Politics Faulted for Loss of Good Jobs

 A new report by the Center for Economic and Policy Research says fewer  American workers today have a “good job” compared to the past, largely because of policy decisions that have undercut labor.

According to the report,  Where Have All the Good Jobs Gone, fewer than a quarter of American workers have a “good job.”

 A good job is defined as one that pays at least $37,000 per year, has employer-provided health insurance and an employer-sponsored retirement plan.

 The report states that one-fourth (24.6 percent) of the workforce in 2010 (the most recent year for which data are available) had a “good job.” This figure was down from 27.4 percent in 1979.

 The report’s authors, John Smith and Janelle Jones, attribute the decline in good jobs to policy decisions, rooted in politics, that have resulted in a drastic loss of workers’ bargaining power and the restructuring of the labor market since the end of the 1970s.

They say the American economy has lost about one-third of its capacity to generate good jobs since 1979. 

 According to the report:

  •  The share of private-sector workers who are unionized fell from 23 percent in 1979 to less than 8 percent today.
  •  The inflation-adjusted value of the minimum wage today is 15 percent below what it was in 1979.
  • Several large industries, including trucking, airlines, telecommunications, and others, have been deregulated, often at a substantial cost to their workers.
  •  Many jobs in state and local government have been privatized and outsourced.
  •  Trade policy has put low- and middle-wage workers in the United States in direct competition with typically much lower-wage workers in the rest of the world.  
  • A dysfunctional immigration system has left a growing share of our immigrant population at the mercy of their employers, while increasing competitive pressures on low-wage workers born in the United States.
  • Fiinally, leaders have placed  increased emphasis on controlling inflation rather than achieving full employment.

 “In our view, these policy decisions, rooted in politics, are the main explanations for the decline in the economy’s ability to generate good jobs,” state the authors.

  The report says the data show only minor differences in the deterioration of the economy’s ability to generate good jobs between 2007, before the Great Recession began, and 2010, the low point for the labor market. The deterioration relects long-run changes in the U.S. economy, not short-run factors related to the recession or recent economic policy.

 The report  controls for the age and education of the American workforce.

* The Center for Economic and Policy Research (CEPR) was established in 1999 to promote democratic debate on the most important economic and social issues that affect people’s lives.