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Can low-wage workers find better jobs?

Todd Gabe, Jaison Abel () and Richard Florida
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Richard Florida: University of Toronto

No 846, Staff Reports from Federal Reserve Bank of New York

Abstract: There is growing concern over rising economic inequality, the decline of the middle class, and a polarization of the U.S. workforce. This study examines the extent to which low-wage workers in the United States transition to better jobs, and explores the factors associated with such a move up the job ladder. Using data covering the expansion following the Great Recession (2011-17) and focusing on short-term labor market transitions, we find that around 70 percent of low-wage workers stayed in the same job, 11 percent exited the labor force, 7 percent became unemployed, and 6 percent switched to a different low-wage job. Troublingly, just slightly more than 5 percent of low-wage workers found a better job within a 12-month period. Study results point to the importance of educational attainment in helping low-wage workers move up the job ladder.

Keywords: low-wage jobs; career ladder; labor market dynamics (search for similar items in EconPapers)
JEL-codes: J01 J24 J61 J62 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-lab
Date: 2018-04-01
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