An Economy For Everyone: April Good Jobs Recap

Patrick DugganQuality Jobs

good quality jobs working class

In order to build wealth and create opportunities in and across America’s underserved communities, and reverse the troubling trends we’re seeing in our economy, we no longer find it defensible to focus on job creation alone. It’s clear that job creation does not itself equate to lasting economic change. And so, we must shift our focus to the creation of higher quality jobs — jobs that are good for workers and their families, good for businesses, and good for communities — enabling us to build an economy that works for everyone.

Each month, we bring you the latest roundup of news from the fight for quality jobs for working people.

Pacific Community Ventures and Aspen Institute To Create Quality Jobs At Retail Small Businesses

More Americans work in retail than in manufacturing or mining. Over the last two weeks you’ve probably read a lot about big job losses in the retail sector, from Sears and Macy’s to Kmart and Urban Outfitters. According to Slate these recent job losses are concentrated belong largely to American suburbs. Seventy-one percent of workers in sales and related occupations live in the suburbs, according to the Brookings Institution, about 2 percentage points higher than the average for U.S. workers.

When we think of retail we tend to picture those big-box stores like Walmart or Best Buy, but the reality is most retail jobs are at small and independent businesses. Front-line retail workers also tend to face lower wages, unpredictable schedules, and fewer benefits – but that doesn’t have to be the case.

It’s one thing to offer sympathy to working Americans and pay lip-service to the lack of good jobs being created, or to say businesses need to do better. As part of our vision to make quality job creation the norm, we believe that we must equip small businesses with the practical tools and resources they need to offer higher quality jobs in a way that balances their business needs and bottom lines with better wages and benefits for their employees. We know that small businesses want to provide good employment opportunities for their workers – but they are often uncertain of how to do so in ways that make sense for their business.  We’re committed to enabling them to succeed – and believe a simple, practical quality jobs toolkit will help spur them to action.  

Over the next two years we are working with the Workforce Strategies Initiative at the Aspen Institute to develop, pilot, and publish a quality jobs toolkit focused on retail small businesses. The quality jobs toolkit has the potential to enable meaningful improvements in job quality in an industry that relies on a significant number of frontline workers and operates with limited resources — and once it’s proven out across the retail industry, we can adapt it to restaurants, health services, and on and on.

Read more here >

Empowering workers with living wages, benefits, and reliable schedules isn’t just a long-term goal. We can point to companies that are doing this right now and seeing tremendous business success because of it. Our friends at Conscious Company Media have a great profile and interview with Next Jump, a company that built a $2-billion business based on its revolutionary workplace culture that values self-development above all else. Read more >

Beginning this year, PCV has shifted its mission in order to move our economy to one where quality jobs are the norm—not the exception. CDFIs like ours must build consensus around a common definition of a quality job, undertake practical efforts to foster the creation of quality jobs, and measure results to understand what works.

The Cost of Doing Nothing

The United States is starting to have an economic and political structure more like a developing nation. We have entered a phase of regression, and one of the easiest ways to see it is in our infrastructure: our roads and bridges look more like those in Thailand or Venezuela than the Netherlands or Japan. But it goes far deeper than that, which is why a new study from New Economic Thinking uses a famous model created to understand developing nations to describe how far inequality has progressed in the United States. The model is the work of West Indian economist W. Arthur Lewis, the only person of African descent to win a Nobel Prize in economics. For the first time, this model is applied with systematic precision to the U.S.

The result is profoundly disturbing.

In the Lewis model of a dual economy, much of the low-wage sector has little influence over public policy. Check. The high-income sector will keep wages down in the other sector to provide cheap labor for its businesses. Check. Social control is used to keep the low-wage sector from challenging the policies favored by the high-income sector. Mass incarceration – check. The primary goal of the richest members of the high-income sector is to lower taxes. Check. Social and economic mobility is low. Check.

Part of the reason for this? According to The NationMarket concentration and monopolies. Virtually every major sector in our economy has been whittled down to a few major players. This new reality is the result of deliberate choices by the architects of America’s national economic policy.

Decades ago, antitrust enforcement was ferocious, breaking up companies for reaching a mere 7 percent of market share. Tax rates were far higher on income, capital gains, and corporate profits. These practices prevented corporate behemoths from siphoning off the wealth created by their workers to a few far-flung locals. Instead, that wealth was plowed back into local communities in the form of investment and high wages for workers.

Government subsidies and regulations ensured that railroads, airlines, and shipping companies couldn’t decline to service a more rural area just because it wasn’t profitable. That kept less dense areas of the country plugged into the rest of the economy. Meanwhile, the New Deal and World War II shoved monetary and fiscal policy in a more Keynesian direction, promoting robust public investment by government. That kept the supply of jobs plentiful, wages high, unions strong, and labor markets tight. As The Week shows, all of that went away beginning in 1980, with the general rightward turn in U.S. policymaking. American society became far more unequal, centralized, and extractive.

This market consolidation has wide-reaching negative effects, according to New Republic, beyond the higher prices monopolies can charge due to lack of competition. Quality suffers when consumers have nowhere else to turn. Supply chains become fragile—an outage from Amazon Web Services, the leader in cloud computing, took out half the Internet in February. Economic power begets political power, and democratic institutions suffer. Personal liberty to use talents and skills gets stymied when there’s only one game in town. Barriers to entry have led to a decline in business start-ups and a retrenching of economic dynamism. Inequality grows when a few at the top gather all the rewards in a market.

It’s All About The Wages

We all know that average wages have remained stuck for working Americans since the late 1970’s – but it’s been even harder for people at the very bottom of the wage scale. Over the last month we’ve heard a lot about the minimum wage: Democrats in the U.S. Senate have introduced a bill to make America’s minimum wage a national living wage of $15 an hour, while state legislatures like Iowa’s are working to lock in their minimum wages far below the poverty level.

One group that politicians love to say will be harmed by higher minimum wages is small businesses. But it turns out that small businesses disagree. Some might find it surprising that small-business owners are voluntarily taking action to increase wages. But they’re organizing all over the country, and even lobbying for it. You only need to look at Wage Change’s explosive growth in less than four months of existence to see there is strong support for increasing the minimum wage among small-business owners. Read more >

And it’s not just small business. A new paper looks at the effects of working-class wages at firms of different sizes and what that means for their careers. Consider three workers who fall into the middle of the skill distribution and the wage distribution. Each worker gets put on a different ladder, representing each working for different firms. These employees not only get placed at different rungs on the ladders due to differences in how the firms pay, but also climb up the ladders at different rates.

The first worker, who’s employed by a low-wage firm, has less than a 1 percent chance of getting to the top fifth of his or her firm’s ladder. The second worker, employed at a medium-wage firm, has about a 3 percent chance of getting to the top 20 percent of the rungs. But a worker at a high-wage firm has an almost 12 percent chance of getting near the top of the ladder. The probability of moving up is also better for high-skilled workers at high-wage firms—about 33 percent. This compares to the roughly 5 percent and 14.5 percent chances at low- and medium-wage firms, respectively, for high-skilled workers. Read more on Equitable Growth >

Our Economy Belongs to Us: Quality Jobs, Equity, and Privilege

It is hard for anyone to be against the idea of inclusive prosperity. Of course the bounty produced by economic growth should be broadly shared. But the devil is in the details, and when people advocate for inclusive growth they don’t always have the same things in mind.

There are two types of capital investments businesses can make: those in physical capital, like machinery and software, and those in human capital, like worker training. Economists have long emphasized the need to invest in physical capital. But due to automation and demands from wealthy shareholders to increase profits at the expense of workers, human capital investment is becoming an afterthought at best.

Federal policy over the last few decades has strengthened incentives to invest in physical capital, but not human capital. Third Way details how, at the same time, employer investment in workers has fallen by more than one-third over 20 years. Read more >

Over the last several decades, black workers in particular have been offering more to the economy and the labor market to incredibly disappointing results in pay and unemployment. A new report cited on Alternet and ThinkProgress surveys 120 occupations, finding that without exception Black Americans are working more and earing less – and for black women it’s especially dire. Just four of the 120 occupations pay women slightly higher than men, on average: counselors, food preparers and servers, sewing machine operators, and teacher assistants. By contrast, 107 have a wage gap of at least 5 percent, with one as wide as 44.4 percent.

But there are bright spots! It seems serial entrepreneurship is the way to improving the state of black finance. A fascinating new study shows that becoming a serial entrepreneur has significant benefits over someone opening one single business, referred to as a “novice entrepreneur.” Once again, small business shows how it’s the true engine of prosperity in America. Read more >

Quality Jobs Are Tied To Dignity – and To Your Health

Recent research by economists Anne Case and Angus Deaton documents a dramatic rise in mortality rates among working-class white people in the U.S. The fact that people’s health and emotional well-being are so closely tied to the absence of steady work is striking. Yet what matters here is not just job insecurity; it’s also what we might call the culture of insecurity: the growing conventional wisdom that precarious employment is inevitable. Read more on Harvard Business Review >

The identity of rural communities used to be rooted in work. The signs at the entrances of their towns welcomed visitors to coal country or timber country. Towns named their high school mascots after the work that sustained them, like the Jordan Beetpickers in Utah or the Camas Papermakers in Washington. It used to be that, when someone first arrived at these towns, they knew what people did and that they were proud to do it. According to Real Clear Policy, that’s not so clear anymore.

Many Americans can narrate the decline of the social contract, the collapse of the kinds of jobs their grandfathers held for decades before retiring and getting the gold watch. Survey data reflects this sentiment as well: According to Pew, most Americans are convinced that jobs have become more precarious than they were 20–30 years ago, and predict that it will get worse. Not only that, but in a report on The Atlantic most Americans no longer believe one of our central national myths: that hard work pays off.

And people who feel that way? They’re right. Contrary to common assumptions, substantial shares of the poor are employed. Approximately 45 percent of poor, prime-age (25-54) householders are actively working in rural and urban areas alike.

Where The New Good Jobs Are: Sustainable And Renewable Energy

The U.S. Energy and Employment Outlook 2017, reported in Yes! Magazine, shows that electricity from coal declined 53 percent between 2006 and 2016. Coal is still a major source of energy, but it’s in decline. Coal and natural gas add up to two-thirds of all electricity generation in the U.S. That’s expected to remain the case until at least 2040, when the market share projection declines to a little more than half.

New figures published by the American Wind Energy Association this month show that the US wind energy industry added jobs at more than 9 times faster than the overall US economy in 2016, reaching 102,500 jobs in all, helping to install over 8 gigawatts of new wind power and helping investment reach more than $14 billion. And it’s not just green advocates who see the future in renewables – fossil fuel companies are beginning to invest in wind farms across the country. Read more on Clean Technica>

The Role Of The Social Sector

This past summer, the Ford Foundation made waves with a major announcement. As the headline in the Chronicle of Philanthropy read, “Ford Shifts Grant Making to Focus Entirely on Inequality.” Yet the decision of one of the largest philanthropic institutions in the United States to focus on promoting greater equality also raises an important question: What about the labor movement?

Historically, labor unions have been the primary institutions responsible for advocating for worker rights. In previous eras, they have played a vital role in narrowing the gap between rich and poor. During America’s economic boom in the wake of World War II, good union jobs for working class families birthed the middle class, providing living-wage employment even for those without college degrees. The erosion of middle class economic security since the 1970s has paralleled the decline of unions.

Our friends at the Stanford Social Innovation Review take a good hard look at this dynamic, as well as one important truth that the social space doesn’t like to acknowledge: Culturally, unions are organizations of working people, while foundations are organizations of the affluent, setting the stage for tension and acrimony. Read more >