Are Workers Getting Good Jobs?
By Arnold Kling
Two pieces in the New York Times discuss the labor market. Alan Krueger talks about the issue of defining a “good job.”
Neoclassical economics hardly recognizes a distinction between good jobs and bad ones. All workers are supposed to be in jobs that reward them appropriately for their performance, which depends on their skills and effort. Supply and demand for workers determine their appropriate pay, benefits and working conditions, and there is little else to say.
…but an expanding line of research, thoroughly summarized in a recent book by Alan Manning called “Monopsony in Motion” (Princeton University Press, 2003), shows that monopsony power can exist even when there are many employers in a market, if workers are immobile or imperfectly informed about alternative job offerings.
…If the labor market corresponded to the competitive ideal, in which all jobs offered appropriate compensation based on workers’ merit, there would be little need for civil rights legislation, unemployment benefits, safety and health regulation, the minimum wage, or Social Security. Expect the debate to continue.
Government data, industry surveys and interviews with employers big and small indicate that many businesses remain reluctant to hire full-time employees because health insurance, which now costs the nation’s employers an average of about $3,000 a year for each worker, has become one of the fastest-growing costs for companies.
Maybe that is what explains one fact that Krueger cites, namely that
The average real hourly wage of production and nonsupervisory workers, who make up 80 percent of the private work force, actually fell over the last 12 months; the increase in the wage rate was one percentage point less than the inflation rate.
Perhaps if you look at total compensation, including health care payments, those lucky enough to be employed are getting significant raises.
For Discussion. What would be the economic advantages and disadvantages of doing away with employer-provided health insurance?