Are the new jobs good jobs? Well, we're not sure…

Original Reporting | By Mike Alberti |

Andrew Sum, director of the Center for Labor Market Studies at Northeastern University, said that he would personally like to use data on the occupational wages of new hires to analyze structural employment, or unemployment that does not result from a low demand for labor, but from a disparity between the skills that workers have and the skills that are necessary for particular jobs. He explained that, despite assertions that much of the unemployment in the U.S. is structural in nature — which means it is very hard to correct — if it actually were structural, you would expect upward wage pressure in high-skill occupations, because employers would have to “bid” wages up to attract workers. Sum said that he had found little evidence of structural unemployment in the current labor market, but having wage data for new hires would give economists a clearer picture of how much unemployment is structural, and how much is not, which could drastically affect the policies that are put in place to put people back to work.

Economists said that occupational wage data for new hires could be used in making policy decisions in several areas, including education and training, unionization, monetary policy, industrial policy, and employment policy.

Robert Lerman, a labor economist at the Urban Institute, said that the data could also have implications for education and training. “If I knew that certain occupations were starting to pay more or less,” he said, “I would be interested in the interaction between that [phenomenon] and the educational status of workers taking those jobs. One key policy question is: what are we training people for?”

Lerman said that, while the government should be trying to raise wages in all industries and occupations, policy-makers should also be tailoring education and training policy to prepare workers for higher wage jobs and attempting to increase the high-wage employment opportunities for workers without a college degree.

Additionally, Lerman pointed out that finer detail on how wages are rising or falling would be useful to the Federal Reserve as it is setting monetary policy. “You would have a better indication about where there’s flexibility in the labor market and where there is inflationary wage pressures,” he said. “I would think that’s something the Fed would be interested in.”

Heidi Shierholz, an economist at the Economic Policy Institute, said that she would be interested to see the occupational wage data in relation to other data on unionization rates. “Unionization has been clearly shown to increase wages,” she said. “Whenever I see wages falling, I think about what policies would make it easier for workers who want to be in a union to join a union.” Having data on the wages of new hires in specific occupation would allow state, local and federal governments to more effectively craft those policies, she said.

“When we see employment rising, how do we know whether that’s because we’re really becoming more competitive or because wages are falling?” — Mark Perry, American Enterprise Institute

And Mark Perry, an economist at the American Enterprise Institute, said that having such data would shed more light on the competitiveness of American industry. “When we see employment rising, how do we know whether that’s because we’re really becoming more competitive or because wages are falling?” he asked.

But it is not just policy-makers, economists and think tanks that could benefit from having data on the wages of new hires. Karen Kosanovich, an economist with the Current Population Survey program at the BLS, said that she fields several calls a week from workers who want to know what the starting wage is in an occupation where they are seeking a job.

“We get a lot of calls from individuals who are making decisions about what they should be making,” she said. “I can tell them the average wage, but if they want to know the starting wage, I can’t produce that for them.”


Obstacles “more institutional than practical”

There are some practical obstacles to obtaining data on the wages of new hires at the occupational level, but economists agree that the BLS could collect that information in several different ways. The most practical vehicle, according to Kosanovich, would likely be the Current Population Survey (CPS), which is a monthly survey of households on a range of topics.

The CPS currently asks about job tenure in a biennial supplemental survey usually conducted in January. And though some industry-wide information on the wages of new hires can be gleaned from these data, Kosanovich explained that the survey size is too small to provide accurate information at the level of detailed occupations. To address that problem, questions about job tenure would need to be asked more often, or asked of more households, or both.

And according to George Long, a BLS economist with the National Compensation Survey, the obstacles to collecting the data are “more institutional than practical.”

“If we don’t provide certain information,” Long said, “it is because Congress has decided that it does not need that information on a regular basis.” Moreover, Long explained, every change that the BLS makes to its surveys must first be cleared with the Office of Management and Budget (OMB) as part of a 1980 law called the Paperwork Reduction Act. “The OMB is particularly concerned with ‘respondent burden,’” Long said. “They really don’t want us to ask more questions than we are required to by law.”

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