THE BLOG

Jobs or Quality Jobs?

03/04/2015 10:03 am ET | Updated May 04, 2015
ASSOCIATED PRESS

If the economic predictions offered by MarketWatch in January come to fruition, 2015 should be a good year--economically speaking. Supported by an unemployment rate that has plunged from 5.7 percent in January from 8.6 percent three years ago, MarketWatch predicted the following upbeat news:

  • 3-percent growth for the first time since 2005

  • Wages will escalate after years of stagnation
  • Continued decline in unemployment
  • Moreover, the U.S. economy created 257,000 jobs in January. While these are all positive signs, shouldn't the Department of Labor be more nuanced in their job creation calculations?

    Wouldn't a better indicator be to delineate between jobs and quality jobs? But this raises the question of what constitutes a quality job.

    It may be easier to define "quality job" through the lens of employment that obviously wouldn't qualify. Or as Justice Potter Stewart opined about pornography, "I know it when I see it."

    The reflexive response might be to equate quality jobs with wages. Wages are certainly part of the equation but not the sum total.

    Record levels of underemployment over the past decade have placed a squeeze on wages. One need not be John Maynard Keynes to understand that there is a widening gap in recent years between employment and job quality.

    America's largest employer, Walmart, recently gave its lowest-paid hourly employees a raise. It will pay a minimum of $9 an hour. That is $1.75 more than the federal minimum wage of $7.25, which has been unchanged for almost six years. Next February Walmart will increase the hourly scale to $10.

    Though not a reason to break open champagne, it is a positive step. Walmart's decision will most likely require many of it cohorts that also pay low wages to follow its plodding lead.

    The City of Oakland is to be commended for being the latest in a growing number of Bay Area cities that have increased their minimum wage. Oakland raised it from the statewide minimum of $9 an hour to $12.25, constituting a 36-percent increase.

    But the tragic reality is that since 1969, productivity has greatly outpaced wages.

    Economist Dean Baker argues that productivity has doubled since 1969, but the minimum wage has not kept pace. Baker concludes that, had the minimum wage kept pace with productivity, it would currently stand at $16.50 per hour.

    But Baker's minimum wage projection of $16.50 per hour is politically unachievable. Even if it were an attainable goal, would it constitute a quality job?

    Though a quality job index is harder to quantify because of the difficultly establishing common criteria, that shouldn't be a deterrent from seeking to derive a collective definition. If every elected official from president to dogcatcher is willing to tout positive job growth, shouldn't there be an accompanying responsibility to define how many of those are quality jobs?

    A 2009 report entitled "Indicators of Job Quality in the European Union" offers a constructive framework worthy of consideration. One of the report's key suggestions was to divide job quality into two broad areas: employment quality and work quality.

    According to the report, employment quality refers to those aspects of the employment relationship that have a potential impact on the well-being of workers: these are all the aspects related to the employment contract, remuneration and working hours, and career development.

    Work quality refers to how the activity of work itself and the conditions under which it takes place can affect the well-being of workers: autonomy, intensity, social environment, physical environment, etc.

    The laissez-faire approach would be to let the market take care of the problem -- assuming a problem exists. But this is not an issue for the market but one that requires public policy.

    Assuming a quality job index could be established, government could offer incentives to companies in a position to provide quality jobs.

    A quality job in, say, 1970 will most likely not constitute the same in today's economy.
    Can all jobs be classified as quality? It is difficult to say.

    Because the economic landscape has changed, the failure to grapple with the question will serve only to erode the impact of the monthly job creation index, regardless of the number created.