The U.S. Private Sector Job Quality Index (JQI) November 2020
NEW YORK (PRWEB) December 04, 2020
Following the release of the Employment Situation Report for November 2020 by the U.S. Bureau of Labor Statistics (BLS), the U.S. Private Sector Job Quality Index (JQI) has been revised to a level of 82.17, down by 0.94% from its revised level one month earlier and reflecting a higher proportion - relative to the prior month - of U.S. production and non-supervisory (P&NS) jobs paying less than the mean weekly income of all P&NS jobs ("Low Quality Jobs"), relative to those jobs paying above such mean. The JQI remains heavily impacted by the extraordinary disruption in the number and composition of private sector production and non-supervisory jobs since the beginning of the U.S. impact of the COVID19 global pandemic, with regard to which the following additional special factors should be noted:
the BLS Employment Situation Report for November reflects a substantial decline in the pace of restoration of private sector payrolls, relative to prior months, likely a combined result of virus surges, colder weather and the elimination of pretty much all benefits to job creation arising from the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), including the Payroll Protection Program (PPP) and the federal unemployment insurance benefit supplement.
As many – but not all – of the millions of workers in Low Quality jobs who were laid off during the peak crisis months have returned to their jobs, the JQI will slowly revert back to its pre-pandemic, lower levels to the extent that those lower quality jobs continue to re-emerge; and
the JQI may rise or fall for a period of time to the extent that such large numbers of Low Quality Jobs have been substantially eliminated or restored (temporarily or otherwise), as offset by the significantly higher benchmark mean weekly income used in computing the index since the elimination of large numbers of Low Quality Jobs.
The mean weekly wage income of all P&NS jobs as of the current reading (which reflects the level as of October 2020) increased to $845.26, a change of 0.32% from its revised level the month prior. This reflects the continued absence (as a result of the pandemic) of the low-wage/low-hours positions that had grown substantially in number over the course of the past four years. But the JQ-Instant™ preliminary read of the 344,000 gain in all private sector, non-farm payrolls for November 2020 shows that 100% of the gains in private sector jobs were in industry sectors offering P&NS jobs with an average weekly income below the mean weekly income of all P&NS jobs (i.e. "Low Quality Jobs"). This reading was due to a combination of increased job formation in traditional Low Quality Job sectors, plus the dramatic increase in the average weekly income for all P&NS jobs resulting from the elimination of millions of Low Quality Jobs during the COVID19 crisis, causing several marginal sectors to fall below the new average. This distortion will ultimately sort itself out in 2021.
Daniel Alpert, co-creator of the U.S. Private Sector Job Quality Index, said, "As many – but not all – of the millions of workers in Low Quality jobs who were laid off during the peak crisis months have returned to their jobs, the JQI will slowly revert back to its pre-pandemic, lower levels to the extent that those lower quality jobs continue to re-emerge."
This news release presents data from the most recent JQI reading calculated through the month immediately prior to the month covered by this release. The JQI assesses job quality in the United States by measuring desirable higher-wage/higher-hour jobs versus lower-wage/lower-hour jobs. The JQI offers a near-real time analytical tool to policymakers, researchers and financial market participants with relevance to a variety of trends in the economy at large. The JQI analyzes a representative sample of the economy using production and non-supervisory job (P&NS) data from 180 different industry groups spanning across all 20 super-sectors into which the BLS groups establishments. The principal data utilized is contained in the Current Employment Survey (CES, also often referred to as the establishment survey) P&NS data on average weekly hours, average hourly wage and total employment for each given industry group (seasonally adjusted, in all cases). The JQI is updated on a monthly basis contemporaneously with the release of new CES data from the BLS.
The JQ-Instant reading is for the month covered by this release and has implications for the likely direction of the JQI itself in future months. As the JQI is reported as a three-month rolling average of actual monthly readings, significant imbalances (readings varying from an even distribution between high and low quality jobs) in the JQ-Instant results would suggest future JQI readings moving in the direction of the dominant side of such distribution.
The U.S. Private Sector Job Quality Index (patent pending) is a joint development of the Program on the Law and Regulation of Financial Institutions and Markets at the Jack G. Clarke Institute of Cornell Law School, the University of Missouri Kansas City Department of Economics, the Coalition for a Prosperous America, and the Global Institute for Sustainable Prosperity.