Bad Jobs On The Rise

Almost one-fourth of U.S. workers are in a bad job, according to a new report from the Center for Economic and Policy Research (CEPR). Despite substantial increases in the education, age, and quantity and quality of technology over the last three decades, the share of workers with a “bad job” has risen since 1979, the CEPR researchers concluded.

The report, “Bad Jobs on the Rise,” defines a bad job as one that pays less than $37,000 per year, does not have employer-provided health insurance, and lacks some kind of retirement plan. The $37,000 figure (which translates to about $18.50 per hour, full-time) is equal to the inflation-adjusted earnings of the typical male worker in 1979, the first year of data analyzed in the report. By this definition, in 2010, 24 percent of the workforce had a “bad job,” up from 18 percent in 1979. The new report complements earlier CEPR research documenting the decline in “good jobs” over this same period.

Compared to the end of the 1970s, the typical worker today is almost twice as likely to have a four-year college degree, is about seven years older, works with about 50 percent more physical capital, and uses much more advanced technology. Despite this, the share of bad jobs has grown.

“The increase in the share of bad jobs has little to do with the Great Recession,” said John Schmitt, a senior economist at CEPR and one of the report’s co-authors “Almost all of the increase we document had already occurred by 2007, before the downturn.”

The main driver of the rise in bad jobs, the report argues, was the systematic decline in workers’ bargaining power since the end of the 1970s. The reports’ authors point to the fall in the inflation-adjusted value of the minimum wage, the decline in union representation, trade deals, and high unemployment as some of the key factors reducing the bargaining power of workers relative to their employers.