Economy

CHART: The U.S. Economy Has Lost One-Third Of Its Capacity To Generate Good Jobs

A new report by Janelle Jones and John Schmitt for the Center for Economic and Policy Research shows that the percentage of Americans with a high school education and a good job has declined precipitously in recent decades, and even the percentage of college graduates with a good job has declined slightly. A good job was defined as one that pays at least $37,000 a year, and provides both health coverage and a retirement plan. All in all, the economy has lost about a third of its capacity to create such jobs:

One of the most common explanations for America’s rising inequality — especially amongst conservatives and centrists — is technological advancement, which dramatically shifted America’s economy in favor of higher skills and higher education. But as the report shows, the theory doesn’t square with what’s actually going on.

[T]he story the figure above tells is one where something is consistently pulling the bottom out of the labor market, not one where something is pulling the top away — at least not the top as defined by broad education categories… [T]he real culprit is the systematic decline in the bargaining power of workers — reflected in a drop in the inflation-adjusted value of the minimum wage, a collapse in the unionization rate in the private-sector, the deregulation of previously well-paying industries, the privatization of state and local government jobs, a series of business-biased trade deals, a dysfunctional immigration system, poor enforcement of already weak labor standards, and high unemployment.

A deeper dig into the report also reveals that the decrease in good jobs has been driven by precipitous declines in the number of workers receiving health coverage or retirement benefits through their employer, which suggests that current efforts to reduce how much the government provides for those safety nets will exacerbate such problems further.