A new Hamilton Project data interactive, “Chronic Absence: School and Community Factors,” examines the factors that affect learning at local elementary, middle, and high schools across the United States.
A new Hamilton Project data interactive, “Chronic Absence: School and Community Factors,” examines the factors that affect learning at local elementary, middle, and high schools across the United States.
Immigrant workers are 39 percent less likely to work in office and administrative support positions and 31 percent less likely to work in management, while being 113 percent more likely to work in construction. However, these gaps tend to diminish across generations. There are almost no appreciable differences in occupations between the children of immigrants and children of natives.
In 2017 foreign-born prime-age (25–54) men worked at a rate 3.4 percentage points higher than native-born prime-age men, while foreign-born prime-age women worked at a rate 11.4 percentage points lower than native-born prime-age women. For undocumented immigrants, this divergence between male and female employment is even more pronounced.
There is broad agreement among researchers and analysts that immigration raises total economic output. By increasing the number of workers in the labor force, immigrants enhance the productive capacity of the U.S. economy.
The consensus of the empirical literature is that low-skilled immigration does not depress wages for low-skilled natives to any substantial extent.
This interactive feature allows users to see the distribution of annual earnings across the United States for a given occupation and age group, adjusting for cost of living and taxes. Users can compare wages by metropolitan and nonmetropolitan area, or by state.
Many firms have at least some wage-setting power derived from the willingness of their employees to accept lower wages than they could earn elsewhere. Economists attempt to quantify this employee willingness to accept lower wages in terms of the so-called labor supply elasticity. That is, what percent lower employment would a firm expect if it offered 1 percent lower wages? In general, firms face relatively inelastic labor supply.
There is substantial variation in employer concentration across the country: for example, parts of the Northeast and Southern California have HHI—a measure of business concentration—below 1,500, while numerous rural areas in the Great Plains have HHI above 5,000, indicating extreme concentration.
In 1987 both relatively young firms (age 0 to 10) and small firms (with 49 or fewer employees) accounted for roughly a third of total employment, but by 2014 this share had dropped to 19.0 percent for relatively young firms and 27.2 percent for small firms. While young and small firms have both dwindled in labor market importance, the position of young firms has deteriorated more rapidly.
This chart examines trends in entrepreneurship—defined here as self-employment with at least 10 employees—by the educational attainment of entrepreneurs. For people with more than a high school diploma, entrepreneurship is a less common vocation than it was 25 years ago. The decline is especially pronounced among those with advanced degrees: in 1992 4.0 percent of 25- to 54-year-olds with an advanced degree (beyond a bachelor’s) were entrepreneurs. By 2017 this rate had fallen to 2.2 percent.
More than a fifth of all employees hold licenses, but the fraction varies considerably across professions. Health-care practitioners and legal workers are the most likely to be licensed, with 73 and 61 percent of workers licensed, respectively. Additionally, licensed workers—who generally must pay to be relicensed after an interstate move—are much less likely to move across state lines than are comparable workers without licenses, but only slightly less likely to move within their state.
By comparison with the previous three business cycles, inflation-adjusted wage growth since 2007 has been relatively strong. It is slightly ahead of the growth seen during the 1990s or 2000s business cycles and is notably higher than growth in the 1980s.
Diminished dynamism can impede the reallocation of resources to high productivity firms; recent research indicates that the decline in dynamism in the tech sector occurred at the same time as the decline in productivity growth. This lower productivity growth in turn restrains wage growth.
In recent decades American workers have become less likely to move to new places and to new jobs. At the same time, workers are switching jobs less frequently and staying longer at the jobs they have. Diminished worker mobility might have an important negative impact on workers’ wage growth.
Although the increased demand for educated workers explains much of the rise in wages for workers in the upper part of the wage distribution, other factors account for wage stagnation among lower-income workers as well as the broader decline in the labor share of income. One such factor is the decline in union membership.
White women have seen a wage increase of 34 percent, while black and Hispanic women have both experienced growth at around 17 percent. Women’s wage levels remain below those of men, but the gender wage gap has narrowed over time.
Globalization has conferred a number of benefits for workers. Trade has lowered consumer prices, helping increase real wages; moreover, exports can be an important source of productivity and wage growth. However, U.S. imports are more likely than U.S. exports to be produced by low-skilled workers, suggesting that trade may put downward pressure on wage growth for low-skilled American workers.
The wage benefit to a college degree increased remarkably during the last two decades of the 20th century, leveling off around 2000 at a historically high level, as demonstrated by the figure on the left. These changes in college attainment and the college wage premium reflect an evolving mix of individuals attaining college degrees as well as shifts in the relative demand for high-skilled labor.
Wage inequality has been on the rise over the past several decades. Much of the growth in wages has been concentrated at the top, with wages in the top quintile growing from $38 per hour in 1979 to $48 per hour in 2016—a 27 percent increase.
Long-term wage stagnation can be traced to many trends, including the decline in labor’s share of income. Over the past few years the U.S. labor share has ceased falling, but this might reflect the ongoing economic recovery rather than any change in the long-run downward trend.
During the Great Recession workers with wages in the bottom three income quintiles—60 percent of all workers—experienced limited or no growth in their wages. For the top-earning 40 percent of workers, wages increased by more than 1 percent over the same period. Since 2010, however, wage growth has accelerated for all workers, and particularly for the lowest-paid workers.
Measured wage growth reflects changes in wages for continuously employed workers as well as changes in the composition of the workforce. That latter component of wage growth evolves as workers of varying wage levels enter and exit employment. This figure displays the drag on median weekly earnings growth from the changing composition of the full-time workforce.
Given the importance of labor productivity growth for facilitating wage growth, the slowdown in productivity growth in the United States has likely had negative effects on workers. These figures show real productivity growth, inflation, and nominal wage growth for the periods 1981–2007 and 2008–17, and also investment growth over these periods.
While in the long run real wage growth depends on productivity and the distribution of gains from productivity, over shorter time horizons wage growth can be determined by the supply and demand for labor. When there is extensive slack in the economy—such as during a recession or the early phase of a recovery, when labor and capital are underutilized—wage growth can be temporarily lower. At these times, there are more unemployed workers and hiring demand is low, both of which put downward pressure on wages.
This figure shows that nominal annual wage growth has been just 2.4 percent since the start of the Great Recession, contrasting with nominal wage growth above 3.0 percent in each of the previous business cycles. Typically, nominal wage growth rises later in expansions and falls during recessions, while real wage growth may jump up or down with variation in inflation. But the most recent expansion has seen little uptick in nominal wage growth, especially in contrast to the previous three expansions.
Each month, The Hamilton Project has examined the “jobs gap,” which is the number of jobs that the U.S. economy needed to create in order to return to pre-recession employment levels while also absorbing the people who entered the potential labor force each month. The jobs gap closed in July 2017.
In this interactive, The Hamilton Project explores how college majors and occupations interact to produce a wide range of labor market outcomes. By separately examining men and women of various ages who graduate with particular college majors, labor market returns to college can be better understood.
Beginning February 2016, The Hamilton Project introduces an additional methodology to calculate the jobs gap. Specifically, we add a new jobs gap measure that calculates the number of jobs needed to reach the pre-recession unemployment rate after allowing for demographic shifts and changes in labor force participation, which has been gradually falling for more than a decade.
Over the period 1990 to 2013, the real earnings of individuals with lower levels of education have tended to decline, while they have risen for those with at least a bachelor’s degree.
There has been tremendous focus in recent years on the plight of the typical American worker. In this interactive chart, users can explore eight profiles by comparing employment, occupation, and earnings patterns between 1990-2013.
A full-time secondary earner in a low- or middle-income family takes home less than 50 percent of his or her earnings.
A substantial share of American workers must obtain a license from a state or local government to work in their professions. The share of workers nationwide required to have a license has risen dramatically since the 1950s, from just 5 percent to nearly 30 percent in 2008. This chart shows the share of the workforce that is licensed in every state based on estimates from a Harris poll conducted in the first half of 2013.
Each month, The Hamilton Project calculates America’s “jobs gap,” or the number of jobs that the U.S. economy needs to create in order to return to pre-recession employment levels while accounting for changes in the population. In this chart, The Hamilton Project applies the same jobs gap methodology to earlier recessions in 1981–82, 1990–91, 2001, and 2007–09.
Using major-specific earnings data from the U.S. Census Bureau’s American Community Survey, The Hamilton Project has created a student loan repayment calculator that shows the share of earnings necessary to service traditional loan repayment for 80 majors.
Graduates of majors with initially low earnings experience faster earnings growth during the early-career years.
Compare the annual median earnings from career start to retirement for 80 majors.
The U.S. minimum wage now stands at 38 percent of the median wage, the third-lowest among OECD countries.
This chart presents the schedule for the Earned Income Tax Credit (EITC) for tax year 2014 and possible adjustments to maximize the impact.
This state-by-state map highlights the ratio of median out-of-pocket child-care costs to median earnings of single mothers with children under age five.
The United States does not currently invest heavily in vocational training compared with other countries, and funding for vocational training has declined over the past decades. The United States spends less than 0.05 percent of its gross domestic product on vocational training opportunities for workers.
This chart shows the share of workers earning equal to or less than 150 percent of the minimum wage in every state in 2012. By hovering over a state, you can also see the minimum wage in 2012 in each state.
Why is the job-finding rate so low? The basic reason is that job openings remain depressed and there are a lot of unemployed workers competing for those jobs. The number of job openings fell by more than 40 percent between 2007 and 2009 and is almost 15 percent lower between 2007 and 2013.
It has always been harder to find work the longer you are unemployed, but the situation facing today’s workers is exceptional. No matter how long a worker has been unemployed, the odds that they find a job are far lower than before the Great Recession. Figure 1 shows the likelihood of finding a job as measured in the monthly Current Population Survey data.
Household composition of families in the struggling lower-middle class varies substantially from the household composition of families in poverty. The composition of the struggling lower-middle class—defined here as working-age families with children under age eighteen whose income places them between 100 and 250 percent of the FPL—is markedly different from families in poverty in terms of marriage and presence of earners.
This figure displays the percentage of income generated by the addition of a secondary earner’s income that a family takes home after accounting for payroll and federal income taxes, SNAP benefits, and the cost of child care.
More than half of America’s working-age families with children under age eighteen (approximately 20.1 million families) have annual incomes of $60,000 or below. This is true whether we consider only earned wages and salary, or if we use a broader definition of pretax, pretransfer income, which also includes some unearned sources of income, such as investment income and alimony payments.
While social mobility and economic opportunity are important aspects of the American ethos, the data suggest they are more myth than reality. In fact, a child’s family income plays a dominant role in determining his or her future income, and those who start out poor are likely to remain poor. This figure shows the chances that a child’s future earnings will place him in the lowest the or the highest quintile depending on where his parents fell in the distribution (from left to right on the figure, the lowest, middle, and highest quintiles).
While the private sector has added jobs to the economy in every month since March 2010, a total increase of approximately 6.8 million jobs through April 2013, the public sector has contracted. This figure shows the ratio of government employment to the civilian non-institutional population going back to 1980. For the twenty years prior to the Great Recession, this ratio stayed relatively constant, but since then it has dropped precipitously (except for the temporary uptick in 2010 when government employment rose to accommodate demand for U.S. Census workers).
Many workers can benefit substantially from worker training programs, which provide education and skill development that lead to increased economic opportunities and better jobs. Students who earn two-year degrees in a high-return field, four-year degrees after a two-year degree, or certain career-oriented certificates, earn median salaries of $34,000 or more per year. Students who earn two-year degrees in low-return fields or who do not complete their programs earn around 33 percent less.
The announcement by the Federal Reserve Board that it will not increase the interest rate until the unemployment rate falls below 6.5 percent raises the question of when we will reach this unemployment level. If the job-creation rate holds at last year’s pace, we will reach the Fed’s benchmark in about two and a half years.
Millions of Americans lost their jobs during the recession, and even though the economy has been recovering for several years, it is still more difficult for unemployed individuals to find a job now than it was before the recession. One way to observe this is to measure how many unemployed Americans there are per job opening. As this graph shows, although we have come down from the height of the recession—when there were more than six unemployed people per job opening—we still have not reached pre-recession employment levels.
College education has historically driven increases in labor productivity, which in turn lead to wage growth. This same trend has emerged during the last 40 years. As women’s college-graduation rates jumped over 20 percentage points since 1970 , female workers’ wages increased by similarly high rates.
Despite widespread claims that a college degree is no longer worth the rising price of tuition, a bachelor’s degree still has about the same return on investment today as it did in the 80s. College still pays for itself, and then some; it will earn you, on average, a 16 percent return, which is a higher rate of return than on investments in the stock market (6.8 percent), corporate bonds (2.9 percent), gold (2.3 percent), long-term government bonds (2.2 percent), or housing (0.4 percent).
This chart uses the economic evidence from twenty-three published studies cited in Chetty (2011) to illustrate how a 10 percent cut in individual income tax rates might increase the pretax earnings of the typical tax-paying family earning about $70,000 per year.
It is critical that worker training programs be rigorously evaluated so that scare training resources can be targeted toward the most effective programs.
Federal spending on job training programs by the U.S. Department of Labor has gradually fallen since the 1980s, aside from a bump in 2009 from the American Recovery and Reinvestment Act.
Retraining in technical fields provides higher returns for workers than retraining in non-technical classes.
Recent research suggests that hardship for dislocated workers extends beyond periods of unemployment. Once reemployed, workers typically earn significantly less than they did prior to job loss.
Over the last 35 years, the opportunity gap for children whose parents are at different ends of the earnings distribution has grown. Children at the 90th percentile of the distribution of family earnings have experienced a 45 percent increase, while children at the 25th percentile have experienced a decline of over 20 percent.
While all states have lost jobs during the Great Recession, these losses have not been equally shared across the nation.
Median wages for the American family have increased over the last twenty-five years, but these incresase are largely due to additional hours worked.
Despite continued debate over the value of a college education, data shows that higher education has a much higher rate of return than any other investment.
In today’s economy, those young adults with a college degree are more likely to be employed and earn higher wages than their peers with a high school diploma only or less.
Earnings have declined nearly 28 percent for the median American male worker since 1969.
In addition to the 14 million Americans officially counted as unemployed, there are over 11 million American workers who are underutilized, underemployed, or have given up seeking work.
In the aftermath of the Great Recession, the employment-to-population ratio remains 6 percentage points lower and income per person is largely unchanged from the beginning of the decade.
Employment of men with only high school diplomas has fallen considerably in recent years, especially when compared to employment of men with a college degree.
Today's out-of-work Americans are experiencing longer spells of unemployment than in any recent recession. In October 2010, half of all unemployed workers had been unemployed for more than 21 weeks.
Employment gaps created during the 1980-1982 recessions still remain today.
The hardest hit counties in the 1980-1982 recessions differed dramatically from the hardest hit counties in the Great Recession from 2007-2009.
The hardest hit counties during the 1980-1982 recessions experienced sharper per-capita income declines during the recessions, as well as slower growth following the national recovery.
In communities with large numbers of displaced workers, more-educated workers are more likely to move to a new city of country in search of employment than less-educated workers.
America is issuing a declining number of visas for high-skill workers.
Immigration may have a modest positive effect on the average wage of U.S.-born workers.
Workers ages 16-24 experienced the most drastic drop in employment during the Great Recession of 2007-2009.
The fall in employment from the 2007-2009 Great Recession is the most severe fall during a recession since World War II.
In the past 40 years, as the pace of innovation has slowed, American workers have experienced lower growth rates of productivity and compensation.
Over the past three decades, the wages of college graduates — both men and women — have increased significantly more than the wages of less educated workers.
Over the past 30 years, employment has increased in low-skill and high-skill occupations while at the same time stagnating or decreasing in middle-skill occupations.
This figure from the 2010 Hamilton Project strategy paper "From Recession to Recovery to Renewal" illustrates changes in the male and female nonemployment to population ratio between 1945 and 2010.
Between 1975 and 2008, income inequality in the United States has risen, with households in the 95th percentile of income making disproportionate gains.