Job Quality Index Up Slightly As High & Low Quality Jobs Rise

WASHINGTON — The Coalition for a Prosperous America (CPA) today announced that the U.S. Private Sector Job Quality Index (JQI) edged up by 0.01% to 81.279 in July, as the addition of high-quality jobs slightly exceeded low-quality job additions.

High-quality jobs increased in professional and business services and health care and social assistance. Low quality jobs increased in food service and health care. The average weekly wage for production and nonsupervisory workers came in at $935.71 in July, up 5.6% on the year-earlier level, indicating a loss in real incomes since consumer price inflation was up 8.5% in July.

The Bureau of Labor Statistics reported today that the U.S. added 315,000 workers to nonfarm payrolls in August, while the unemployment rate edged up to 3.7%. Most significant was the rise in the labor force participation rate by 0.3 points to 62.4%. This could indicate a significant upturn in individuals returning to the labor force and seeking work, likely because pandemic-period savings are exhausted. However, there are still 11.5 million people either unemployed or not in the labor force but would like a job, according to today’s BLS report.

Manufacturing employment rose by 22,000 in July to reach a total of 12.852 million. Manufacturing jobs are up by 461,000 in the past year. Transportation manufacturing jobs are up 52,000 to 1.704 million in August. Last month, the Federal Reserve reported that manufacturing production rose 0.7% in July as automotive and other durable goods production rose strongly. Manufacturing production was up 3.2% compared to the year-earlier level.

“Job quality continues to be stagnant as low-quality sectors like food service grow in response to rising consumer spending on services,” said CPA Chief Economist Jeff Ferry. “With another 75 basis point interest rate increase likely later this month, the economy is likely to soon feel the pressure of tighter money, which will bring renewed downward pressure on the Job Quality Index.”

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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