WASHINGTON — The Coalition for a Prosperous America (CPA) today announced that the U.S. Private Sector Job Quality Index (JQI) was 81.85, down by -0.89% from the preceding month. Despite the federal government’s strong March 2024 Jobs Report released last Friday, the JQI shows the US labor market suffers from persistent structural issues.
The March Jobs Report showed the US economy adding 303,000 jobs in March and the unemployment rate falling slightly to 3.8%. This surpassed expectations from most economists and also eases the pressure on the Federal Reserve to reduce the target range of the federal funds rate.
However, the top industries adding jobs are primarily in low-paid, low-quality job sectors. The top sectors by total jobs added in March 2024, were Leisure and Hospitality (up 54,000 jobs), Construction (up 33,000 jobs), and Retail Trade (up 14,800 jobs). Jobs in these categories are largely below the US average weekly wage, showing US job gains are skewed toward lower-quality job groups.
The JQI, developed by CPA in partnership with other economists, divides the U.S. private sector nonmanagement labor force of 109.6 million employees, into 16 sectors and 164 subsectors to evaluate economic trends in national employment. Sectors where the average weekly wage is above the average weekly wage for this group are termed “high-quality jobs” and those below are “low-quality jobs.” The data shows that for over 30 years the U.S. economy has created more low-quality jobs than high-quality.
Among high-quality jobs, the top subsector by job growth was Foundation, structure, and building exterior contractors, with 6,900 jobs added between January and February (a 0.9% increase).
According to the government’s report, total manufacturing jobs in March were 12.956 million, unchanged from February. The report also shows that the top manufacturing subsector for job growth was the high-quality job subsector of Transportation equipment manufacturing, which includes auto and airplane manufacturing. This subsector saw an increase of 5,900 jobs in February and an average weekly wage increase of 2.7%. The top job growth manufacturing subsector within low-quality manufacturing jobs (Paper manufacturing) also saw a sizable wage increase of 2.2%, pushing the subsector to only 0.5% below the average weekly wage.
There was also remarkably strong wage growth in the high-quality job subsectors of Independent artists, writers, and performers as well as Logging. The average weekly wage for Independent artists, writers, and performers increased by 14.9%, but overall employment decreased by 4.1%. The story is similar with the logging subsector, which saw an 11.2% increase in average weekly wages, but a 0.9% drop in employment.
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