Moving Up or Moving On

"When is low-wage work a permanent trap and when is it the bottom rung on a ladder leading to better jobs? Most research on this fundamental question has focused on the characteristics of the workers themselves. This important and pioneering book shows that the strategies and practices of employers and labor-market intermediaries are key factors in determining the outcome for workers. There are novel lessons for public policy here, and we need to know about them. This is the place to find out."
-ROBERT SOLOW, professor emeritus of economics at MIT

"This superb study employs a massive new data set created by the Census Bureau to provide the best answers to date on one of the most important issues of domestic policy-how to help low- wage workers increase their wages and earnings. Reading Moving Up or Moving On is a must for anyone who wants to understand the low-wage labor market or help the workers stuck in it."
-RON HASKINS, senior fellow in economic studies, Brookings Institution

"Armed with information on the characteristics of millions of workers and the firms that employ them, Fredrik Andersson, Harry Holzer, and Julia Lane find that the likelihood of escaping from low earnings is better in some sectors, such as government, and worse in others, such as retail trade. While there is considerable mobility out of low earnings status, most of these workers consistently earn less than $15,000 per year. Moving Up or Moving On will be of great interest to labor economists and to those working to encourage employers to provide better job ladders for low-paid workers."
-SHELDON DANZIGER, Henry J. Meyer Collegiate Professor of Public Policy, University of Michigan

"In a remarkably short period of time, the welfare and employment status of low-income women has been transformed. Welfare rolls are down by half, and employment rates among low-income women have reached all time highs. With so many low-income women having traded a welfare check for a paycheck, the central challenge facing American policymakers is how to help the swelling numbers of the working poor to secure their precarious foothold in the labor market and move up to better jobs. Creatively employing a wonderfully rich new data set, Moving Up or Moving On sums up what we know about this critical issue to date, and then advances our understanding by leaps and bounds, telling us who gets ahead and who doesn't, and how and why they do so-from landing a job with the right employer to obtaining skills, and from using temporary employment agencies as a stepping stone to better jobs to strategic job changing. It is must reading for policymakers, employment counselors, human resources professionals, and employers large and small."
-GORDON L. BERLIN, president, MDRC

For over a decade, policy makers have emphasized work as the best means to escape poverty. However, millions of working Americans still fall below the poverty line. Though many of these “working poor” remain mired in poverty for long periods, some eventually climb their way up the earnings ladder. These success stories show that the low wage labor market is not necessarily a dead end, but little research to date has focused on how these upwardly mobile workers get ahead. In Moving Up or Moving On, Fredrik Andersson, Harry Holzer, and Julia Lane examine the characteristics of both employees and employers that lead to positive outcomes for workers.

Using new Census data, Moving Up or Moving On follows a group of low earners over a nine-year period to analyze the behaviors and characteristics of individuals and employers that lead workers to successful career outcomes. The authors find that, in general, workers who “moved on” to different employers fared better than those who tried to “move up” within the same firm. While changing employers meant losing valuable job tenure and spending more time out of work than those who stayed put, workers who left their jobs in search of better opportunity elsewhere ended up with significantly higher earnings in the long term—in large part because they were able to find employers that paid better wages and offered more possibilities for promotion. Yet moving on to better jobs is difficult for many of the working poor because they lack access to good-paying firms. Andersson, Holzer, and Lane demonstrate that low-wage workers tend to live far from good paying employers, making an improved transportation infrastructure a vital component of any public policy to improve job prospects for the poor. Labor market intermediaries can also help improve access to good employers. The authors find that one such intermediary, temporary help agencies, improved long-term outcomes for low-wage earners by giving them exposure to better-paying firms and therefore the opportunity to obtain better jobs. Taken together, these findings suggest that public policy can best serve the working poor by expanding their access to good employers, assisting them with job training and placement, and helping them to prepare for careers that combine both mobility and job retention strategies.

Moving Up or Moving On offers a compelling argument about how low-wage workers can achieve upward mobility, and how public policy can facilitate the process. Clearly written and based on an abundance of new data, this book provides concrete, practical answers to the large questions surrounding the low-wage labor market.

FREDRIK ANDERSSON is senior research fellow at Cornell University.

HARRY J. HOLZER is professor of public policy at Georgetown University and a visiting fellow at the Urban Institute.

JULIA I. LANE is director of the Employment Dynamics Program at the Urban Institute.