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Low-Wage Lessons

Monday, January 30, 2012 By John Schmitt, Center for Economic and Policy Research | Report
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Over the last two decades, high – and, in some countries, rising – rates of low-wage work have emerged as a major political concern. According to the Organization for Economic Cooperation and Development (OECD), in 2009, about one-fourth of U.S. workers were in low-wage jobs, defined as earning less than two-thirds of the national median hourly wage (see first figure below). About one-fifth of workers in the United Kingdom, Canada, Ireland, and Germany were receiving low wages by the same definition. In all but a handful of the rich OECD countries, more than 10 percent of the workforce was in a low-wage job.

If low-wage jobs act as a stepping stone to higher-paying work, then even a relatively high share of low-wage work may not be a serious social problem. If, however, as appears to be the case in much of the wealthy world, low-wage work is a persistent and recurring state for many workers, then low-wages may contribute to broader income and wealth inequality and constitute a threat to social cohesion. This report draws five lessons on low-wage work from the recent experiences of the United States and other rich economies in the OECD.

As the world rises up against economic injustice, Truthout brings you the latest news and analysis, free of corporate influence. Help support this work with a tax-deductible donation today.

Read the full report here.

John Schmitt

John Schmitt is a senior economist with the Center for Economic and Policy Research in Washington, DC. He has written extensively on economic inequality, unemployment, the new economy, the welfare state, and other topics for both academic and popular audiences. He has also worked as a consultant for national and international organizations including the American Center for International Labor Solidarity, the Global Policy Network, the International Labor Organization, the United Nations Economic Commission for Latin America, and others. Schmitt's research has focused primarily on inequality in the US labor market and the role of labor-market institutions in explaining international differences in economic performance, particularly between the United States and Europe. Schmitt has co-authored (with Lawrence Mishel and Jared Bernstein) three editions of The State of Working America (Cornell University Press). He has also contributed to The American Prospect, The Boston Review, Challenge, The Guardian, The International Herald Tribune, The Washington Post, and other newspapers and magazines.


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Low-Wage Lessons

Monday, January 30, 2012 By John Schmitt, Center for Economic and Policy Research | Report
  • font size decrease font size decrease font size increase font size increase font size
  • Print

Over the last two decades, high – and, in some countries, rising – rates of low-wage work have emerged as a major political concern. According to the Organization for Economic Cooperation and Development (OECD), in 2009, about one-fourth of U.S. workers were in low-wage jobs, defined as earning less than two-thirds of the national median hourly wage (see first figure below). About one-fifth of workers in the United Kingdom, Canada, Ireland, and Germany were receiving low wages by the same definition. In all but a handful of the rich OECD countries, more than 10 percent of the workforce was in a low-wage job.

If low-wage jobs act as a stepping stone to higher-paying work, then even a relatively high share of low-wage work may not be a serious social problem. If, however, as appears to be the case in much of the wealthy world, low-wage work is a persistent and recurring state for many workers, then low-wages may contribute to broader income and wealth inequality and constitute a threat to social cohesion. This report draws five lessons on low-wage work from the recent experiences of the United States and other rich economies in the OECD.

As the world rises up against economic injustice, Truthout brings you the latest news and analysis, free of corporate influence. Help support this work with a tax-deductible donation today.

Read the full report here.

John Schmitt

John Schmitt is a senior economist with the Center for Economic and Policy Research in Washington, DC. He has written extensively on economic inequality, unemployment, the new economy, the welfare state, and other topics for both academic and popular audiences. He has also worked as a consultant for national and international organizations including the American Center for International Labor Solidarity, the Global Policy Network, the International Labor Organization, the United Nations Economic Commission for Latin America, and others. Schmitt's research has focused primarily on inequality in the US labor market and the role of labor-market institutions in explaining international differences in economic performance, particularly between the United States and Europe. Schmitt has co-authored (with Lawrence Mishel and Jared Bernstein) three editions of The State of Working America (Cornell University Press). He has also contributed to The American Prospect, The Boston Review, Challenge, The Guardian, The International Herald Tribune, The Washington Post, and other newspapers and magazines.


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blog comments powered by Disqus