Job Quality in the Upside Down Economy Eileen Appelbaum, Ph.D. Professor, School of Management and Labor Relations Director, Center for Women and Work Rutgers The State University of New Jersey Presentation for Righting the Upside Down Economy: Creating a Sustainable Economy Center for American Progress Mayflower Hotel, Washington, DC July 1, 2004 Center for Women and Work Rutgers University

Despite Expansionary Macro Policies, Share of Americans with Jobs Declining Source: CEPR analysis of BLS data: Current Population Survey

What Is Happening to Job Quality? Establishment data: 1.35 million net new jobs created May 2003 to May 2004 ◊ 56% were in low-wage service industries  Household data: 1.27 million increase in employment ◊ Part-time employment increased by 674,000 equivalent to 53% of the increase in employment  Real wages are declining  Long-term trend: Lots of poor quality, low- paying jobs

Private Sector Job Growth: May 2003-May 2004 Selected Industries (Establishment Data) Center for Women and Work Rutgers University Source: BLS The Employment Situation: June 2004, Table B-1

Part-Time Job Growth: May 2003-May 2004 (Household Data) Center for Women and Work Rutgers University Source: BLS The Employment Situation: June 2004, Table B-1

Real Average Hourly Earnings Total Private Sector (1982 Dollars) Center for Women and Work Rutgers University Source: U.S. Dept of Labor, BLS, National Employment, Hours & Earnings.

Employment Change by Wage Quintile Jobs Source: BLS, Occupational Employment Statistics. Progressive Policy Institute, May 2004.

Top Ten Occupations with Largest Job Growth, Source: D.E. Hecker, “Occupational Employment Projections to 2012,” Monthly Labor Review, Feb. 2004, Table 4 (Numbers in thousands of jobs) Employment ChangeRank by 2002Most significant source median annualof postsecondary Occupation title NumberPercentearnings (a)education or training Registered nurses2,2842, Associate degree Postsecondary teachers1,5812, Doctoral degree Retail salespersons4,0764, Short on-the-job training Customer service reps.1,8942, Medium on-the-job training Food prep & serving workers1,9902, Short on-the-job training Cashiers, except gaming3,4323, Short on-the-job training Janitors and cleaners except2,2672, Short on-the-job training maids and housekeeping General operations managers2,0492, Bachelor's or higher + work exp. Waiters and waitresses 2,0972, Short on-the-job training Nursing aides, orderlies, and1,3751, Short on-the-job training attendant Note: (a) 1 = $41,820 and over (very high), 2 = $27,500 to $41,780 (high), 3 = $19,710 to $ 27,380 (low), and 4 = below $19,601 (very low). These are quartile rankings. That is, a quarter of wage and salary workers earn $41,820 or more, a quarter earn less than $19,601, and so on. Center for Women and Work Rutgers University

Projected Job Growth by Wage Quintile: 2002 to 2012 Job Growth (%) Source: BLS, Occupational Employment Statistics. Progressive Policy Institute, May 2004.

Why Aren’t These Middle Class Jobs?  Can’t blame foreign competition or outsourcing  No countervailing force to the blind and mistaken pursuit of profit ◊ Unions lack membership density ◊ Government has abdicated responsibility for setting minimum acceptable standards  Low-wage policies not good for companies

Higher Wages = Higher Profits Costco vs. Wal-Mart Costco Wal-Mart’s Sam’s Club Average hourly wage$15.97$11.52* Annual health costs per worker$5,735$3,500 Covered by health plan82%47% Annual retirement costs per worker$1,330$747 Covered by retirement plans91%**64% Employee turnover6% a year21% a year Labor and overhead costs9.8% of sales17% of sales*** Sales per square foot$795$516 Profits per employee$13,647$11,039 Yearly operating income growth**** 10.1%9.8% *Excludes 25% of workforce that is lower paid part-time workers **Those on the job for less than a year are not covered ***For all Wal-Mart ****Over the past 5 years in the U.S. Source: S. Holmes and W. Zellner, “The Costco Way,” BusinessWeek, April 12, 2004, pp Center for Women and Work Rutgers University

What Can Government Do? Help companies be good employers – reestablish standards in labor markets ◊ Raise minimum wage and peg to half the average wage (=$7.75 today) ◊ Guarantee minimum number of paid sick days ◊ California-style Paid Family Medical Leave Bring health care costs under control Innovative training for incumbent workers Support creation of local networks of firms ◊ Provide access to training, resources ◊ Benchmark technology, management, quality ◊ Seek out new niche and export markets