Job Quality Index Rises Slightly in May

WASHINGTON — The Coalition for a Prosperous America (CPA) today announced that the U.S. Private Sector Job Quality Index (JQI) rose slightly to 81.68 in May, up 0.39% from the previous month, as high-quality jobs increased in sectors including health care and automotive dealerships in May. The JQI increased only slightly because those high-quality jobs were offset by low-quality jobs added in leisure, hospitality, and food service sectors.

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.

“Job quality continues to be a deep, underlying problem in the U.S. economy because with economic recovery, we create many more low-quality jobs than high-quality,” said CPA chief economist Jeff Ferry.

Employment Data

The Bureau of Labor Statistics reported today that the U.S. added 850,000 workers to payrolls in June. The largest addition came in the leisure and hospitality sector, where 343,000 jobs were added. Most leisure and hospitality jobs are low-quality jobs, with weekly wages well below the national average, which is around $847 for non-supervisory workers. Job growth in the manufacturing sector, which is mostly high-quality jobs, was limited to just 15,000 jobs. The  motor vehicle sector lost 12,000 jobs, probably due to layoffs associated with parts shortages that have constrained auto production at most major manufacturers. Motor vehicles manufacturing jobs are high-quality. The manufacturing sector is still 481,000 jobs below the February 2020 pre-pandemic level.


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