Job Quality in the Upside Down Economy

1
Job Quality in the Upside Down Economy

• Eileen Appelbaum, Ph.D.
• Professor, School of Management and Labor
  Relations
• Director, Center for Women and Work Rutgers
• The State University of New Jersey
• Presentation for
• Righting the Upside Down Economy
• Creating a Sustainable Economy
• Center for American Progress
• Mayflower Hotel, Washington, DC
• July 1, 2004

Center for Women and Work Rutgers University
2
Despite Expansionary Macro Policies, Share of
Americans with Jobs Declining
Source CEPR analysis of BLS data Current
Population Survey
3
What Is Happening to Job Quality?

• Establishment data 1.35 million net new jobs
  created May 2003 to May 2004
• 56 were in low-wage service industries
• Household data 1.27 million increase in
  employment
• Part-time employment increased by 674,000
  equivalent to 53 of the increase in employment
• Real wages are declining
• Long-term trend Lots of poor quality, low-paying
  jobs

4
Private Sector Job Growth May 2003-May
2004Selected Industries (Establishment Data)
Center for Women and Work Rutgers University
Source BLS The Employment Situation June 2004,
Table B-1
5
Part-Time Job Growth May 2003-May 2004
(Household Data)
Center for Women and Work Rutgers University
Source BLS The Employment Situation June 2004,
Table B-1
6
Real Average Hourly Earnings Total Private
Sector (1982 Dollars)
Center for Women and Work Rutgers University
Source U.S. Dept of Labor, BLS, National
Employment, Hours Earnings.
7
Employment Change by Wage Quintile 1999-2002
Jobs
Source BLS, Occupational Employment Statistics.
Source BLS, Occupational Employment Statistics.
Progressive Policy Institute, May 2004.
8
Top Ten Occupations with Largest Job Growth,
2002-2012
(Numbers in thousands of jobs)
Employment Change Rank by 2002 Most
significant source median
annual of postsecondary Occupation
title 2002 2012 Number Percent earnings
(a) education or training Registered
nurses 2,284 2,908 623 27 1 Associate
degree Postsecondary teachers 1,581 2,184
603 38 1 Doctoral degree Retail
salespersons 4,076 4,672 596 15 4 Short
on-the-job training Customer service
reps. 1,894 2,354 460 24 3 Medium on-the-job
training Food prep serving workers 1,990 2,444
454 23 4 Short on-the-job training Cashiers,
except gaming 3,432 3,886 454 13 4 Short
on-the-job training Janitors and cleaners
except 2,267 2,681 414 18 4 Short on-the-job
training maids and housekeeping Gene
ral operations managers 2,049 2,425
376 18 1 Bachelor's or higher work
exp. Waiters and waitresses 2,097 2,464
367 18 4 Short on-the-job training Nursing
aides, orderlies, and 1,375 1,718
343 25 3 Short on-the-job training
attendant Note (a) 1 41,820 and over (very
high), 2 27,500 to 41,780 (high), 3 19,710
to 27,380 (low), and 4 below 19,601 (very
low). These are quartile rankings.
That is, a quarter of wage and salary workers
earn 41,820 or more, a quarter earn less than
19,601, and so on.
Source D.E. Hecker, Occupational Employment
Projections to 2012, Monthly Labor Review, Feb.
2004, Table 4
Center for Women and Work Rutgers University
9
Projected Job Growth by Wage Quintile 2002 to
2012
Job Growth ()
Source BLS, Occupational Employment Statistics.
Progressive Policy Institute, May 2004.
10
Why Arent These Middle Class Jobs?

• Cant blame foreign competition or outsourcing
• No countervailing force to the blind and mistaken
  pursuit of profit
• Unions lack membership density
• Government has abdicated responsibility for
  setting minimum acceptable standards
• Low-wage policies not good for companies

11
Higher Wages Higher ProfitsCostco vs. Wal-Mart

• Costco Wal-Marts
  Sams Club
• Average hourly wage 15.97 11.52
• Annual health costs per worker 5,735 3,500
• Covered by health plan 82 47
• Annual retirement costs per worker 1,330 747
• Covered by retirement plans 91 64
• Employee turnover 6 a year 21 a year
• Labor and overhead costs 9.8 of sales 17 of
  sales
• Sales per square foot 795 516
• Profits per employee 13,647 11,039
• Yearly operating income growth 10.1 9.8

Excludes 25 of workforce that is lower
paid part-time workers Those on the job for
less than a year are not covered For all
Wal-Mart Over the past 5 years in the
U.S. Source S. Holmes and W. Zellner, The
Costco Way, BusinessWeek, April 12, 2004, pp.
76-77
Center for Women and Work Rutgers University
12
What Can Government Do?

• Help companies be good employers reestablish
  standards in labor markets
• Raise minimum wage and peg to half the average
  wage (7.75 today)
• Guarantee minimum number of paid sick days
• California-style Paid Family Medical Leave
• Bring health care costs under control
• Innovative training for incumbent workers
• Support creation of local networks of firms
• Provide access to training, resources
• Benchmark technology, management, quality
• Seek out new niche and export markets