Study Finds Most New Jobs in ‘87-’89 in High-Paid Fields

Stoking a long-running debate over “good” and “bad” jobs, the Census Bureau said Tuesday that nearly three-fifths of the 6 million jobs created during the last economic expansion were in high-paying industries.

The author of the study suggested in an interview that the findings undercut arguments by labor unions and Democrats that most of the jobs created in 1987-89 were low-skill, low-paying service jobs that would not support a decent living.

“I think the service-producing industries have gotten kind of a bum rap over all these years because there are, indeed, service jobs that pay very well,” Census Bureau economist Paul Ryscavage said.

Some conservative economists praised the study but many liberal economists charged that it was tainted with election-year politics. They said that the Bush Administration had buried data showing low average earnings for workers who took new jobs during the last years of the Ronald Reagan Administration, when George Bush was vice president.

“The report is disingenuous. It doesn’t highlight that nearly half the salaried workers and three-fifths of the hourly workers over 25 years old were earning below the poverty line for a family of four,” said Barry Bluestone, a University of Massachusetts economist. He co-authored a 1986 study for congressional Democrats contending that new jobs were increasingly “bad”--such as hamburger-flipping--rather than “good,” such as aircraft assembly.

AFL-CIO economist Markley Roberts also attacked the census report and an accompanying press release, accusing the Administration of “putting a positive spin on numbers that just ain’t so wonderful.”

On the other hand, Larry Hunter, chief economist of the U.S. Chamber of Commerce, called the study valuable. “It belies the myth that the manufacturing sector is in decline and that all we are doing is creating low-paying hamburger jobs,” he said.

Also, he added, even the report’s finding that a substantial number of newly created jobs were in low-paying service industries is welcome news.

“We still have a fair number of people dropping out of school and entering the unskilled work force,” he said. “Although we’d like to improve that situation, the fact there are a lot of entry-level jobs holds out hope for them.”

The study covered persons who began jobs over a 28-month period in 1987-89. Many moved into more than one job during the period.

The study found that 76% of the jobs people entered were in service industries. A press release stressed that 34% of the total jobs were in “high-paying” service industries, such as finance, insurance and real estate, while 24% were in “high-paying” goods-producing industries, such as manufacturing.

That added up to 58%, nearly three-fifths of the total.

Critics complained that the figures were misleading because many jobs created within those high-paying industries were, in fact, low-paying jobs.

“You have some very high stockbroker incomes in the finance industry but you have a lot more back-office people who are making relatively low pay,” the AFL-CIO’s Roberts said.

Ryscavage said that one of the most significant findings of his study was that men 25 to 54 had similar weekly earnings in the high-paying service and goods-producing industries--$518 vs. $552.

“The service industry number is pretty favorable,” Ryscavage said, “which puts a different perspective on what we have heard before”--that newly created service jobs are overwhelmingly low-paying.

Bluestone said that the census study, rather than painting a positive picture of newly created jobs, confirmed his own research that new jobs generally provide low pay.

The study found that the average pay for those entering new jobs was about $11,300 per year for hourly workers and about $17,500 for salaried workers, he noted, “certainly not a princely sum for anybody . . . in fact, a sad commentary on the jobs that were developed.”