Good jobs provide decent wages, decent working conditions, and good benefits. Bad jobs don’t. These things tend to be correlated– you don’t get a job that provides great benefits and terrible wages and terrible working conditions. Minimum wage jobs are generally not great along any dimension.
There’s been a lot of talk lately about minimum wage jobs and income inequality. What is our responsibility towards the poor? What is McDonald’s responsibility? Should taxpayers subsidize low wage jobs so people can live on what they’re making? Why are people working at low wage jobs for decades and not being promoted to a living wage? Why is the median age of a fast food worker in the late 20s, and for women in the early 30s?
Some of the problem is structural. The United States is rapidly becoming polarized. Income inequality is growing. It really is true that the middle class is vanishing. Instead of a good amount of medium-skill middle-income jobs, the country is being divided into low-wage low-skill jobs and high-wage high-skill jobs.
I present for you a fascinating and depressing article on the topic:
The Growth of Low-Skill Service Jobs and the Polarization of the US Labor Market
David H. Autor and David Dorn
We offer a unified analysis of the growth of low-skill service occupations between 1980 and 2005 and the concurrent polarization of US employment and wages. We hypothesize that polarization stems from the interaction between consumer preferences, which favor variety over specialization, and the falling cost of automating routine, codifiable job tasks. Applying a spatial equilibrium model, we corroborate four implications of this hypothesis. Local labor markets that specialized in routine tasks differentially adopted information technology, reallocated low-skill labor into service occupations (employment polarization), experienced earnings growth at the tails of the distribution (wage polarization), and received inflows of skilled labor.
We also hear a lot about job creation and how important it is to support small businesses and small entrepreneurs. But what kinds of jobs are these small businesses creating?
By Adam Seth Litwin and Phillip H. Phan
Although much has been written on the quantity of jobs created by entrepreneurs, scholars have yet to examine the quality of these jobs. In this article, the authors begin to address this important issue by examining nearly 5,000 businesses that began operations in 2004. They investigate the extent to which nascent employers provide what many think of as quality jobs—those offering health care coverage and a retirement plan. The authors find that because of small scale, constrained resources, and protection from institutional pressures, start-up companies do not provide their employees with either of these proxies for job quality, and their likelihood of offering health or retirement benefits increases only marginally over their first six years of operation. The finding that entrepreneurs’ impressive record of job creation is not matched by a similarly impressive outcome with respect to job quality challenges policymakers to ensure that entrepreneurs are encouraged to create quality employment opportunities in the course of creating new businesses.
On the whole, not very good ones.
But it isn’t the invisible hand that’s creating this income inequality all by itself. The government can subsidize poor people directly, allowing companies to continue to exploit cheap labor (or it can let those people and their children starve, as Fox News seems to be encouraging–something that will eventually lead to riots in the short term and lower productivity in the long term). Or the government can change its policies to stop promoting income inequality. It can go back to many of the big Nixon- and Johnson- era policies that helped promote a growing middle-class. So that people don’t work at McDonald’s at minimum wage for decades unless that is truly all that they’re capable of doing.