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New look at U.S. employment outlook

– The economy may be on the mend, but the strongest job growth is in positions paying the least, and long-stagnant wages are slipping, says a report released today (Thursday, Oct. 14) by a researcher at the University of California, Berkeley.

Arindrajit Dube, an economist with the Institute of Industrial Relations, pored through recent U.S. household survey data to examine changes in job numbers and wage distribution in 440 employment categories in 2001, during the 2002- 2003 recovery period, and in the first eight months of 2004. In "Are Jobs Getting Worse?" Dube analyzes changes in the average wage, the distribution of wages, and the types of jobs that are increasing or decreasing.

"What's growing versus shrinking in terms of jobs is important," said Dube. "Combined with a weak labor market, wages have been fairly stagnant during this recovery, and this year, they've actually fallen."

He found that the growth of jobs paying at the bottom third of the market outpaced those paying at the middle by nearly 2 to 1, while there was a reduction in the number of jobs paying at the top third.

Another report from the Heritage Foundation issued earlier this month concluded that average earnings for non-executives were 2 percent higher than at the peak of the dot-com boom, but Dube said that happened mostly in 2001, and the current trend is a slowdown and reversal of that.

"The weak labor market and the job quality gap have meant that the wages of workers have taken a hit," according to Dube's report. "After stagnating for two years since the end of the recession, the average wage actually declined in 2004 once inflation was accounted for. The wage decline was the greatest for the bottom half of the workforce - so the disparity in wages rose."

Dube noted that over the past four years, job categories that grew paid an average of $1.66 an hour less than categories where jobs were disappearing.

This year, he found that jobs in expanding employment categories pay an average of $1.90 an hour less than jobs in categories where numbers are shrinking.

Shrinking jobs were concentrated around those paying $13 an hour; growing jobs paid around $9 an hour.

Dube said that in the past year there appears to be job growth of almost 2 percent in the middle salary range in professions such as nursing, while wages for workers in the top-third pay range have fallen about 1.4 percent. All this has occurred while growth in jobs in the bottom third pay range, such as those in restaurants and hotels, surged by 3.7 percent.

The study makes no policy recommendations. "Because the job quality issue is being talked about so much, I'm trying to get the basic facts out there," said Dube.

While other job and wage studies have explored similar issues to those in his study, Dube said his work differs in its use of the most current employment figures, more industry and occupation categories, and an examination of the entire range of growing and disappearing jobs - not just average differences between the two.

Dube's report can be found online at http://www.iir.berkeley.edu/research/jobquality.pdf.