Increasing the Quality of Jobs

By many measures, the American economy is booming. Businesses are recording high profits, and unemployment is down to its lowest level in decades. Yet too many American workers still find themselves in precarious financial situations. Getting and holding down a job alone no longer translates into economic stability or mobility for a broad swath of workers.

Many low-wage jobs are in the growing service sector and include retail workers, home health and personal care aides, janitors, childcare workers, and restaurant servers and cooks. Often, such positions leave workers with volatile incomes or do not pay enough to allow workers to meet basic needs. They tend to offer few benefits, have part-time, challenging, and/or unpredictable schedules, and give workers limited opportunities to have their voices heard. These jobs are also disproportionately held by blacks, Latinos, and women.

A common response to this grim reality has been to focus on educating and training workers, also known as “upgrading the worker.” It is true that workers with higher education and training levels better weathered the recent recession. Education and training, along with programs that address barriers to work, such as lack of transportation or childcare, can help individual workers move up the ladder to achieve economic security. But training and education can only take us so far when a large number of jobs do not provide wages, benefits, and working conditions that allow workers to survive, let alone thrive. Ultimately, workers’ prospects are limited by the quality of available jobs.

In recent years, changes in labor policy and business practices have improved the jobs open to low-wage workers. Many states have raised the minimum wage and/or passed laws requiring paid sick or family and medical leave. Many businesses are also offering higher wages and better benefits to attract and retain workers in a tight labor market. These changes are moving us in the right direction, but we have a long way to go to transform the low-wage jobs in the current labor market into sustainable jobs that give workers the opportunities that are the hallmark of the American dream.

Over the next few years, the Boston Fed will focus this initiative on strategies to improve the quality of jobs in the New England region. We will convene leading researchers in this area. We will inform policies that aim to raise work standards. We will partner with businesses to understand the challenges they face and the opportunities that exist to redesign jobs. And we will explore how investors, financial institutions, large employers, and governments can incentivize the creation of higher-quality jobs. Our team will collaborate with seasoned and accomplished worker advocates, policymakers, researchers, and business owners to learn from their experiences and test new ideas and approaches in the pursuit of better jobs for more workers in our communities.