# Presentation: 432235

## Prospects for Low Wage Workers in the 21st Century

- Rebecca Blank
- University of Michigan

- From one chapter in the volume
**Working and Poor:**
**How Economic & Policy Changes are Affecting Low Wage Workers**
- Rebecca Blank, Sheldon Danziger & Robert Schoeni, editors
- Published by the Russell Sage Foundation, 2006

## 3 problems often stated

- Not enough jobs
- “Good” jobs not available
- Less skilled workers are unreliable workers

## Demographic shifts

- America has become steadily more educated
- Implications:
- Greater selectivity among the less skilled
- High school dropouts are concentrated in certain areas and among certain groups

## Slide 5

## Low wage work vs. Low skilled workers

- In 1999, earnings were below $10/hr among:
- 85% of the female high school dropouts who worked
- 57% of females with only high school degrees who worked
- 46% of women workers with some college (no 4-year degree)
- 17% of women workers with college degrees

## Unemployment

- Always borne disproportionately by the low skilled population
- But little evidence of growing problems over time

## Slide 8

## Low-skilled men

- Declining labor force participation
- Matched with declining wages

## Slide 10

## Slide 11

## Men – What’s driving these trends?

- Trade changes
- Technology changes
- Organizational changes  -- especially unions
- Negative selectivity as the share of the less-skilled falls

## As male wages decline

- Greater participation in informal economy (including crime)
- Greater reliance on other sources of income – including earnings of women

## “Idleness” data

- Percent of men neither currently working nor in school, with education less than or equal to high school (ages 18-54)
- 			Black		White
- 1979		17.4%		9.0%
- 1989		20.6%		11.0%
- 1999		19.6%		10.1%
- 2003		21.8%		10.7%

## Low-skilled women

- Increasing labor force participation
- Flat or increasing wages
- Trends are different..why?

## Slide 16

## Slide 17

## Slide 18

## Slide 19

## Women – why are trends different?

- Policy changes in 1990s pushed less-skilled women into the labor market
- Growing work experience among women raised their wage rates, and employers value their experience more

## Slide 21

## Women – why are trends different?

- Trade/technology forces impacted women differently
- Different industries and occupations
- Growing need for “soft skills” not “strong backs”
- Negative effects of motherhood in labor force have declined

## Slide 23

## How does this story change with race and ethnicity?

- Issues magnified within the black population
- Immigration issues are increasingly important.  Among less-skilled Hispanic natives, trends are much less negative
- (41% of HS dropout male workers and 35% of HS dropout female workers are immigrants)

## Policy & Prognosis

- No evidence of major job shortages among less skilled workers in U.S.,
- But there has been a major shift away from manufacturing and into service sector jobs.

## Policy & Prognosis

- The problem has been a deterioration in the quality of jobs and wage/earnings opportunities.  These are not likely to improve and may even deteriorate further.
- Less-skilled women have seen less deterioration in wages than less-skilled men. This is good given our successful efforts to bring more of these women into work.

## Policy & Prognosis

- If we value work and labor market involvement, we must provide support to low-wage workers to keep them in the mainstream labor market
- 	A variety of policies have been implemented with this concern in mind over the past 15 years:
- 		*  Minimum wage increases
- 		*  Big expansions in the EITC
- 		*  Expansions in health care assistance
- 		*  Expansions in child care subsidies

## Policy & Prognosis

- Moving to a work-based system of support for less-skilled workers (rather than traditional welfare) means keeping unemployment low is a top policy priority
- Must work to reduce the less-skilled population over time.  Education reform and training opportunities are important.