U.S. Economy and Jobs
Written by Faith Anderson on August 2, 2012
Components of a “Good” Job
In order to be considered “good,” a job must pay at least $18.50 an hour – the median hourly pay, in inflation-adjusted 2010 dollars, for men in 1979 – or about $37,000 per year. In 2010, about 47% of workers were above the $18.50 hourly rate, up from 40.6% in 1979. The second component is participation in an employer-sponsored retirement plan – pension and 401(k) plan. Finally, the third requirement of a good job is an employer-sponsored health-insurance plan, in which the employer pays at least some portion of the premium. Between 1979 and 2010, employer-provided health coverage declined significantly – nearly 13%.
Economy Unable to Generate Good Jobs
The major question is: What’s holding back the economy’s ability to generate jobs that are considered “good?” Although one common explanation is a skills gap – we have an 8.2% unemployment rate but companies are still reporting trouble filling positions due to a lack of qualified applicants – Schmitt contends that opinion. “If that were true and widespread, we’d see wages of workers rising, because employers would try to steal qualified workers from other employers.” He continues, “We’re not seeing that in the data – we’re not seeing an increase in wages relative to last year, or the year before, or before that.” Schmitt instead attributes the drop-off to a “deterioration in the bargaining power of workers, especially those at the middle and the bottom of the income scale.” The restructuring of the labor market that began in the late 70s and continues today, Schmitt explains, has resulted in a decrease in the number of unionized workers; the deregulation of large industries; the privatization of many state and local government jobs; and the minimum wage rate today, adjusted for inflation, is 15% below what it was in 1979. “The recession hurt, but the trends were longstanding,” Schmitt says.