New Project Looks to Build Consensus on State of American Worker

Few topics are more hotly debated than the state of the American worker, prompting the Economic Innovation Group to launch a new project aimed at establishing a new consensus on how the American worker is doing and what policies might help the U.S. economy achieve its full potential. The American Worker Project includes a new study on the state of the American worker as well as guest essays from an array of bipartisan voices, including New York Times columnist Paul Krugman and Michael Strain, the director of Economic Policy Studies at the American Enterprise Institute. Spotlight spoke recently with Ben Glasner, one of the authors of the American Worker report, about the study and the overall project. The transcript has been lightly edited for length and clarity.

How did the American Worker Project come about?

One of the initial motivations was there’s a good deal of discourse around the state of American workers today, and we often hear two different types of comparisons. One is how it compares today versus the past and the other is what it might look like if policies changed, or different things happened. What we wanted to do was get to a state where we could say, all right, what is our current standing relative to the past? Let’s clear up that component of the comparison so we can then focus on how do we get the American workers today to the best level that we can. What are the decisions that get us to that stage? That was the notion behind framing it as working towards a new consensus—if we can get to a stage where we all agree on what the facts are today versus the past, we can then reorient the dialogue about how we make things better than they are right now.

So, where are we now as compared to the past?

I think we’ve made the clear case that things are better today than they were for the typical American worker. We’ve used different measures across wages and compensation to characteristics of work, such as hours worked versus the gig economy. We cut across as many things as we could find good data on in the relatively recent period. And I think the broad conclusion is that the American worker today is doing better than they were in the past. And that’s just across a wide range of methods. That’s not to say there aren’t distributional aspects where there are still people struggling; there were still people struggling back then as well. It’s just across the board we think that the average typical worker is doing better.

And does that match the perception of the average American worker at this point?

I think it depends a lot on who you ask. What we found in our survey data that we analyzed across multiple sources is that most of the people who are working today are largely satisfied with their jobs and feel relatively secure. They’re pretty happy with the general state of what work is for them. But the consensus among those making commentary about work tends to actually be a little bit more negatively framed. So, I think what we found wasn’t so much that people believe jobs are bad now, so much as people seem to have a sense that the market labor market is worse than it was in the past. But the actual data doesn’t seem to make that case.

And is there any particular statistic you would use to illustrate that or, or a couple?

We pulled some work-related data from the General Social Survey on how satisfied people are with the work that they do. We found that workers who were satisfied or very satisfied make up roughly 90% of the workers who responded to it. And that type of result was also mirrored on Gallup surveys that also found just under 90% of workers say they’re satisfied with how secure their job. And that’s been a relatively stable component—we found that, broadly, the amount of satisfaction with job security and type of work was relatively stable over the last 30 or 40 years.

Those numbers seem so much higher than the public perception.

Yes. And I think that part of that is the degree to which we focus quite a bit on negative shocks. We are always attuned to when layoffs are occurring, when job turnover is happening, when people are struggling in the economy. And that’s not a bad thing to think about. We do want to care about what’s happening to those workers who might be hitting hard times. But the degree to which that becomes a pervasive mentality in our commentary about the labor market is something we should be thinking about. We want to care about those people who are struggling. We want to find ways to make them better and support them, but we shouldn’t allow those situations to then describe the entire discourse about work. We want to make sure that we’re solving and supporting those people, but not treating everyone as being constantly at risk of being laid off.

You also found that things are not improving as fast as they could be?

Absolutely. One of the things that we point to isn’t just that things are better today than they were, but that they’re getting better at a slower rate than in the past. We wanted to emphasize that a lot of the rapid growth we saw in the post-war period between 1950 and the 1970 was a result of rapid increases in productivity, big wage gains, or the large entry of women into the workforce. What we see today is a slower rate of productivity growth. We see less churn and there’s a little bit of concern about the dynamism of the economy as a whole. So, we want to think about what are the factors and what are the knobs that we can maybe turn a little bit to then boost the productivity gains of today, increase the growth for wages across the board, and make real improvements to the labor market at a rate similar to what we saw in the past.

And what are some of the recommendations that you’ve come up with?

We outline a couple of spaces where we think that some improvements can increase productivity growth faster. We talk a little bit about the individual level in the labor market and things that might be restricting movement of high-skilled workers or more productive workers between firms. That means reducing things like non-competes, which is obviously a hot topic in the labor market today. We also want to think about things that might be holding back the real wage growth of workers, which are things like high costs of housing. We can see a world where maybe wages are increasing, but if we don’t have a good sense for how to make living affordable for people or how to keep runaway costs under control, then those gains in wages start getting eaten away and that leads to dissatisfaction or stagnancy in the real wages.

Another thing that we think is a great lesson from recent years is the fact that persistently tight labor markets are a huge boon to workers across the distribution and particularly towards low-wage workers. We saw good work coming out of the pandemic that demonstrated that tight labor markets led to compression of the wage gap between workers at the 10 percentile and 90th percentile. If we can start pursuing policies that help stabilize a tight labor market in a sustainable way, that can help boost workers, both in participation in the labor force and their earnings.

Did you look at the potential impact of AI?

We didn’t in our specific report. There’s been some interesting work on that front, but broadly it’s falling into kind of a mixed bag of what we think AI adoption could look like. There’s been some work that’s demonstrated a belief that some of the white-collar workers are a little bit more at risk of AI impacting their jobs. But at the same time, there’s also been some research demonstrating that AI can help boost the capacity of different resumes and improve the odds of potentially lower skill or non-English first language workers of being able to get into the market. AI might offer upskilling potential, and it might also offer some negative employment effects depending on who’s at risk for AI adoption. There’s a lot of uncertainty around what the effects might be, but there’s good reason to be hopeful as well.

And what about a green economy conversion and how might that play into these trends?

As we look towards something like the green economy conversion, you might think that would bring more jobs, more industrial capacity and long-term benefits that are positive for the American worker. But we want to think really intently about what those tag-along effects look like and be sure those policies are going to pay dividends over time for American workers.

And does the report look at changes in safety net social policies that that might be beneficial in this area, whether that’s increased support for child care or the Expanded Child Tax Credit.

That’s not a big focus in this report, but we touch on it to a degree. We talk a little about things like paid family leave and paid sick leave, with the hope being that a more generous social safety net or a safety net that’s better targeted towards supporting workers or at-risk workers will help boost long run effectiveness. And there’s been a good amount of work demonstrating that when you help someone out towards the bottom of distribution in those types of crises, you can pay dividends in the long run if they become more stable and are better able to engage in the labor force broadly.

In addition to the study, I see that you have an array of essays on the site from some really interesting people. Is that a process that’s going to be continuing?

We’ve got quite a few guest essays out already and a few more still in the pipeline. And one of the things that we found very valuable about this project is that it opened the door for us to engage with a broader group of thinkers around this area. This is really a consensus building project. We want people to be able to come together and converse on what are the things we agree on, what can we demonstrate with the data and what can we learn from it?

Is there anything you’d like to add?

There is tons of great stuff in the actual study. One thing that I think is really worth highlighting is the changing look of who the American worker is today. American workers are becoming better educated than they were in the past. It’s a more diverse market with more women and Black, Hispanic, and Asian workers in the labor force. We want to think about how the changing nature of our country is reflected in who’s working where and what that tells us about what the labor market’s going to look like in the long run.