The Good Jobs Deficit

Demonstration in Bentonville, Arkansas (OUR Walmart, Flickr)

The recent job actions and “Black Friday” protests at Walmart underscored the dismal wages and working conditions of many of the nation’s retail workers. Walmart hasn’t staked out some low-wage, no-benefit margin of the labor market: its labor and compensation practices are now the mainstream. For most of the last century, the worst employers in the United States—the tenement sweatshop, the company-town mine—were remnants of our past. Today, they are glimpses into our future.

Consider wages. While productivity grew about 80 percent between 1973 and 2011, the real hourly wages of the median worker barely budged—inching up only 4 percent over a generation. Slow wage growth reflects the slipping value of the minimum wage, the harshly uneven impact of globalization, and the steady erosion of union density and workers’ bargaining power. It also reflects the long shadow of deindustrialization, in which good jobs for those of modest educational attainment have been displaced by “Walmart” jobs.

Consider benefits. Public policy (Social Security and our patchwork health system) remains organized around the expectation of job-based pension and health coverage. But the share of workers offered such coverage, or able to afford their share of the costs when it is offered, continues to fall. A decade ago, about 70 percent of the under-sixty-five population had job-based health-care coverage. Today, that share sits at barely 58 percent. Again, some of this is driven by declining rates of coverage across the economy, but much of it is driven by job growth dominated by low-wage, no-benefit occupations.

The long view, looking back over the last generation, shows increased polarization in the labor market: job growth has been robust in a few high-skill, high-wage, managerial and technical fields, and in the low-skill, low-wage, service occupations. But the middle—decent jobs with decent benefits for those without college degrees—has evaporated. A shorter view, looking across the last business cycle, confirms the general trend. As the National Employment Law Project has ably documented (here and updated here), job losses during the recession were concentrated in mid-wage occupations, while job gains during the recovery have been concentrated at the low end.

This is not an artifact of a growing educational gap, in which workers with skills pull away from everyone else. Indeed, as researchers at the Center for Economic and Policy Research have shown (here, here, and here), today’s low-wage workers are older, more experienced, and better educated than ever. If you look closely at the jobs we have and the wages they pay, it is hard to see a way in which we educate our way out of this mess. The problem, as Adam Davidson and others have underscored, is not that workers lack the necessary skills; it is that skilled jobs don’t pay a living wage.

Where are we headed? The Bureau of Labor Statistics runs an ongoing employment projections program, with the current version (released last February) estimating occupational openings (from growth and replacements) for 2010-2020. I’ve summarized the results in the graphic below. Each dot represents an occupation. 2010 employment numbers run up the vertical axis; the projected openings for 2010-20 run along the horizontal access. The selection can be narrowed by the educational background needed for an entry-level job, or by the number of projected openings. The dots are colored according to the median annual wage for that occupation in 2010—red is lower than the economy-wide median wage of $33,800, green is higher. Move your mouse over the dot to see the occupation and its details.

The future, in a nutshell, is not bright. Only about a fifth of the projected openings even require a bachelor’s degree, and very nearly half require no more than a high-school diploma. About three-quarters of all projected openings pay less than the 2010 median wage. Fully one-third of projected job openings are in low-wage service occupations. Indeed, if you narrow the range (using the “openings” slider) to those jobs with 650,000 or more projected openings through 2020, you are left with twelve occupations—eleven of which pay sub-median wages, nine of which pay less than $25,000, and five of which pay less than $20,000. Welcome to Walmart.