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
Despite Expansionary Macro Policies,
Share of Americans with Jobs Declining
Source: CEPR analysis of BLS data: Current Population Survey
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, lowpaying jobs
Private Sector Job Growth:
May 2003-May 2004
Selected Industries (Establishment Data)
Industry
Total Non Agriculture
May-03
(000)
May-04
(000)
Change
(000)
129,873
131,224
1,351
21,859
14,574
21,902
14,405
43
-169
Service Producing
108,014
Retail Trade
14,917
Temporary Help
2,200
Service to Bldgs & Dwellings
1,629
Home Health & Nursing Home
2,309
Child Day Care
758
Food Service & Drinking Places
8,533
Subtotal Selected Service Producing Jobs
109,322
15,060
2,458
1,682
2,337
775
8,792
1,308
143
258
53
28
17
259
758
Goods Producing
Manufacturing
Source: BLS The Employment Situation: June 2004, Table B-1
Center for Women and Work
Rutgers University
Part-Time Job Growth:
May 2003-May 2004
(Household Data)
May-03
(000)
Total Employment
Part-time Employment
(non agricultural)
May-04 Change
(000)
(000)
137,505
138,772
1,267
23,151
23,825
674
Center for Women and Work
Source: BLS The Employment Situation: June 2004, Table B-1
Rutgers University
Real Average Hourly Earnings
Total Private Sector (1982 Dollars)
Year
Real Wages
Percent Change
from Previous Year
May 1995
May 1996
May 1997
May 1998
May 1999
7.50
7.54
7.67
7.88
8.00
0.5
1.7
2.7
1.5
May 2000
May 2001
May 2002
May 2003
May 2004
8.03
8.13
8.21
8.28
8.22
0.4
1.2
1.0
0.9
-0.7
Source: U.S. Dept of Labor, BLS, National Employment, Hours & Earnings.
--
Center for Women and Work
Rutgers University
Employment Change by Wage Quintile
1999-2002
700,000
600,000
500,000
Jobs
400,000
300,000
200,000
100,000
0
-100,000
-200,000
Highest
2nd Highest
Source: BLS, Occupational Employment Statistics.
Progressive Policy Institute, May 2004.
Middle
2nd Lowest
Lowest
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
Number Percent earnings (a)
education or training
Occupation title
2002
2012
Registered nurses
Postsecondary teachers
Retail salespersons
Customer service reps.
Food prep & serving workers
Cashiers, except gaming
Janitors and cleaners except
maids and housekeeping
General operations managers
Waiters and waitresses
Nursing aides, orderlies, and
attendant
2,284
1,581
4,076
1,894
1,990
3,432
2,267
2,908
2,184
4,672
2,354
2,444
3,886
2,681
623
603
596
460
454
454
414
27
38
15
24
23
13
18
1
1
4
3
4
4
4
Associate degree
Doctoral degree
Short on-the-job training
Medium on-the-job training
Short on-the-job training
Short on-the-job training
Short on-the-job training
2,049
2,097
1,375
2,425
2,464
1,718
376
367
343
18
18
25
1
4
3
Bachelor's or higher + work exp.
Short on-the-job training
Short on-the-job training
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
Projected Job Growth by Wage
Quintile: 2002 to 2012
25
20
15
Job Growth (%)
10
5
0
Highest
Second
Highest
Source: BLS, Occupational Employment Statistics.
Progressive Policy Institute, May 2004.
Middle
Second
Lowest
Lowest
Why Aren’t These Middle Class Jobs?
 Can’t 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
Higher Wages = Higher Profits
Costco vs. Wal-Mart
Average hourly wage
Annual health costs per worker
Covered by health plan
Annual retirement costs per worker
Covered by retirement plans
Employee turnover
Labor and overhead costs
Sales per square foot
Profits per employee
Yearly operating income growth****
Costco
Wal-Mart’s
Sam’s Club
$15.97
$5,735
82%
$1,330
91%**
6% a year
9.8% of sales
$795
$13,647
10.1%
$11.52*
$3,500
47%
$747
64%
21% a year
17% of sales***
$516
$11,039
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
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