In a Word, No

A Future of Lousy Jobs?: The Changing Structure of U.S. Wages, edited by Gary Burtless

A shadowy drone holds a wrench in one hand, his neck shackled by a thick chain that extends straight into the air-held tight, no doubt, by some invisible hand. The grim image on the cover of this new release from the Brookings Institution demonstrates at least one marketer’s belief that, where American jobs are concerned, misery still sells. So it’s reassuring to discover that the worried question mark in the book’s title, A Future of Lousy Jobs?, is far from perfunctory. The answer given here is no.

This anthology of five papers on changing U.S. wage patterns presented at a March 1989 Brookings conference incorporates a wide array of research findings. Although the various sections- with comments from other labor economists appended-form a disparate, occasionally contradictory whole, a helpful introduction by editor and contributor Gary Burtless, a senior fellow at Brookings, guides the lay reader through what might otherwise seem a morass of economese. The collection would come alive with more vivid, real-world examples of workers and their jobs. But it’s interesting for the way the authors at once reject certain conventional notions about what is wrong with the U.S. labor market and suggest some different problems that bear serious consideration.

The author’s central premise-on which Burtless acknowledges is not shared by all economists-is that earnings inequality between the high, middle and low ends of the wage distribution has grown for male workers, particularly in the last decade. To the extent that the rapid rise of wages at the top of the distribution accounts for this trend, it should alarm only those who find the very fact of differences among workers disturbing. The earnings gap, however, also reflect: an absolute drop in wages for workers below the median. Robert A. Moffitt, for example, states that the real earnings (in 1982 dollars) of men in the 25th percentile dropped from $9,500 in 1967 to $8,400 in 1987.

Where does the “lousy jobs” thesis fit into all this? Many have assumed that growing earnings inequality must mean in increase in low-skill, hence low-wage, obs. But Burtless dismisses this as a “naive view of recent history,” saying that if employers were really “creating a disproportionate number of jobs that required few skills and little education, we would anticipate that the wages of less skilled workers would be bid up relative to those received by better skilled, more educated workers.” He points out that the exact opposite has occurred in the 1980s. In addition to a growing, baby-boom driven gap between the wages of older and younger males, the earnings premium for male college graduates “has exploded,” leaving less educated men behind.

A paper by McKinley Blackburn, David Bloom, and Richard Freeman gives limited support to the common notion that structural shifts from manufacturing to service jobs have contributed to wage inequality. They find that 20 percent to 30 percent of the earnings losses less-skilled men have experienced can be explained by these kinds of industrial changes. But the overriding importance of education and skills is buttressed by their finding that “about 70 to 80 percent of the increase in the earnings gap between college graduates and high school dropouts from 1979 through 1987 occurred within industries.”

Attributing this intra-industry differential to businesses’ attempts “to change their production techniques in a way that requires more able and more skilled workers,” Burtless arrives at his bottom line. The problem low-skilled men face, he writes, “is not an overabundance of bad jobs, as suggested in the title of this book, but a surplus of unskilled workers in a market requiring more skill than ever.” Since A Future of Lousy Jobs? focuses on rising inequality in male earnings, it is important to stress the corollary to this finding: Income inequality among women, Burtless says, is “falling or remaining stable.” This brighter picture for women workers, whose labor-force participation rate has risen enormously in the past 20 years and who are increasingly closing the wage gap with men, is amplified in a particularly interesting paper called “Are Part-Time Jobs Bad Jobs?”

Rebecca Blank, a Northwestern University professor currently with the Council of Economic Advisers, finds that while part-time workers overall tend to earn slightly lower hourly wages than those working full-time, the differences are smaller within occupations. In fact, she says, “Women in part-time service jobs actually appear to earn higher average wages than full-time workers.” Blank points out that three-quarters of all women working part-time in 1987 were not interested in full-time work. She notes that “part-time jobs fill an important role for many women who desire income and labor market involvement but cannot make a full-time labor market commitment.”

This crucial factor is too often underplayed or ignored in discussions of part-time work. The downside to the benefits of part-time work lies in the poorer fringe benefits such jobs tend to offer. As Burtless points out, this will be more of a problem for single women than for those who already receive such benefits through their husbands’ jobs.

Poor benefits may also be a problem for some men. Although far fewer men than women work part-time in the first place, 43 percent of those who do say they would prefer full-time work. This figure has risen during the last 20 years, along with the overall amount of part-time work. The growth in the number of part-time jobs, however, cannot be blamed for male earnings inequality, Burtless says. His paper and another find that “earnings inequality among men has risen because wage inequality has risen, not because there has been a rise in inequality of annual hours of work.” This finding, says Burtless, combined with Blank’s account of part-time jobs, “should lay to rest many fears about the adverse effects of part-time employment on the quality of U.S. jobs.”

In the anthology’s final paper, Robert Moffitt pays Charles Murray the peculiar compliment of attempting to refute something Murray never said. Moffitt explores the notion that increased male earnings inequality might have been caused by work disincentives like those Murray has charged the U.S. welfare system with creating. He acknowledges that Murray’s Losing Ground “does not directly consider the earnings distribution” and cites no one else who has made such a critique. Yet Moffitt proceeds to take great statistical pains to tear apart his own straw man limb by limb.

This exercise is odd. To take one example, Moffitt says that most literature about the effects of transfer programs is “not germane to the issue at hand” since it deals with Aid to Families with Dependent Children payments received by female family heads. The very fact that most welfare payments go to women, of course, would go a long way toward explaining why no one has proposed holding welfare responsible for male earnings inequality. And Moffitt says that the AFDC program has “had disincentive effects on the work effort of female heads.”

Even if Murray’s argument about welfare could be related to the changing distribution of wages, Moffitt’s elaborate attempt to refute it seems of a piece with other critics’ efforts to provide meticulous quantitative documentation showing that welfare does not directly cause illegitimacy and unemployment. Murray has answered such critics by countering that his argument was “expository and speculative” and hardly based on the strict causal model his detractors consider it their duty to rebut. Thus, while Moffitt’s paper includes many interesting details, when he says triumphantly that accelerating earnings inequality growth coincided with declining government transfer growth, he isn’t necessarily saying much.

The most instructive lesson of A Future of Lousy Jobs? concerns the increasing role education and skills play in determining the fate of American workers. “If the nation has too many unskilled workers rather than too many bad jobs,” Burtless writes, “both efficiency and equity will be served by improving the skills of workers now lodged at the bottom.” No doubt some will argue that government should take part in this process, and some businesses may also do so in the spirit of enlightened self-interest. But the most encouraging news here is that individuals can exercise a great deal of control over their future in the job market, provided they make the right kinds of choices about their own human capital.

Ben Wildavsky is assistant managing editor of The Public Interest.

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