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Decline of Good Jobs Tied to Workers’ Decreased Bargaining Power

Many U.S. workers don’t have jobs—nearly 13 million. Less known, however, is that many more don’t have good jobs—fewer than one-quarter of America’s workforce, according to a new report from the Center for Economic and Policy Research (CEPR). The center defines a good job as one that pays at least $18.50 an hour, or $37,000 per year, equal to the inflation-adjusted earnings of the typical male worker in 1979.  A good job also includes employer-provided health insurance and a retirement plan (click on chart at left to expand).

The lack of available good jobs is not new. As CEPR finds, compared with 1979, the U.S. economy has lost about one-third (28 percent to 38 percent) of its capacity to generate good jobs.

But why?

The report, “Where Have All the Good Jobs Gone?” outlines how the decline in the economy’s ability to produce good jobs is directly related workers’ declining bargaining power. The study points to the fall in the inflation-adjusted value of the minimum wage, the decline in union representation, trade deals, high unemployment and other factors that reduce the bargaining power of workers relative to their employers.

“The standard explanation for this loss of the economy’s ability to create good jobs is that most workers skills have not kept up with the pace of technological change,” says John Schmitt, senior economist at CEPR and one of the report's co-authors.

But it is hard to reconcile that view with the fact that even workers with a college degree are less likely to have a good job now than at the end of the 1970s.

Further, according to the report, more than one-third of U.S. workers had a four-year college degree or more, up from just one-fifth in 1979.

Given that older and better-educated workers generally receive higher pay and better benefits, we would have expected the share of “good  jobs” in the economy to have increased in line with improvements in the quality of workforce. Instead, the share of “good jobs” in the U.S. economy has actually fallen.

Get the full report here.

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