What’s a Good Job, and Why Aren’t There More of Them?

Technology is gutting the middle of the market, and five other myths about jobs

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Steven Cherry: Hi, this is Steven Cherry for IEEE Spectrum’s Techwise Conversations.

A show earlier this year about the job market, specifically the so-called skills gap, was hugely successful, being read or listened to four times as often as the next-most-popular podcast. And with good reason.

Engineers have weathered the global economic recession about as well as any group, but we’re still seeing many full-time jobs turning into part-time consultant gigs, or worse, engineers needing to take work entirely outside of engineering, often at calamitously lower wages.

People in the U.S., and in fact all over the world, need jobs, and not just any jobs, but good jobs. But what’s a good job? A 2011 book, Good Jobs America: Making Work Better for Everyone, tries to answer that question.

Along the way, the book explodes a number of myths about jobs, good ones and bad, before recommending some steps toward making bad jobs better. It was written by Paul Osterman and Beth Shulman. Beth Shulman passed away in 2010, during the writing of the book.

Paul Osterman is a professor of human resources and management at the MIT Sloan School of Management, and also a member of the Department of Urban Planning. He’s my guest today, by phone.

Paul, welcome to the podcast.

Paul Osterman: Thank you very much.

Steven Cherry: Paul, I want to get to the myths, but first: What’s a good job?

Paul Osterman: Well, a good job has a number of characteristics. First, obviously it pays enough to support a family. And remarkably, my data showed that 20 percent of adults are working at jobs that do not pay enough to get them above the poverty line. Which is a stunning figure, I think. Secondly, a good job involves health care, provides health care, provides a decent pension. Now those are the economic dimensions, and those are the ones I focus on in the book. You could also argue, and I would agree, that a good job requires . . . a really good job would have opportunities for personal growth, for skill development, would be interesting. Those are all softer aspects.

Steven Cherry: Okay. Onto the myths. Myth No. 1: Market interventions inevitably cost jobs and lead to economic inefficiency. First of all, what are some typical market interventions, and then why is this a myth?

Paul Osterman: Right, so when I talk about that myth, what I’m trying to do is to move us away from the idea that policy, public policy, is always a bad idea, that we simply have to let the market generate whatever set of outcomes it generates and accept that because it’s efficient and it’s inevitable. So, I don’t think that’s true, and I think the evidence shows that that’s not true. For example, we have laws about child labor; we have laws about health and safety. Overwhelmingly, Americans accept those laws. They “interfere” with the market, but so be it. It leads to better outcomes. In the book I show that a range of interventions, for example, the minimum wage being a classic example, can be implemented without killing jobs. I also show that many of our international competitors have a higher proportion of good jobs than we do yet have very active labor market policy.

Steven Cherry: Let’s take another myth: A rising tide lifts all boats, so we just need to improve the economy overall.

Paul Osterman: So there I think it’s important to walk a careful line. There’s no question that a strong macroeconomic economy is important and really helps. No question. I’m not trying to say that’s not true. But if you look, for example, at the 1990s, when we had the best economy of our lifetime and unlikely to repeat that anytime in the near future, even toward the end of the 1990s, after these many years of very strong economic growth, still just under 20 percent of people were in these low-level, low-quality, low-paying jobs. So, yes, a strong economy is important. It’s necessary, but it’s not sufficient.

Steven Cherry: Another myth is upward mobility? It’s okay for there to be bad jobs because people can work hard and rise above them.

Paul Osterman: It’s just simply a question of the data. Now we do know that kids, young people, obviously, start out in lousy jobs, and obviously most of them move up. No question. But if you take a typical adult working in a low-level job, a low-wage job, a low-quality job, say, at the age of 25 or at the age of 30, and you ask if he or she will find their way into the middle class or better over their lifetime, the odds are very low. There’s much less mobility for adults than one would think given the rhetoric around that.

Steven Cherry: One more myth: Education and training is the master solution.

Paul Osterman: Imagine everybody in America suddenly, magically, had a college degree or magically had a four-year college or a community college degree. Would, suddenly, all those bad jobs go away? And the answer is no, right? You’re still gonna need people chopping lettuce in kitchens, you’re still gonna need people doing laundry, you’re still gonna need all these folks doing all these jobs, which currently pay very little. And it’s very unlikely that they’d pay a lot more if the person doing them just had a college degree. So, yes, get more education. “Stay in school, kid” is good advice. But it’s not gonna be enough.

Steven Cherry: Isn’t that one of the big reasons why there’s this kind of persistent 20 percent, even in a very strong economy? Those jobs are always gonna pay pretty lowly and often below the poverty line.

Paul Osterman: Well, except that, again, you can show that that doesn’t have to be the case. For example, I could give you examples of nursing homes which have found ways to upgrade the careers of their CNAs, their certified nursing assistants. To put them on ladders to climb up to registered nurses or licensed practical nurses positions. You can do the same in hospitals. You can show that it’s possible to build career ladders. You can show that in a number of different retail stores, people earn more money than they do at standard, than they might at Walmarts or wherever.

Steven Cherry: I found that certified nursing assistant example in your book pretty interesting, in part because I noticed a relatively small percentage of the CNAs actually did complete the training, which was sponsored, in your example in the book, by the employer, to sort of become the next rung up. And yet it occurred to me that, that program that the employer had might have made many of those jobs better—more than just the 28 people or whatever that rose to that extra rung—because just the very possibility of upward mobility made their current jobs better.

Paul Osterman: You know, I think that’s a really important insight. I completely agree. You know, people, this is what we talked about at the very beginning of this conversation. It’s one thing to focus entirely on money, and money’s obviously important. But people care about a sense of being respected. They care about being given opportunities. They care about dignity. And simply the notion that their employer is giving them a chance and offering them a program, and that some of them take that opportunity and others don’t, I think, as you just said, I think improves the quality of the work for everybody.

Steven Cherry: On the upside, there’s another common belief that you say is a myth. And this is the belief that technology is gutting out good working-class and middle-class jobs. Some people describe this as a barbell economy, with a lot of good jobs at one end and a lot of bad jobs at the other, and not much going on in the middle. Why is this a myth?

Paul Osterman: Well, yeah, so I’m very concerned about this. The other kind of term that you hear a lot about is “polarization.” And the argument is, as you just said, that technology will erode those jobs in the middle. So you’re either at the very high end, that you can’t automate, or at the low end, that you can’t automate, but there’s nothing in the middle. I think there’s a couple of reasons why that’s a myth. First, I think it exaggerates the impact of technology. I’m involved in a project now in manufacturing, looking at the trajectory of manufacturing in America. And, yes, obviously there’s a lot of factories with very few people on the floor. There’s a lot of automation. But there’s still plenty of technician jobs and repair jobs of various kinds that require people with good middle-level skills. So one is, I think that’s an exaggeration.

But the other reason, and by the way, the projections coming out of the Bureau of Labor Statistics support that notion: that there’ll still be a lot of middle-level jobs. But the other point is the huge wave of retirement that’s facing us, right? So the baby boom generation is about to retire en masse. And so there’s gonna be millions of these jobs that are gonna come open, and employers are gonna face a lot of pressure to fill these middle-level jobs.

Steven Cherry: I’m glad you mentioned the Bureau of Labor Statistics, because a recent New York Times article noted that the BLS has calculated that retail and wholesale sectors have cut a million full-time jobs since 2006, while adding half a million part-time jobs. When people aren’t getting a full-time wage, even when it’s a job they otherwise like, that’s not a good job.

Paul Osterman: I agree. It’s a terrible situation. So a number of things are happening there. One is the cutting of the jobs to part time. Secondly it introduces a lot of instability in the scheduling, right? A lot of these folks don’t know until the last minute when they’re expected to work. Which creates havoc with family life. And third, a lot of these jobs are being cut below the threshold that the employers use for benefits. Which is one of the motivations for reducing the work to part time. So, again, this is an option. Nature doesn’t require this; technology doesn’t require this. It’s not an act of God. It’s being done at human discretion, and it could be reversed or changed, too.

Steven Cherry: We’ve been talking about jobs in the U.S. But to what extent is this a global problem?

Paul Osterman: It’s a global problem in the sense that employers all across the globe, at least in the developed world, are facing similar pressures: of international competition, of technology, and the like. And if you look at Europe, you see kind of a mixed picture in Europe. On average, there are fewer “bad” jobs in Europe than there are in the United States. The United States is an outlier, along with Great Britain, in terms of the proportion of bad jobs in our labor force that are held by adults.

On the other hand, things are evolving in Europe in the direction of more bad jobs. So that is to say, take Germany as a classic case, the proportion of low-wage jobs in Germany has grown in the last decade and a half, even though it’s still not quite as extreme as it is in the United States. And we know, for example, in southern European countries, in Spain, which happens to be a country I know a lot about, the proportion of part-time jobs and temporary jobs is massive. So there are pressures all over the world with respect to these issues.

Steven Cherry: The U.S. is the home of the Horatio Alger story, and yet upward mobility now is greater in a lot of other countries than the U.S. Why is that?

Paul Osterman: Well, again, I think that’s absolutely right. The data supports your point. And people are surprised to hear this, because they think of the United States as this fluid, upward mobility society. People think of Europe as kind of class-bound, rigid. And, in fact, that’s not the reality. And part of the reason is that in a number of European countries, the education system is much more oriented toward giving people these middle-level skills.

So take Germany as an example. A smaller proportion of Germans go to universities, classical universities, than they do, than people do in the United States. But a far larger percentage of German youths get very, very high-level and high-quality vocational training while in high school and post-secondary institutions. So they get better jobs as part of that. And the other thing that characterizes countries like Germany and Switzerland are these what are called “dual training systems.” The employer community is very invested in making the system work. One of the discouraging things that I’ve noticed in this study of manufacturing that I described a second ago is that American employers are tending to cut back on the amount of training they provide their work force.

Steven Cherry: In that earlier podcast that I mentioned, training was a big issue there as well. I notice also that a big part of your definition of a good job right at the beginning involved much of what we call the safety net: health care, pensions, retirement income of various kinds. And the safety net is stronger in other countries than the U.S., as well.

Paul Osterman: The safety net is substantially stronger. And that has multiple consequences. First, it makes people better off obviously, to know that that’s there. Secondly, let me give you another example coming out of manufacturing. A lot of manufacturers are complaining that they can’t find people, that there’s a skill shortage. Young kids don’t want to go into manufacturing. Now, it’s not because I think that people think that manufacturing is dirty or dangerous, because manufacturing has been transformed. It’s because everybody understands that it’s highly volatile, that employment levels go up and down with the economy. It’s kind of an insecure place to make a long-term career.

Now if there was a better safety net in this country, if there was better job-training programs, if there was stronger pension protections, over in Europe what they call “flex security”—that is to say, if you lose your job we’ll help you find a new one and make it work—then this kind of labor shortage of people not wanting to go into manufacturing would ease, I think. And so the safety net plays a double role. One is, it helps protect people, but second is it makes the labor market work more efficiently.

Steven Cherry: Very good. The problem of good jobs is a hugely complicated one, and some of it seems intractable and some of it seems tractable, and your book does the hard work of sorting these out. So thanks for writing it, and thanks for joining us today.

Paul Osterman: I enjoyed it. Thank you very much

Steven Cherry: We’ve been speaking with Paul Osterman, author of the 2011 book Good Jobs America: Making Work Better for Everyone, about how we can make bad jobs better.

For IEEE Spectrum’s “Techiest Conversations,” I’m Steven Cherry.

Announcer: “Techwise Conversations” is sponsored by National Instruments.

This interview was recorded 6 December 2012.
Segment producer: Barbara Finkelstein; audio engineer: Francesco Ferorelli
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