WASHINGTON — The Coalition for a Prosperous America (CPA) today announced that the U.S. Private Sector Job Quality Index (JQI) for November declined by 0.69% in November to 83.71. The latest job figures showed strong growth in low-quality sectors, i.e. industry sectors paying below-average weekly pay, strongly outweighed growth in high-quality sectors.
The decrease in the JQI for November was driven by job growth of low-quality jobs with below average wage and hours. Education and healthcare added 74,000 jobs. Leisure and hospitality added 40,000 jobs. The Education and healthcare super-sector includes both high-paid and low-paid sectors, but the low-paid sectors predominate. The latest data continued the trend we saw throughout 2023, where 81% of the 2.7 million jobs added last year were in those two super-sectors plus government employment. (Government employment is not in the JQI, which is limited to private sector jobs.)
The average weekly wage for production and nonsupervisory workers in November was $990.60, an increase of 0.34% from August and up 3.83% over November 2022. According to the Bureau of Labor Statistics, the consumer price index (CPI) rose 3.1% in November over the previous November’s figure. Weekly earnings for production and supervisory workers are therefore rising slightly in real terms as they catch up with the higher price inflation of 2021-2022.
The Bureau of Labor Statistics (BLS) reported overall job gains of 216,000 in December with the unemployment rate stable at 3.7%. The manufacturing sector added just 6,000 jobs in December, finishing the year at 12.986 million employees, up a slight 12,000 from the December 2022 level. While GDP has shown strong growth in 2023, the manufacturing sector has been flat. The Federal Reserve’s industrial production index for manufacturing came in at 99.2 in November, down 0.8 points from the November 2022 level.
The Job Quality Index measures job quality for U.S. production and non-supervisory workers by comparing workers’ weekly wages to the mean weekly wage for all non-supervisory workers. Those jobs above the mean are classified as high-quality and those below the mean are low-quality. The index is calculated by dividing the number of high-quality jobs by low-quality jobs. An index of 100 means the number of high-quality production and nonsupervisory jobs is equal to the number of low-quality jobs. An index below 100 means that the economy includes more low-quality than high-quality jobs.
Over the past three decades, the JQI declined because the U.S. economy created more low-quality jobs than it has high-quality jobs. As shown in Figure 1, the JQI is down 12.8% from 1990 illustrating the disproportionate growth in low-wage, low-hour jobs.
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