Job Quality Index Rises in June as Economy Continues to Recover

WASHINGTON — The Coalition for a Prosperous America (CPA) today announced that the U.S. Private Sector Job Quality Index (JQI) rose slightly to 82.02 in June, up 0.45% from the previous month, as high-quality jobs increased in sectors including manufacturing and health care. The JQI increased only slightly because those high-quality jobs were offset by the rise in low-quality jobs as thousands returned to work in restaurants and hospitality industries.

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. Between 2015 and February 2020, job quality as measured by the JQI declined by some 5 percent, from 83 to 79), reflecting faster growth in low-quality jobs. Low-quality jobs are mainly concentrated in service sectors such as food service, leisure and hospitality. Despite economic recovery in those years, job quality declined because growth was faster in low-quality sectors.

Ironically, the pandemic led to an increase in the JQI because more low-quality jobs were terminated than high-quality.

“Strong employment growth seen this morning in the government data is a healthy development, but a Job Quality Index of 82.02 shows that our economy continues to be dominated by low-quality jobs,” said CPA chief economist Jeff Ferry.

Employment Data

The Bureau of Labor Statistics reported today that the U.S. added 943,000 workers to payrolls in July. However, total nonfarm payroll employment remains 5.7 million jobs below the pre-pandemic level of February 2020. The economy added 27,000 manufacturing jobs in July, but remains 433,000 below the pre-pandemic level. The economy added 380,000 jobs in leisure and hospitality, a broad sector which includes restaurants, hotels, and entertainment industries.

 

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