected from Washington in today’s political climate. However, if the federal government is ever again headed by an economically liberal president and Congress, it must actively join the movement for higher wages and better working conditions. Workers could also be enabled to help themselves further, for example by being authorized to participate in their employers’ decision making.
Since the effect of low wage jobs on consumer demand hurts the health of the economy, and thereby private enterprise as well, it should also want to exert political pressure. That pressure should be invited from the manufacturing, distribution, retailing and other industries and firms that make their money from consumer purchases of goods and services.
Even under the most ideal conditions, a goodly number of employers, particularly small ones will not be able to eliminate their bad jobs. Those unable to pay their workers more than a minimum wage should be eligible for additional federal income support for these workers.
Likewise, some jobs are accompanied by bad working conditions that cannot be eliminated. Occupational safety programs can do more than they do now to minimize unsafe conditions, but many other bad conditions can best be compensated by higher pay. Some day, perhaps the present practice of forcing the newest poor immigrants and others at the bottom of society into these jobs can be reformed by special wage supplements to those taking such jobs.
Most of the people who now labor in bad jobs have too little power to have them improved. However, If and when significant numbers of workers in the higher socioeconomic classes have to confront the problem and exert their political influence, government and private enterprise may have to start fixing it.
How Sociologists Could Help
The modern sociology of bad jobs goes back at least to Friedrich Engels and Karl Marx, and today, its best known American sociologists working in this area include Annette Bernhardt, Arne Kalleberg and Ruth Milkman.
However, the increasing danger of a rise in the proportion of bad jobs suggests that the sociology of bad jobs needs to grow as a subfield of the sociology of work, and that more researchers have to get involved.
There is much to be done, and now, for if the federal government is not ready to start counting bad jobs, sociologists could begin to do so on a modest scale, both through national surveys and local community studies.
They could also contribute to the definition of bad jobs, particularly by investigating how workers at different socio economic and educational levels, evaluate jobs. Such studies should range from executive and professional ones all the way “down” to the dirtiest unskilled ones, including those in the legal and illegal underground economies no one else is likely to study.
Such empirical projects can also be carried out by policy oriented researchers seeking to find, test and evaluate policy, and political solutions to fix the bad jobs problem.
Most of these studies should also be done on a comparative international scale, not only to learn what happens in other countries and in different political economies, but also to obtain ideas that would strengthen American efforts to fix the bad jobs problem.
Herbert Gans is Robert S. Lynd Professor Emeritus and Special Lecturer, Columbia University, Department of Sociology.
The Earned Income Credit is well regarded by most economists and politicians as a good thing. Yet, why does it feel like a direct subsidy granted to employers of low wage jobs. Why should we hand out taxpayer money to make up the difference between what employers pay and what they should pay?
Don’t get me wrong, I am a big fan of EIC, it is presently essential. But it has BECOME essential and it now simply factored into the wages and is a direct taxpayer subsidy for what is described here as a social ill.
There is much good here, especially the call for higher EITC, but I have to disagree with this:
[Bad jobs] depress[es] consumer demand and thus sets the economy on an ever declining and deflationary path. No, if the Fed is doing its job aggregate demand is not affected by what kinds of jobs are created. Now it is true that the Fed has NOT done it’s job well since 2008 and the slow growth in aggregate demand has contributed to holding wages down. Low aggregate demand depresses wages, low wages do not depress aggregated demand.
A necessary condition for a good job is one that enables a person / family to live on while working the average hours in a week. In other words, whatever the statutory minimum wage is for a job, if one cannot live on it then it is not a ‘good job’. Given the largely symbolic nature of America’s social safety net and the increasing instability of employment a good job should also include the ability to save some income.
Scandavian countries have done better at dealing with the doubling of the global work force since 1990 in low wage counries. Since the late 1970s U.S. government deliberately enacted policies that provided corporations and owners of capital with more of the advantages from that doubling, resulting in stagnant real wages for middle class Americans and declining real wages for working class Americans. Getting lower prices from Asian imports hardly compensated.
Note that several years ago establishment, neo-liberal economists argued that offshoring was a net good because it meant that low wage “low skill” American jobs were shipped to low wage Asian countries and that this in turn created more higher paying “high skill” jobs in America. It was always an absurd claim that owed more to the religious ideology of economists than reality than reason, and one that they quietly ceased to make. For economists since Ricardo trade is necessarily good…in the aggregate. Looking at the distribution of economic burdens and benefits, about the winners and losers, from trade is anathema.
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