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More Americans may be going back to work, but their jobs are getting worse

April 16, 2021

Essential_worker_Christine_McCann_sffLast April, the coronavirus pandemic brought the longest economic expansion in American history to an abrupt and shocking halt. In just a few short months, the unemployment rate shot up from a fifty-year low of 3.5 percent to nearly 14.7 percent. A year later, many people are breathing a sigh of relief as the rate has ticked back down to 6 percent, with some taking it as a sign that America is on track to full economic recovery.

But while recent headlines may be cause for optimism, they don't tell the whole story. Using the unemployment rate to gauge the health of an economy is like putting your hand on someone's forehead to check whether they have COVID-19. It can tell you whether they're running a fever,  but it doesn't provide enough data to make an accurate diagnosis.

The truth is, the unemployment rate tells us nothing about the quality of jobs, making it an inadequate metric to understand the true health of the labor market. Gallup's 2020 Great Jobs Report, which Omidyar Network supported in partnership with the Bill & Melinda Gates Foundation and  Lumina Foundation, found that more than half (52 percent) of those who were laid off during the pandemic — even if they were subsequently re-hired — reported a decline in their overall job quality as measured across eleven dimensions, including pay, benefits, stability, and safety.

First commissioned in 2019, the Great Jobs survey was groundbreaking: unlike simple "job satisfaction" metrics aimed at providing an overall sense of job satisfaction, the intent of the survey was to look under the hood of the labor market and identify trouble spots. A diverse group of more than sixty-six hundred working people were asked to define what a "good" job looks like and then assess how their own jobs stacked up against that standard. The original survey showed that less than half (40 percent) of working people in the United States believed they were employed in a good job, while one in six (16 percent) believed they were stuck in a bad job, with significant disparities by race.

The latest survey gives us a window into how the pandemic has impacted job quality. Those who started 2020 in a low-quality or "bad" job — based on their own assessment — were far more likely to have been laid off (36 percent) than those working a high-quality or "good" job pre-pandemic (23 percent). And low-wage workers with high-quality jobs in 2019 reported experiencing much lower COVID-19  risk and better employer-provided protective measures during the pandemic. The fact is, job quality matters, especially when a crisis hits.

Even before COVID struck, the topline numbers masked how unhealthy the U.S. economy really is. The richest 10 percent of Americans control 77 percent of the country's wealth, while for millions of Americans the rising cost of living has skyrocketed, wages have stagnated, and the wealth inequality gap continues to widen. These are not the hallmarks of a healthy economy.

The findings from The Great Jobs Report underscore the mounting evidence that the pandemic exacerbated structural inequities within the U.S. economy. Indeed, job quality in 2020 actually improved for people who avoided being laid off, with many reporting improvements in their compensation, flexibility with respect to where and when they worked, workplace safety, and  a sense of purpose in their work. By contrast, those who experienced being laid off reported lower scores on every dimension of job quality except safety.

But COVID-19 is just the latest driver of worsening job quality in the U.S., with technological disruption leading the list of other threats. While automation may not lead to the mass destruction of jobs — as feared by some — it could lead to deterioration in job quality in many industries and sectors. Meanwhile, the gig economy has made underemployment an acceptable alternative to unemployment. If someone who is laid off starts driving for Uber, they count as employed  — even though it is a more precarious, unstable, and lower-paid kind of work. This also has the effect of skewing the monthly unemployment numbers lower than they otherwise would be. An upskilling and job-matching program won't address these trends; the problem is with the jobs themselves, not the skills of the people in these jobs.

The alarming state of job quality in America reinforces how critical it is to empower working men and women to bargain for a fairer deal and better quality jobs across the dimensions that matter most.

We can create an economy where everyone has a good job. But if we don't start to pay attention to the quality, and not just the quantity, of jobs, we risk creating an economy where major disruptions driven by pandemics or natural disasters, automation, and climate change could lead to continued deterioration in quality of jobs for those who already find themselves in a precarious position. And if we continue to rely on the unemployment rate to tell us what's going on, we risk becoming dangerously out of touch with what's really happening.

We are heartened by the Biden administration's American Jobs Plan and the emphasis it puts on high-quality jobs. But it's going to take a concerted effort across society to detangle the perception that the unemployment rate is the final word on the health of our economy and working Americans. We urge other philanthropists and foundations, experts and economists, advocates, and activists to join the movement to put quality at the center of how we think about jobs and help us find better ways to measure, understand, and fight for quality jobs.

(Photo credit: Christine McCann, San Francisco Foundation)

Tracy_Williams_Omidyar_philantopicTracy Williams is a director at Omidyar Network, where she leads the social change venture's work to reimagine capitalism, build the power of working people, and shape a new economic paradigm.

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