There has been a whole lot of success over time in the U.S. labor market, and it shows in workers’ own opinions of their jobs.
A new paper from economists Adam Ozimek, John Lettieri, and Benjamin Glasner from the Economic Innovation Group asks readers to consider one narrative about the labor market:
It goes something like this: Workers are experiencing an age of unprecedented disruption. The rise of e-commerce and automation, increasing foreign competition, and the proliferation of gig platforms have upended the typical employer-employee relationship and the stability that workers used to enjoy. As a result, more workers are taking on side gigs or cobbling together multiple part-time jobs just to get by. Not only that, but even good jobs are more precarious than in previous eras. Back when manufacturing ruled the U.S. economy, workers could expect a job for life. Today, they are forced to switch jobs more often than ever before.
It’s common to hear a narrative like this from people on the political left and right, and in apolitical settings as well. Maybe you think this characterization is true. Maybe you think parts of it are true and parts of it are false.
Ozimek, Lettieri, and Glasner go through the actual data on these topics, and more, and find that this popular account is entirely false. That’s not to say the labor market is perfect. It is to say that policy should not be made on false premises, and that’s a risk we run if policy-makers believe this narrative.
Here are the facts, from the paper:
- Holding multiple jobs is slightly less common today than in the past. In 1994, 5.9 percent of workers had more than one job. Today, 5 percent do. And the rate of people holding multiple jobs tends to fall during recessions and rise during expansions. “This suggests that the phenomenon represents an opportunity that arises from strong labor markets with plenty of jobs rather than a necessity for surviving poor economic times,” the paper says.
- The average worker works fewer hours today than in the past. In the 1960s, a work week over 38 hours was average. By the 1980s, it was around 35 hours. Today it is just under 34 hours. (These reductions happened without the government changing the work week through regulation, as Bernie Sanders wants to do.)
- The proportion of the labor force working part-time, 19.3 percent, is lower today than it was in 1980. Only 2.6 percent work part-time due to economic necessity. “The vast majority of those who work part-time do so by choice and the vast majority of those who want full-time work can find it.”
- Workers don’t change jobs more often than in the past. In 1980, 16.9 percent of workers had changed jobs in the previous year; it was around 15 percent in 2000; today it’s 11.1 percent. The median length of time spent with one employer has risen from 3.2 years to 4.1 years between 1980 and today. There’s actually an economic case that fewer job changes is bad for workers. “Job switching tends to meaningfully boost a worker’s lifetime earnings, and it also helps knowledge and productivity gains to spread throughout the economy,” the paper says.
- If someone in the United States has a job, it is almost impossible to be in poverty. Before government transfers, only 4.9 percent of American workers are in poverty. After government transfers, that goes to near zero.
- Four-fifths of workers have paid sick leave today. One-fourth have paid family leave. Both of those proportions are record highs. In the past 20 years, the average worker has gained two paid vacation days.
- The rate of workplace injuries is about one-third what it was in 1980.
- In the years between 1980 and 1997, many of which are fondly remembered as good economic times, the unemployment rate never went below 5 percent. In the last couple of years before the pandemic and since the pandemic recovery, an unemployment rate of 4 percent or below has been common.
- The shift toward services and away from goods has been ongoing for decades. “Even as far back as 1950, a majority of U.S. workers were employed in the services sector, but the share has been increasing ever since,” the paper says. The shift was caused first by the decline in agricultural employment, then by the reduction in the share of workers in manufacturing.
All of this isn’t some kind of data-gaming from economists who are disconnected from workers’ actual experience. Surveys of workers find job satisfaction to be high:
- Half of U.S. workers told Gallup they are “completely satisfied” with their jobs, which is up from only one-third in 1993. “Workers who are either completely or somewhat satisfied with their jobs outnumber those who are not by more than 10 to one in the Gallup survey,” the paper says. “At no point in the survey’s three-decade history has the share of completely dissatisfied workers been larger than 5 percent.”
- The General Social Survey finds that 87 percent of U.S. workers are either very or moderately satisfied with their jobs. And that finding is very stable, no matter how the economy is doing. “Throughout the entire five-decade history of the GSS, through periods of deep recession and surging economic expansion, the share of satisfied workers has never been lower than 80 percent or higher than 90 percent.”
- In the early 1990s, 79 percent of workers told Gallup they were completely or somewhat satisfied with their job security. In 2023, it was 88 percent. The satisfied workers also became more satisfied with their job security over time. The “completely satisfied” category grew from 46 percent in the early 1990s to 63 percent in 2023.
This narrative is adjacent to another major false narrative about the labor market: that pay and productivity are no longer linked, and that pay has stagnated for decades. Last month, I wrote about a paper by Scott Winship of the American Enterprise Institute that corrects that narrative and instead finds that the correlation between pay and productivity remains very strong. Productivity inequality and changing social norms around work have more to do with labor-market changes in the past few decades.
Policy-makers must not work from false narratives when making policy. That will lead them to wrongheaded conclusions that would make things worse. Building on success is a different task from correcting failure. There has been a whole lot of success over time in the U.S. labor market, and it shows in workers’ own opinions of their jobs. Don’t screw it up.