Russell Sage Foundation, Chris Tilly, 'The Good, The Bad ...
Copyright 1996. Preferred Citation: Chris Tilly, "The Good, The Bad, and The Ugly: Good and Bad Jobs in the United States at the Millennium."(Russell Sage Foundation: June 1996 []).
THE GOOD, THE BAD, AND THE UGLY: GOOD AND BAD JOBS IN THE UNITED STATES AT THE MILLENNIUM
Chris Tilly
Visiting Scholar
Russell Sage Foundation
112 E. 64th Street
New York, NY 10021
USA
and
Department of Policy and Planning
University of Massachusetts
Lowell, MA 01854
USA
tillyc@woods.uml.edu
June 25, 1996
Introduction
Conceptual issues
The state of the art in measuring job equality
Seven dimensions of job quality
Wages
Fringe benefits
Due Process
Hours flexibility
Permanence
Mobility
Control over the work process
Summing up the seven components
Why, so what, and what to do about it
References
Paper prepared for presentation at conference on "Jobs and Justice: Towards Improving the Employment Relationship," Pennsylvania State University, June 26-29, 1996. I thank the Russell Sage Foundation for support during the writing of this paper.
Introduction
Twenty-five years ago, in 1971, Peter Doeringer and Michael Piore published their classic Internal Labor Markets and Manpower Analysis, which, among other things, explored the distinction between primary and secondary labor markets. Twenty-five years ago, we in the United States thought we knew the difference between good and bad jobs--a difference conceptualized in the primary/secondary distinction. Good jobs were well-paid, secure, and connected to paths of upward mobility. Bad jobs were low-paid, unstable, and dead-end. This distinction was hitched to the powerful post-World War II optimism about economic growth. In this optimistic framework, bad jobs were peripheral and to a large extent vestigial--in the process of being swept away by U.S. economic progress.
Today, this picture of good and bad jobs has been altered in three ways. First, people place more value on issues such as autonomy and fulfillment on the job, and on balancing work and family, reducing the dominance of bread and butter issues such as wage levels. Second, the business press, along with some scholars, have challenged the notion that a good job is a stable one, proposing instead that good jobs are stops--often quite short ones--in an upward career trajectory. Third, and most important, bad jobs can no longer be described as vestigial. They form a central, and by many measures growing portion of employment in the United States. This "ugly" fact motivates this paper's title.
The core of this paper, in fact, dwells on the last point, reviewing what is known about a variety of job characteristics in the United States to build a case that jobs have, on average, gotten worse. But before proceeding to that review, I start by discussing conceptual issues, and assessing the state of the art in measuring good and bad jobs. And after the review of job characteristics, I briefly discuss the causes of changes in job quality, and possible policy responses.
Conceptual issues
Jobs represent one particular way of organizing work. Work, in turn, includes any human effort adding use value to goods and services. However much their performers may enjoy or loathe the effort, conversation, song, decoration, pornography, table-setting, gardening, housecleaning, and repair of broken toys all involve work to the extent that they increase satisfactions their consumers gain from them. Prior to the 20th century, most of the world's workers performed the bulk of their work in other settings than salaried jobs as we know them today. Only a prejudice bred by western capitalism and its industrial labor markets fixes on strenuous effort expended for money payment outside the home as "real work", relegating other efforts to amusement, crime, and mere housekeeping.
Nonetheless, analysis of jobs directs our attention to this zone of "real work." Conceptually, we can build up from transactions, to contracts, via networks, to jobs (Tilly and Tilly 1994). Although solitary workers certainly exist, in general work depends on transactions among parties, notably between producers and immediate recipients of use value added by work. Transactions consist of interpersonal transfers of information and/or goods of which the parties are aware; they become work transactions when the effort of at least one party adds value to the element transferred. Organized, durable transactions cluster into implicit or explicit work contracts stipulating parties, rights, obligations, and sanctions to the transactions in question. Work contracts differ from mere accumulations of work transactions in featuring enforceable agreements that govern durations, limits, enforcement mechanisms, and relations among transactions.
Work contracts are typically embedded within a variety of social networks, including production networks. Social networks in general are sets of relations among persons, organizations, communities, or other social units. Most commonly we think of a single network as the set of relations among specified actors of a given type defined by a certain kind of tie: for example, the interlocking of corporate boards of directors or shared involvement among supporters of a social movement. A production network consists simply of a connected set of work contracts linking multiple producers and recipients. The social structure of work centers on concatenated contracts; jobs, occupations, careers, firms, unions, labor markets, discrimination, and inequality all appear as special cases or outcomes of that concatenation.
Finally, a job is a cumulation of work contracts assigned durably and formally to a single person; it therefore does not constitute a network as such, but a junction of two or more networks. A person may hold more than one job at a time, two persons may have the "same" job, and jobs always entail interaction with other persons, but the basic matching of roles with individuals marks off jobs from other ways of organizing work. A lathe operator in a shop has a job, but a freelance writer does not. An actor typically holds a sequence of jobs punctuated by unemployment, but a street mime has no job.
Having specified what a job is, we still face conceptual difficulties on the way to defining a good job. The term "good job" implies that certain jobs are good regardless of who holds them. In effect, we are assuming that the ranking of jobs is conceptually prior to the sorting of people among these jobs (Granovetter and Tilly 1988). But in fact, this is an oversimplification. A job's holder brings particular expectations to a job, and the employer's view of the job is colored by the worker holding it. Thus, job-holders shape jobs. In some cases they set out to mold their jobs in individualized and conscious ways (Miller 1988). In other cases, the talent, skills, or productivity of the incumbent are decisive: established stars get paid more for acting in a movie than unknowns. But the largest impact of job-holder characteristics on jobs occurs when there is large-scale occupational or industrial segregation, such as job segregation by gender. Paula England and colleagues (1994) have demonstrated that in the United States, the percent female in an occupation lowers the pay it offers to both women and men. Though gender segregation itself is a constant across societies, there is enormous variation in which jobs are defined as male and female (Reskin and Hartman 1986, p.7). Despite this variation, women's jobs are in general valued less--indicating that job-holder characteristics, rather than the intrinsic characteristics of the job itself, contribute powerfully to the valuation process. Having noted this difficulty, I will proceed to ignore it for much of the paper, treating jobs as independent of their holders to simplify the analysis.
Yet another conceptual issue is the extent to which various job characteristics cluster. According to a labor market segmentation perspective, particular sets of characteristics or governing rules tend to be found together: "It is not possible, as it were, to pick a rule from each category and establish a stable set of employment relationships," remarks Paul Osterman (1985: 58). "Rather, only certain configurations of rules fit together." This points to multiple, qualitative distinctions between good and bad jobs. Labor market segmentation, in turn, is typically held to link production networks to other social networks of recruitment and supply--once more eroding the distinction between job and job-holder.
A neoclassical perspective, in contrast, adopts a "hedonic" view of job quality: each job is a bundle of characteristics that may be varied at will (within certain limits) by employers; workers with varying valuations of these characteristics vote with their feet by choosing to apply for particular jobs, clearing the market. There is no reason to expect that a job that is bad in one way will also be bad in other ways; indeed, the theory of compensating differentials predicts that undesirable aspects of jobs will on average be offset by higher wages (Rosen 1986). This does not mean that all jobs are equally good, but it does imply that (1) the distinction between good and bad jobs is a finely graded continuum, rather than a qualitative break, and (2) there is no reason to expect that all good jobs, nor all bad jobs, will have particular features in common.
Empirical research has left this choice between segmented and hedonic versions of job quality at a standoff. Job characteristics do cluster--and, in particular, good jobs tend to be good along many dimensions--but the clustering is far from perfect. Compensating differentials are found in a few cases (particularly in compensating for the risk of death), but only a few. In this paper, I will draw most heavily on segmentation-based analysis, but will nonetheless consider major job characteristics separately, neoclassical-style.
Another issue is a familiar one: aggregation, and the use of measures of central tendency to summarize distributions, may obscure important variation. For example, based on mean characteristics, part-time jobs are bad jobs. They offer lower pay and fewer benefits, and have higher turnover than other jobs. But while most part-time jobs do conform to this profile, a small subset are good jobs--in some ways better than the full-time jobs that surround them. These are part-time jobs, often at a professional level, created to meet the needs of valued employees. Such part-time jobs typically offer equal hourly wages and the standard benefit package (amounting to more benefits on a per-hour basis), long-term attachment to the business, and added schedule flexibility (Tilly 1992, 1996). Similarly, tracking the mean or median wage over time as an indicator of job quality is inadequate if wage inequality is growing over time--as it has been.
A final conceptual/empirical issue deserving of particular attention is that the definition of a "good job" is itself a moving target. Specifically, there is evidence that succeeding generations of workers have placed decreasing emphasis on material rewards, and more on enjoyment of the job and a feeling of making a meaningful contribution--what Daniel Yankelovich (1993) calls "expressive" values. Yankelovich documents that there has indeed been a seachange in this direction in the United States. When a 1962 Gallup poll asked about the "formula for success in today's America," only six percent mentioned having a job that one enjoys doing; in a 1983 poll with similar wording the percentage rose to 49 percent. Among 30- to 40-year-old men and women surveyed in 1986, 60 percent stated that they placed much more emphasis on "pursuing satisfaction in a career" than their parents did; only 13 percent felt they placed less emphasis on such satisfaction.
Cross-national surveys show similar trends at work in most industrialized countries (Yankelovich et al 1985). Particularly intriguing is the case of Sweden, whose economy's dominant sector has rapidly shifted from primary (agriculture, forestry, fisheries) to secondary (manufacturing) to tertiary (services). This shift is reflected in the attitudes toward work of successive age cohorts: the oldest cite survival and sustenance as the main reasons for work, Swedes in their middle years cite material success, and young Swedes are more likely than their elders to cite instead the realization of expressive values.
The move toward expressive values raises two important measurement issues. First, measurements of job characteristics along these dimensions are inevitably far more subjective than measures of--say--the purchasing power of a dollar of wages. Whether one can even imagine a job serving as a source of personal fulfillment is largely determined by social context--the shared values embedded in production networks and other social networks--as well as economic well-being. And second, a shift in values implies that the "weights" of different characteristics contributing to job quality are not themselves fixed. Both of these render assessment of changes in job quality over time more difficult, and indeed, no consistent time series of fulfillment on the job exist.
However, from the viewpoint of those of us struggling to measure job quality, it is comforting to note that the shift in values has not yet become a complete reversal. In no country has the emphasis on expressive values eclipsed material measures of success. In 1991, 40 percent of Americans still rated material success as most important, compared to only 22 percent putting intangibles at the top (Yankelovich 1993). Even among the Swedes, the nationality most likely to rate expressive values the most important aspect of work, fewer than one in four embraced this prioritization (Yankelovich et al 1985). So while flagging this as a central problem for future research, I will pay little attention to jobs as a source of fulfillment in the empirical section of the paper.
The state of the art in measuring job quality
The last significant advance in measuring job quality in the United States was accomplished by Christopher Jencks, Lauri Perman, and Lee Rainwater (1988). They conducted a Survey of Job Characteristics in 1980, asking each worker to rate his or her job on a ratio scale in which an average job scores 100 (so a job twice as good as the average job would be rated 200). Jencks and colleagues regressed these scores on 48 job characteristics, including earnings, whether one gets dirty on the job, the degree of repetitiveness, and so on. They selected the 14 variables whose standardized coefficients fell above a certain cutoff, and proposed the predicted job score based on this set of 14 variables and coefficients as an Index of Job Desirability. Essentially, this empirically implements a hedonic model of job quality: each characteristic is assumed to independently contribute to the overall quality of the job.
What makes this Index of Job Desirability (IJD) an advance? As Jencks and co-authors point out, in most work on job quality economists use a single measure--earnings; sociologists use another single measure--occupational status. Such single-measure choices are understandable, since data are readily available to construct these measures. However, each of these measurement strategies has flaws. Earnings omits the impact of other job characteristics; Jencks et al. demonstrate that variation in non-monetary elements of the IJD is more than twice as large as variation in earnings (see also Rosenthal 1989). Occupational categories combine vastly disparate jobs (consider the wide range of jobs falling within "salaried manager: business services"). Most variation in the 14 components of the IJD takes place within three-digit occupational categories. The IJD does a better job of accounting for the impact of race, sex, education, and labor market experience on labor-market success than do earnings or standard occupational status measures.
Examining the IJD teaches us two main lessons. First, despite their shortcomings, earnings and occupational status are not bad as quick-and-dirty measures of job quality. Both are strongly correlated with the IJD index itself. And both have the relationship with most of the components of the index that would be predicted by a segmentation perspective: a negative correlation with getting dirty on the job, a positive correlation with the number of vacation weeks, and so on. Second, both bread-and-butter job traits and issues of fulfillment at work contribute strongly to job satisfaction. The index includes earnings (+), weeks of vacation (+), and the risk of job loss (-), but also includes task repetitiveness (-), frequency of supervision (-), the average education of people in this job (+), and the ability to decide on one's own hours (+). Third, however,
The problem with the IJD, of course, is that it was based on a one-time survey, rendering broader applications or tracking of change over time problematic. Furthermore, it finesses the issue of defining what a "job" is, taking workers' definitions of jobs for granted rather than distinguishing between jobs and less formalized and durable work contracts and less formalized and durable work contracts. For both of these reasons, I retreat from this approach in the rest of the paper, instead relying on a series of individual indicators of job quality. However, workers' valuations of various job characteristics within the IJD inform the remainder of the discussion.
Seven dimensions of job quality
Have jobs in the United States gotten better or worse? Lacking an adequate single summary measure of job quality in the United States, I review evidence on seven partial measures. The seven are: (1) wages, (2) fringe benefits, (3) due process in discipline, (4) hours flexibility, (5) permanence, (6) upward mobility, and (7) control over the work process. In each case, I focus on change in the relevant variable, assessing the nature of change and sizing up its impact on job quality. In some cases, the contribution of the factor to overall job quality is clear: all else equal, more wages is better than less. In other cases, the impact is ambiguous on the face of it (does permanence in a job denote security, or stagnation?), or the nature of the characteristic has changed over time (interfirm mobility displacing intra-firm mobility). But even in ambiguous cases, a closer examination of trends often offers insight into how we should judge job changes. Evidence of deteriorating job quality turns up across a wide range of indicators, suggesting that recent shifts signify worse jobs regardless of what change in evaluative criteria one posits.
Wages
The real hourly wage of production and nonsupervisory workers in nonagricultural private industries fell by 13 percent between 1973 and 1995 (U.S. Council of Economic Advisors 1996a, Table B-43). This marks a dramatic reversal: for every year between 1959 and 1973, the real wage rose, during recession and expansion alike. The declining average wage tells only part of the bad news, because earnings inequality also increased. Between 1979 and 1993, the hourly earnings of a full-time worker at the 90th percentile (earning more than 90 percent of other workers) relative to a worker at the 10th percentile, increased by 31 percent for men and by 42 percent for women (Table 1, calculated from Houseman 1995, Table 6). In fact, earnings inequality widened along most dimensions: by race, by level of education, by industry. So low-wage workers endured even greater wage losses, while high-wage workers saw wages improve--only slightly for men, but significantly among women. Male high school dropouts suffered a 36 percent plunge in real median hourly wages between 1979 and 1993 (Houseman 1995, Table 7). But earnings inequality also grew within each education category. Even among college graduates, many struggled. In 1991, one in six working male college graduates aged 25-34 with no post-baccalaureate degree, and one in four of their female counterparts, earned less than the poverty line for a family of four (about $16,000 in today's dollars) (Danziger and Gottschalk 1995).
The great irony is that the overall wage loss took place at a time of increasing skill levels (Cappelli 1993, Howell and Wolff 1991). Indeed, job growth in the 1970s and 1980s was concentrated in occupations that paid above the median wage--for the most part, more skilled occupations (McMahon and Tschetter 1986, Rosenthal 1985, U.S. Bureau of Labor Statistics 1994, U.S. Council of Economic Advisors 1996b). There was thus an apparent paradox: on the one hand, the relative wage payoff to education and skill increased dramatically. But on the other hand, the workforce as a whole did not reap the payoff from its increasing educational attainment and skill (Mishel and Teixeira 1990).
The one dimension along which wage inequality did not widen over the last two decades is gender. As Table 1 shows, the ratio of female to male median hourly wages increased markedly between 1979 and 1993. But the table also illustrates that women's relative improvement stems primarily from the decline in men's real wages, not from a substantial rise in women's pay. Moreover, the combination of falling male wages and increases in single motherhood means that women as a group have to do more paid work to sustain their families, and that women are more likely to end up in poverty (Albelda and Tilly forthcoming).
Fringe benefits
In response to alarm about falling real wages, some observers argue that the wage is simply the wrong measure of compensation. Herbert Stein (1995), for instance, points out that although real wages fell while productivity rose, real total compensation has tracked productivity much more closely. The difference: total compensation includes fringe benefits as well as wages, and the value of fringe benefits has been growing relative to wages.
However, including benefits in the picture is not as comforting as it first appears. For one thing, U.S. productivity (and therefore, U.S. compensation) lagged behind productivity growth in other industrialized countries. U.S. real output per worker (a measure of productivity) grew only about two-thirds as fast as output in Western Europe, and one-third as fast as in Japan, between 1979 and 1990 (Freeman 1994, p.26).
Inequality also clouds the picture. Though real compensation increased on average, real hourly compensation for production workers in manufacturing slipped backwards by close to one percent between 1979 and 1992, as manufacturing output per worker grew (Mishel and Bernstein 1994, Table 8.4).
Even more troubling, the rise in the value of fringe benefits over the last 20 years is driven primarily by the rising cost of health care (Mishel and Bernstein 1994, Ch.3). Rather than reflecting broad improvements in workers' quality of life, it indicates the growing amount of national resources devoted to one single category of expenses. This generates another paradox: a growing share of compensation devoted to health insurance, but a declining share of the working population covered by employer-provided health insurance (and decreased generosity of employer-provided plans). Between 1979 and 1993, the percentage of workers covered by employer-provided health insurance dropped from 63 percent to 56 percent. The share for whom employers paid the full premium, meanwhile, tumbled from 28 percent to 17 percent (Houseman 1995, Table 9).
This reduction in fringe benefits carried over to other perks as well. Pension coverage declined by a similar amount, and pensions shifted dramatically from defined-benefit to defined-contribution systems, eliminating employer guarantees of a fixed level of pension benefits. The average number of days off with pay per year also slid, from 20 in 1977 to 16 in 1989 (Mishel and Bernstein 1994, Tables 3.15, 3.16).
In comparative perspective, the stagnation of U.S. wages and other compensation has left U.S. workers behind those in other countries. Comparing wages across countries is a notoriously slippery affair, given the vicissitudes of exchange rates. However, using a purchasing power parity standard for currency conversion (converting currencies based on the prices paid for a standard market basket of goods), U.S. hourly compensation in 1992 lagged behind compensation in Germany, Belgium, and the Netherlands; U.S. workers fell dead even with Italian workers (Freeman 1994, Table 1.2).
Due process
Due process refers to protection from arbitrary disciplinary action--particularly firing. In principle, capitalist labor relations dispense with the mutual obligations that characterize earlier systems, such as slavery or feudalism. In practice, however, workers, capitalists, and states have crafted a wide variety of institutions that invest workers with some degree of property rights in employment. Such institutions help distinguish jobs from mere series of work contracts. They often, though not always, incorporate implicit or explicit rules of due process.
Is due process an important element of job quality? Although it is not part of the index compiled by Jencks and company (except as implied in "risk of job loss"), the amount of energy devoted by unions to bargaining for and using grievance procedures would suggest that workers value it highly. Nonetheless, the United States has no universal system of due process at the workplace. Early laws restricting firing were overturned by court decisions in the 19th century, like many other limitations on corporate action. Union coverage, which peaked at one-third of the workforce in the 1950s, provides an alternate source of protection. Union density has declined sharply, dwindling to 17 percent in 1995, so union-enforced guarantees of due process have become increasingly scarce. From the 1970s onward, there has been a growth of state-level case law barring "wrongful discharge" by employers. The definition of wrongful discharge, initially limited to firing somebody for refusing to break the law, has widened over time to include a wide range of terminations in some states. While this might appear to take the place of shrinking union protection, however, it so far has the character of a lottery--yielding a few large settlements, but no consistent protection (Beck 1996). On the whole, then, due process has become less available in the United States.
Hours flexibility
There are no consistent data series tracking schedule flexibility per se. But the information that we do have on work schedules suggests that people are primarily flexing to meet the demands of business--not the other way around. Overall, the workforce has undergone a stretch-out. Adults are working more hours; in particular, families are contributing more labor force hours, due to increased paid work by women (Schor 1991). Multiple jobholding has increased (Mishel and Bernstein 1994, Table 4.18).
As for the growth of "flexible" forms of employment, this marks a decline rather than a rise in job quality. Part-time employment has gradually expanded. During the 1950s and 1960s, this growth trend was driven by the labor market entry of mothers and young adults seeking schedule flexibility, but since 1970 the trend has been fueled by growing involuntary part-time employment (Tilly 1991, 1996). Temporary employment has exploded, but surveys show that most temporary workers would prefer permanent jobs (Carré, duRivage, and Tilly 1995). There has been movement toward family-friendly flexibility, but on the whole that movement has been regrettably small. For example, the 1993 Family and Medical Leave Act only covers about half of the workforce (those in businesses employing 50 or more), and only two to four percent of workers eligible for time off have actually taken leaves (Burkins 1996).
Permanence
As AT&T geared up to lay off an estimated 40,000 workers in early 1996, Vice President for Human Resources James Meadows told the New York Times, "People need to look at themselves as self-employed, as vendors who come to this company to sell their skills." He added, "In AT&T, we have to promote the whole concept of the work force being contingent, though most of the contingent workers are inside of our walls." Instead of "jobs," people increasingly have "projects" or "fields of work," he remarked, leading to a society that is increasingly "jobless but not workless" (Andrews 1996, D10). In the terms laid out at the beginning of this paper, Meadows's statement holds that employment has devolved from jobs toward contracts--and in the limit, is tending toward individual transactions. Large scale surveys reveal a similar shift in attitudes and expectations: workers and managers alike rate employees' commitment to their current employer, and employers' commitment to their current workers, far lower than in earlier decades (Cappelli 1995).
There are at least two relevant questions to ask about the growing impermanence of jobs in the United States. First, is it really happening on a large scale? And second, is it a bad thing?
Are jobs becoming less permanent? Yes and no. Jobs are becoming less permanent for men, particularly older men, and more permanent for women (Farber 1995, Rose 1995, 1996). The percentage of workers aged 55-64 who have been in a job for 10 years or more dropped among men from 60 percent in 1973 to 57 percent in 1993, whereas among women it rose from 45 percent to 49 percent. In particular, job duration fell for the least-educated men, and rose for more educated women. When all of these changes are combined, the net effect is no detectible trend (Farber 1995, though some measures do show an overall decrease in tenure; see Swinnerton and Wial 1995). However, this netting out does not necessarily imply that the changes are benign. Arguably, women's growing tenure reflects a shift in labor supply--women are more likely to choose to stay at jobs rather than quitting. But men's declining tenure presumably primarily reflects a shift in labor demand--meaning that employers are more likely to lay off or fire workers or shut down. For the purposes of assessing the opportunities available to workers, the shift in labor demand is the decisive element.
Evidence from the Census Bureau's Displaced Worker Survey (DWS) also suggests reduced opportunity for long-duration jobs (Farber 1996). The DWS focuses on an extreme set of events: permanent layoffs. Displacement rates in 1991-93, nominally years of recovery from a mild recession, were higher than during the deep recession years of 1981-83. Middle-aged men took the biggest hit. Displacement rates also shifted by occupation, rising dramatically for managers, professionals, and clerical workers but dropping for blue collar workers--in line with popular perceptions of a wave of white collar "downsizing" (New York Times 1996). In turn, displacement rates for the 1980-92 period as a whole exceeded job loss rates during 1968-79, according to research based on the Panel Study of Income Dynamics (Boisjoly, Duncan, and Smeeding 1994). Between these two periods, the percentage of people laid off increased by one-third, and the percentage fired doubled.
Is the shortening of job durations a bad thing? As noted, earlier in this paper, some in the business press have argued that frequent job changes facilitate ongoing learning and advancement, or have argued that rather than viewing shorter tenure as a setback, it should simply be seen as a change in the patterns and rules of job-holding. Journalists have introduced us to beneficiaries of mobility from one short-term job to another, such as 25-year-old temporary worker Jayson Elliot, who comments, "I don't want a job. I would never take one" (Flynn 1996). Providing some scholarly support for a benign view is the flexible specialization literature launched by Piore and Sabel (1984). Flexible specialization theorists argue that smaller firms and more volatile employment herald a return to craft forms of organization, marked by attachment to a trade, rather than a firm, with possibilities of advancement within that trade.
However, an instructive counterpoint to high-tech temp Elliot is provided by the words of temporary manual labor pool workers in the Carolinas. The Carolina Alliance for Fair Employment held a workshop with such temporary workers in 1994, and asked each participant to supply four words to describe how he/she felt about his/her work life (Gardner and McAllister 1995). Though the list yielded a few positive terms (qualified, hopeful, capable, competent), the bulk were negative: discouraged (five times), unimportant (twice), sad, bad, unpredictable, abused, rough, angry, disappointed, disgusted, tired of looking, expendable, on the outside, insecure, used, underpaid, aggravated, no future, pressured, threatened, unhappy, out of place, depressed, could be better, sucks, demanding, hate, stinks, poor, unfair, tired, and overworked!
While temporary work marks one extreme in impermanence, Jencks et al. found that in general, a 10 percent increase in the expected risk of job loss in the next two years reduces the job's rating as much as a 10 percent pay cut. And though the earnings penalty associated with job changes was lower in the 1980s than in the 1970s, it remained a penalty. Even among job-changes who stayed within the same occupation, men who changed employers at most once during the 1980s earned 11 percent more per year than those who changed two or three times; the corresponding earnings premium among women was 32 percent (Rose 1995). The preponderance of the evidence indicates that most workers experience shorter-term employment as a contraction of employment opportunity.
Mobility
Closely related to the issue of permanence is the question of mobility over time. Good jobs presumably offer upward mobility. The fate of average wages, described above, does not necessarily tell us about the earnings trajectories that individuals follow over time. But in fact, the story is quite similar. Economy-wide, downward mobility has become markedly more common. Tracing the trajectories of individual prime-age adults, Rose (1994) found that about one-fifth experienced declines of five percent or more in real earnings over the decade of the 1970s; that proportion rose to one-third during the 1980s. As in some of the other indicators, men and women criss-crossed: men's likelihood of losing annual earnings increased, whereas women became less likely to lose. However, in terms of hourly wages (factoring out the effect of changes in weeks and hours worked, which enter into annual earnings), both groups became more likely to experience declines in the later decade.
What heightened the probability of downward mobility? Rose (1995) accounts for half of men's increase in earnings drops by the increased frequency of job changes. But data about other firm-level changes suggest a more complex picture. While the frequency of job changes increased, the benefits of job stability decreased at the same time. The payoff to accumulating seniority with a single employer, long a standard feature of compensation (Abraham and Medoff 1980), diminished sharply during the 1980s (Chauvin 1994, Marcotte 1994). Employers also significantly decreased the amount of formal training they provided in order to qualify employees for jobs (Constantine and Neumark 1994). And new forms of work organization have removed layers of management and folded unskilled blue collar jobs into multi-functional teams, taking out rungs in traditional job ladders (Cappelli 1993, Cappelli and O'Shaughnessy 1995). In short, the possibilities of upward mobility with a particular employer contracted, but the opportunities for ascent via movement from job to job have not offset this contraction.
More broadly, the evidence about changes in job duration and mobility allows us to assess the notion that there is a new career model founded on inter-employer movement. Clearly, the old, internal labor market model is dissolving, especially for men. But while job-hopping surely offers new opportunities to some, on the average sustained attachment to a single employer still offers the greatest payoff to men and women alike. The move to a new mobility model may be irreversible, but at least for the time being it represents a setback in job quality.
Control over the work process
Workers value control over the work process highly. Moving from frequent supervision to no supervision, or being able to decide one's own hours, each are worth as much as a doubling of earnings in Jencks et al.'s job quality index. Of course, control has different dimensions. We can distinguish between autonomous control--the ability to decide on one's own work without outside intervention--and communicative control--the ability to contribute to decisions about work in communication and consultation with others, whether co-workers or managers. The findings of Jencks and colleagues suggest that workers value autonomous control particularly highly. In fact, while managers and academics often view heightened communicative control for workers as a benefit, reflection about one's own attitude toward meetings may suggest that this benefit is oversold.
Overall shifts in control over the work process are tricky to track over time. But perhaps the most compelling claim about recent workplace changes is that they have empowered workers, overturning Taylorism and increasing both types of control for workers. How valid is this claim?
As Cappelli (1995) points out, comparing the results of similar surveys over the last 10 years suggests that work organization is changing quite rapidly in the direction of what is often called "high-performance work organization." In 1987, 28 percent of Fortune 1000 firms had self-managed teams. Three years later, 47 percent had such teams (Lawler, Mohrman, and Ledford 1992). In Osterman's 1992 survey of 694 establishments of all sizes, he found that 54.5 percent of sites used teams, and at 40.5 percent half or more of the core workforce was involved in the teams (Osterman 1994). Somewhat smaller percentages use job rotation, total quality management, and quality circles.
The question is what these survey results mean. For one thing, talk is cheap, and fads and jargon frequently sweep through the management world without enduring effect. For example, Eccles, Nohria, and Berkley (1992) point out that under the influence of successive management fads, organizational forms have repeatedly cycled back and forth between centralization and decentralization (Shapiro 1996 makes a similar point in a more popular treamtent). But even if the new changes in work organization are real and durable, the question remains to what extent these changes translate into actual worker empowerment. "In the name of trendy theories," Appelbaum and Batt write in a book that reviews survey data and case study evidence, "...many companies are trying to motivate employees while downsizing their workforces and driving down wages and benefits. Fortunately," they add, "this is not the whole story" (Appelbaum and Batt 1994, p.12). This aptly summarizes the state of our knowledge. We know from case studies that some companies are actually heightening worker control over the work process, and that many companies claiming to embrace high-performance principles have not, but cannot yet allocate the firms reporting "transformation" in large-scale surveys between these two states. There is some positive evidence, however: in Osterman's survey, businesses reporting that at least one high-performance practice involved at least half of their workforce were investing more in training, using fewer contingent workers, and assigned a higher ranking to the goal of boosting employee commitment than did other businesses (Osterman 1994, Table 6).
Summing up the seven components
Overall, jobs have unambiguously gotten worse. Wages have fallen, and fringe benefits and due process have become less widely available. Small advances in family-friendly schedule flexibility have been overwhelmed by unwelcome schedule constraints imposed by employers. More frequent job changes and a shift from intra-firm to interfirm mobility represent new opportunities for some, but translate into less favorable wage trajectories for the average worker.
The spread of high-performance work practices, finally, may hold the seeds of long-term improvements in job quality, but has not yet demonstrated that potential. Indeed, it is not clear these seeds can take root as long as other trends in job quality continue to undermine worker security and commitment.
Why, so what, and what to do about it
Three broad areas of economic change help to explain these trends in job quality. The first is increased sharpness and fluidity of competition. Globalization represents one aspect of this heightened competitiveness, but not the only aspect--after all, the total of imports and exports still equaled only one-fifth of U.S. output in 1994. Deregulation, accelerated technological change, and the increased impact of shareholder impatience through actual or threatened buyouts all contributed to this rise in competitiveness as well, dislodging formerly comfortable oligopolies and opening new industries to competition. The second major change is sped-up technological change itself. In addition to creating new openings for competition, technological change has spurred worker displacement and job redefinition.
Like the United States, the rest of the industrialized world has experienced increased global competitiveness (and to a lesser extent other escalations in competitive pressure) and speedier technological change. But despite significant stress on their industrial relations systems, no other country has experienced the kind of collapse in job quality and surge in inequality that the United States has undergone. Explaining this difference is the third factor: U.S. businesses have for the most part responded to new competitive pressures by cutting costs rather than enhancing quality: they have adopted the old competition rather than the new competition, in Michael Best's (1990) terms. This translates into a concerted effort to keep wages low and minimize long-term commitments to the workforce. Another corollary of this strategy is slow productivity growth, resulting from sluggish investment in both physical and human capital. In fact, U.S. profit rates have reached their highest level in decades--not because capital's share of income has increased, but primarily because the new investment that adds to the denominator of the profit rate has slowed to a trickle (Baker 1995). Businesses and their political supporters have also extended this logic to government, seeking to lighten their tax burden and dismantling many of the provisions that have limited and guided market interactions. Another major contributor to the 1990s' record high profit rates is corporate income tax rates that have dropped by about one-quarter since the early 1970s (Baker 1995).
Some observers, such as Nelson (1995), pessimistically hold that capitalists have simply discovered new, better ways to exploit workers and control the political process--that these developments mark not a misstep but a new stage in capitalism. But again, comparison with other countries suggests that within the framework of capitalism, there certainly are other choices that arguably offer the possibility of more equitably distributed prosperity.
In comparing the United States with other countries that have held the line on job quality, it is important to note that although the United States has stumbled in the quality of jobs provided, it has excelled in the quantity. U.S. job growth over the 1980s far exceeded that of Europe's larger economies, and bested Japan even before Japan's recent recession (Freeman 1994, Houseman 1995). As Japan's and Germany's economies have encountered difficulties, proposals have surfaced for reducing the level of worker protections that distinguish these economies from the United States (The Economist, 1996). But the U.S. employment advantage is typically overstated. This is true in part because of differences in the way the United States and its counterparts measure unemployment, and in part because America has disproportionately high numbers of "hidden" unemployed who are not counted in anybody's unemployment statistics. For instance, the U.S. imprisons people at about ten times Europe's rate, and the American male prison population of 1.3 million in 1993 equaled two percent of the male labor force (Baxandall 1996)!
While the tradeoff between wage levels/worker protection and employment growth is often overstated, it appears to be real nonetheless. But this does not mean that a low-quality, high-quantity job path is the right choice, nor that it is impossible to expand the menu of choices. Greater numbers of lousy jobs and continued sluggish productivity growth will spell rising inequality and growing misery at the bottom of the U.S. income distribution--certainly not a model to emulate.
Furthermore, the process of continuing down our current path toward lousy jobs makes alternative choices progressively more difficult. On the economic level, reduced investments in in-house training, worker loyalty, and commitment create long-term deficits in the workforce. On the political level, the ongoing workplace experience of insecurity and widening disparities fuels division and mean-spirited approaches to issues such as affirmative action or the social safety net.
To move away from our current path and back toward good jobs, seven types of changes are particularly critical:
1) Increased investment in training as a nation. The United States boasts one of the best higher education systems in the world. But the U.S. education and training system stacks up far less well for the 75 percent of the workforce with less than a four-year college degree, and worst of all for those who do not finish high school. The education and training system must be rebuilt from the bottom up. High school students in non-college tracks need a curriculum that is richer and more linked to actual jobs -- possibly adapting West European apprenticeship programs. The "second-chance" system for those who drop out of high school or who require retraining needs to be expanded and retooled. Government inducements for firms to train workers are also essential. And we need to broaden access to and affordability of higher education.
2) Promotion of true high-performance work organization. Expanded support for training is one important part of this promotion. In addition, government at all levels can provide important technical assistance through forms such as industrial extension services. Such assistance should be oriented to teaching more democratic forms of management, helping build an orientation toward quality, and facilitating the development of inter-firm networks of cooperation and communication toward these ends. Government can also help to organize the process of setting quality standards. Finally, and most broadly, we need policies to expand firms' commitments to all of their stakeholders, not just their shareholders--for example, financial taxes and regulations that reward long-term investment, and encouragement for representation of all stakeholders within the firm's governance structure (Appelbaum and Batt 1994, pp.166-167).
3) Expanded work/family flexibility. In this regard, the United State could learn from Europe (Kamerman and Kahn 1989). Most European countries provide universal, free child care (at least for ages 3-5), plus cash family allowances based on the number of children. European women (and to a lesser extent men) have the right to a childbirth leave of three months to three years (depending on the country); government and employer are jointly responsible for paying for part of this leave--typically three to six months (Carlsen and Larsen 1994, Figure 14a (p.174)). Federal and state governments could also do more to reward businesses that adopt family-friendly policies.
4) Revitalization of the labor movement, which is the agent most invested in pressing a good job agenda. Unions raise wages most for the lowest-paid, contributing to more equal wages (Freeman and Medoff 1994). By demanding greater compensation and due process protections, unions help to push businesses toward a high-wage, high-skill, high-productivity "high road" strategy, rather than a wage- and cost-cutting low road. But union coverage has shrunk from one-third of the workforce in the 1950s to less than one-sixth today. Businesses have discovered they can run hardball union-busting campaigns, misleading, threatening, and even firing workers -- and pay only minimal penalties, usually years later after the damage is done. To level this playing field, we need stronger laws protecting workers' right to unionize without fear of employer retaliation, and to strike without fear of being immediately -- and permanently -- replaced.
5) Strengthening of other insitutions designed to protect those at a disadvantage in the labor market, such as the minimum wage and pay equity. Between 1979 and 1994, the inflation- adjusted value of the minimum wage tumbled by 27 percent. Setting the minimum wage at half the average wage in 1995 would have put it at $5.73 per hour, well above the $5.15 currently proposed by the Clinton administration. Some point out that even at this higher level a minimum wage is still not a living wage; one definition of a living wage is one that will allow a full-time, year-round worker to bring a family of four up to their poverty threshold -- $7.49 per hour in 1995.
6) A stronger, broader safety net of socially provided benefits. Federal and state legislators have shrunk the social safety net over the past twenty years; instead, it should be expanded. Universal health care would be the most important element of such an expanded safety net. With health coverage guaranteed, it would be "taken out of competition": businesses could not compete by chipping away at the level or extent of their workers' health coverage as a way to cut costs. Given workers' increased mobility, portability of pensions and other cumulative benefits must form part of the safety net as well. And retraining opportunities, plus reliable, adequate support for those unable to do paid work, are also essential. All of these provisions would complement the benefits provided directly by employers, making bad jobs better and increasing security for all workers.
7) Reduced work hours, and a loosened connection between income and privately productive work. This is the most radical proposal of all. But given the current rate of unemployment, high by historical standards, and the reality of some sort of tradeoff between job quality and quantity, a strategy for good jobs must contemplate ways of sharing the paid work and income that exist. Currently, job creation is driven primarily by the engine of private profit. We get not enough jobs, and too many lousy jobs. But simply stoking that engine in order to try to create more jobs--particularly if we expand the framework to the world as a whole--threatens environmental sustainability. Instead, we need to partially unhitch work and income from profit (Lerner 1994; Rifkin 1995). A shorter work week, coupled with more social provision of people's basic needs, could lead to more jobs for those who need them, along with more free time for those who are overworked. German sociologist Claus Offe makes an even stronger suggestion: given that so much of our self-esteem stems from paid work, adults who make the sacrifice of not doing paid work should be rewarded. In his words:
Since adult citizens do not have a "right to work" but instead a right to compete for employment, then all those who voluntarily withdraw from the competition are doing a favor to all those who remain, whose chances are correspondingly improved. Those who withdraw deserve compensation for the duration of their non-participation in the labor market. (Offe 1995, p.81).
Offe goes on to suggest that the compensation of those abstaining from paid work should encourage them to do other socially useful labor in their family or community. If we take the challenge of generating good jobs seriously, we must contemplate such utopian proposals.
Returning to reality, the current direction of public policy in the United States is diametrically opposed to these good-job strategies. If my analysis is correct, this will simply sharpen the problems of job quality. The evidence tells us plainly that the ugly trend toward worse jobs in the United States is real, and far from being self-correcting, it is self-reinforcing. To arrest and reverse this trend is the key challenge facing the U.S. economy at the millennium.
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Table 1
(Wages in 1993 dollars)
1979 1989 1993
MEN
The Distribution of U.S. Hourly Wages, 1979-1993
Levels
10th percentile $6.79 $5.80 $5.21
50th percentile $13.46 $12.08 $11.39
90th percentile $23.81 $23.92 $23.93
Ratio of 90th to 10th 3.51 4.12 4.59
As % of 1979 level
10th percentile 100% 85% 77%
50th percentile 100 90 85
90th percentile 100 100 101
Ratio of 90th to 10th 100 118 131
WOMEN
Levels
10th percentile $5.69 $4.69 $4.78
50th percentile $8.31 $8.72 $8.72
90th percentile $15.25 $17.40 $18.19
Ratio of 90th to 10th 2.68 3.71 3.81
As % of 1979 level
10th percentile 100% 82% 84%
50th percentile 100 105 105
90th percentile 100 114 119
Ratio of 90th to 10th 100 138 142
Ratio of women's median
to men's median 0.62 0.72 0.77
Note: All figures exclude agricultural and self-employed workers.
Source: Houseman 1995, Table 6, and author's computations
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