Job Quality Index Slips As Economy Adds Jobs

WASHINGTON — The Coalition for a Prosperous America (CPA) today announced that the U.S. Private Sector Job Quality Index (JQI) edged down by 0.03% to 81.27 in June, as low-quality job growth slightly exceeded high-quality.

Low-quality jobs increased in the healthcare, accommodation, and food service industries. High-quality jobs increased in professional and business services. The average weekly wage for production and nonsupervisory workers came in at $930.26 in June, up 5.6% on the year-earlier level, indicating a loss in real incomes since consumer price inflation was up 9.1% in June.

The Bureau of Labor Statistics reported today that the U.S. added 528,000 workers to nonfarm payrolls in July, while the unemployment rate edged down to 3.5%. Manufacturing employment rose by 30,000 in July to reach a total of 12.826 million.

Employment continues to rise as service industries recover from the pandemic shutdown. The labor force participation rate of 62.1% (down 0.1% from June) shows that thousands of potential workers are still not returning to work. The strong employment growth contrasts with weak economic data on the spending side such as the contraction of 0.9% in GDP in the second quarter.

Earlier this week, CPA published its Domestic Market Share Index, which fell to an all-time low of 64.9, indicating that domestic producers held just 64.9% of the market for manufactured goods consumed in the U.S. Eroding domestic share and rising import share leads to the loss of high-quality jobs, putting downward pressure on the JQI and real incomes for nonsupervisory employees.

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 JQI is down 14.5% from 1990 (see Figure 1), when the current data series begins, illustrating the aggressive growth in low-quality jobs, which are low-wage and often low-hour too.


Figure 1. Job Quality Index 1990-2022


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