Why are there so many bad jobs? The role of bargaining power and structural change

Since 1979, the share of good jobs in the U.S. economy decreased from 32% to 26%. We argue this has been caused by structural changes—declining union membership and institutional changes in labor markets; deindustrialization; globalization; automation; financialization; and rising market concentration and monopsony power in labor markets—that have depressed workers’ bargaining power, as measured by the cost of job loss. We define a quality job as one that pays above the real median wage for men in 1979, and provides employer-sponsored health insurance and pension benefits. Using Census Bureau data, we observe a decline in job quality across our 1979–2022 sample period. Our regression analysis suggests that changes in workers bargaining power and labor market policy, proxied by the real minimum wage, explain this dynamic.