Fact of the Week: 72 Percent of Jobs Created in the U.S. from 2010 to 2016 Were Below Average in Both Compensation and Productivity

Nearly three-quarters of jobs created in the U.S. from 2010 to 2016 were below average in both compensation and productivity.

Source: Organization for Economic Cooperation and Development (OECD), Compendium of Productivity Indicators 2018 (Paris: OECD, 2008), Table 1.4.

Commentary: Emerging technologies promise to bring about a new production revolution that will increase welfare throughout society. This revolution is expected to have the largest impact on low-productivity jobs, which is promising because it could increase the proportion of high-paying and high-productivity jobs. But it also threatens a larger disruption to society, as lower-skill workers have more difficulties changing industries. That’s why it is especially troubling to see that the majority of U.S. jobs created in recent years have been low-productivity, low-paying positions. Of the 2.5 million jobs added to the U.S. economy from 2010 to 2016, 72 percent were below average in compensation and productivity, while an additional 14 percent of jobs were below average in one of the two categories.

While this trend holds across the developed world, it is especially pronounced in the U.S., where 80 percent of new jobs are low-productivity, compared to 77 percent in the U.K., 71 percent in Canada, and 69 percent in France and Germany. Promoting high rates of employment is important, but it is also critical to pay attention to the kinds of jobs that are being created and the skills that workers are acquiring. The alternative is leaving countless Americans unable to find jobs and fearful of future innovation.