Post-1979 American Employment Performance in International Perspective

Jointly funded with the Washington Center for Equitable Growth

The relationship between national economic growth and the incomes of the vast majority of American households showed a profound U-turn around 1980. The conventional assumption that growth will be proportionately shared with all households was a reasonably good approximation for the 1940s-70s. But around 1980, a steadily expanding gap began to develop between productivity growth and worker compensation. For example, between 1980 and 2007 cumulative manufacturing productivity rose by about 230 percent but manufacturing production worker compensation increased by just 4 percent. However, other rich countries did better: production worker compensation rose by 41-55 percent for German, French, British, and Swedish workers. Why did the U.S. experience such a striking and sudden shift from shared to unshared growth around 1980?

Economist David Howell will use of national household survey data, including the U.S. Current Population Survey, to explore the relationship between economic growth and both the generation of decent jobs (those not characterized by very low pay or inadequate hours) and the growth in real pay for decent jobs for the U.S., the U.K., Canada, Germany and France. The study aims to produce comprehensive evidence of distribution and growth of decent jobs across the large nations of the rich world by economic sector, occupation, and demographic group.