October 18, 2005

75% of American Workers Lack Decent Wages and Benefits

For Immediate Release: October 18, 2005

Contact: Lynn Erskine, 202-293-5380 x115

Washington, DC -- Only 25.2 percent of American workers have a job that pays at least $16 per hour and provides health insurance and a pension, according to a new study by the Center for Economic and Policy Research.

The report, "How Good is the Economy at Creating Good Jobs?" found that between 1979 and 2004 the share of American workers in good jobs remained unchanged at about 25 percent, despite strong economic growth over that period. (The report defines a "good job" as one that offers at least $16 per hour or $32,000 annually, employer-paid health insurance and a pension.) In the last quarter century, the U.S. workforce has become older, more experienced and better educated, but 75 percent of workers are still struggling in jobs that do not provide health insurance, a pension and solid middle-class wages.

"The U.S. economy has failed to convert long-term economic growth into better jobs," said John Schmitt, CEPR economist and author of the report. "Despite huge improvements in the average educational level our workforce, most American workers still don't have a job that pays a decent wage and provides health insurance and a pension."

Since 1979, inflation-adjusted GDP per person increased 60 percent, but the percentage of workers in good jobs remained unchanged at about 25 percent. If the workforce had not experienced dramatic improvements, the share of good jobs would have fallen 25 to 30 percent, despite large increases in the capital stock per worker and significant technological progress over the period. Moreover, the decline in the underlying ability of the economy to create good jobs is likely an underestimate since this calculation does not control for the larger capital stock or technological advances, both of which should have made it much easier for the economy to produce good jobs.

The study also found that 26.6 percent of the workforce is in a job that pays poorly and offers neither health insurance nor a pension. This is close to the share of Americans in bad jobs in 1979 (27.9 percent).

"How Good is the Economy at Creating Good Jobs?" was based on analysis of data from the March Current Population Survey (CPS). It is the first in a series to explore recent trends in job quality in the U.S. economy.

For access to the report see "How Good is the Economy at Creating Good Jobs?"

 The Center for Economic and Policy Research is an independent, nonpartisan think tank that was established to promote democratic debate on the most important economic and social issues that affect people's lives.

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