For decades, the majority of American jobs have been growing worse. The jobs of the three decades following World War II—most of them, anyway—came with sufficient pay, decent insurance, and defined benefit pensions, which combined to create, for the first time in human history, a middle-class majority.
Harold Meyerson is editor at large of the American Prospect and an op-ed columnist for the Washington Post.
That America has now vanished into the mists of memory. A 2012 study by economists John Schmitt and Janelle Jones of the Center for Economic Policy Research concluded that 22 percent of all jobs in 2007 (the year before the Great Recession began) qualified as bad—and for a job to be bad, it had to come with annual pay beneath $37,000, no health insurance, and no pensions (including 401ks) of any kind. In 1979, just 18 percent of jobs, adjusted for the lower cost of living then, were, by that standard, bad. The share of bad jobs, Schmitt and Jones wrote, had risen in those 28 years at every level of educational attainment. And the share had increased despite the fact that the workers of 2007 were far better educated than those of 1979.
Since that 2007 study, jobs have only grown worse: Pay has dropped precipitously in the manufacturing sector, the share of middle-income jobs has declined while that of low-income jobs (in such industries as restaurants and retail) has ballooned, and millions of Americans have been compelled to work not at jobs but at gigs—part-time employment in which employers call their workers “independent contractors” even while dictating the terms of the job, yet denying any responsibility for the workers’ expenses. More than any nation, the United States has long provided benefits not through the state but through contractual relations between employers and employees. Once workers are no longer employees, the likelihood is that they’ll have no benefits at all. Indeed, that’s increasingly the current reality.
Worse still, when 21st-century American businesses do well, their workers are unable to claim their due. The share of the nation’s income going to wages is at the lowest level since the government started measuring such things in 1929, while the share going to profits is at record highs. According to University of California–Berkeley economist Emmanuel Saez, all the income growth between 2009 and 2012 went to the wealthiest one percent of Americans, whose income came disproportionately from investments rather than wages.
The now familiar litany of reasons for the American job’s decline is a long one. Globalization and the communications revolution have made at least 30 million American jobs offshorable, economist Alan Blinder has calculated, which is a potent factor in suppressing their wage levels. The near disappearance of unions from the private-sector economy has all but eliminated collective bargaining. Indeed, it’s the shakedown artists (who prefer to be called “activist investors”) who now bargain with corporate management for a greater share of corporate revenues, while the workers who actually make or sell their employer’s product have no way even to get to the bargaining table.
The 50-year shift of American businesses to the Sun Belt, most particularly to the South, has re-centered much of the U.S. economy in a low-wage region where unions are anathema. The fact that jobs have been disproportionately created in the South has not been a positive development for American workers. Texas’ elected officials boast of the state’s record in creating the most jobs since the Great Recession, but a recent study by University of California economists reveals that, of all 50 states, Texas has the highest share of residents eligible for federal poverty programs (Medicaid, food stamps, children’s health) who are also employed (67 percent). In recent years, a number of world-class European and Asian manufacturers (Mercedes, Volvo, BMW, Airbus, Nissan, and more) have opened or announced they will open factories in the South, but they’re coming because Chinese wages have risen so much that, given the higher productivity levels in the U.S., it’s actually cheaper to manufacture in the low-wage South than in China.
And in recent decades, the South has come North. The growth of Walmart from a chain in the Ozarks to the nation’s largest private-sector employer, with 1.4 million U.S. employees, has depressed retail wages across the land. (Walmart tells its managers to spend between 5.5 percent and eight percent of store revenues on wages; the industry norm is eight percent to 12 percent—or was, until Walmart came to town.)
Is there any reason to think the forces that have degraded the American job will abate? Globalization will surely make even more jobs potentially offshorable, and the tech revolution’s ability to create gigs is only just beginning. Before we despair, however, we need to remember how we created the good jobs of the mid-20th century, and, in general, how jobs that provide security and decent incomes are created at all.
The key has always been worker power. In a capitalist system—and that’s the only system we have—workers have only had good jobs when they’ve had the power to demand them from employers and investors. In the placid 1950s, the nation experienced on average 300 major strikes every year: that’s where the great American middle class of the mid-20th century came from.
How workers can re-create that power in an economy where forming a union routinely leads to worker firings, and where more and more workers aren’t even considered employees, will remain a huge challenge. The “Fight for 15” campaign that has succeeded in raising the minimum wage in a number of cities and states suggests one answer: winning better pay and improvements on the job (such as paid sick days) legislatively rather than through traditional collective bargaining. But if the American job is not to continue its downward spiral, American workers will need to wage even more potent and innovative campaigns, promoting a range of new public policies that:
- Alter the balance of power within corporations by mandating, as Germany does, that they divide their corporate boards evenly between worker and management representatives.
- Raise taxes on corporations where top executives make obscenely more than their median workers and lower taxes on corporations where the division is more equitable.
- Stop the manipulation of stock (through, for instance, share buybacks) that rewards investors and top managers at workers’ expense.
- Make it safe for workers to form unions again.
- Crack down on employers who mislabel their workers as contractors to evade providing them with the pay and benefits they deserve.
- Require those who engage the services of independent contractors to contribute to a portable benefit pool the contractor can access in the same way an employee can.
- Commit the government to policies of full employment so that the job loss inherent in the continuing rise of globalization and technological progress can be offset by jobs, most of them funded by public treasuries, in areas (infrastructure construction, child and elder care) where demand is woefully unmet.
In sum, the only thing that will arrest the decline of the American job is workers finding the ability to demand their due and thus mitigate the economic disaster and moral rot that is 21st-century American capitalism.
For the Future of Work, a special project from the Center for Advanced Study in the Behavioral Sciences at Stanford University, business and labor leaders, social scientists, technology visionaries, activists, and journalists weigh in on the most consequential changes in the workplace, and what anxieties and possibilities they might produce.