Can Low-Wage Workers Find Better Jobs? - FEDERAL RESERVE BANK of NEW YORK

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Staff Reports

Can Low-Wage Workers Find Better Jobs?

Number 846
April 2018

JEL classification: J01, J24, J61, J62

Authors: Todd Gabe, Jaison R. Abel, and Richard Florida

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.

Available only in PDF

Author Disclosure Statement(s)

Jaison R. Abel
The author declares that he has no relevant or material financial interests that relate to the research described in this paper.

Richard Florida
The author declares that he has no relevant or material financial interests that relate to the research described in this paper.

Todd Gabe
The author declares that he has no relevant or material financial interests that relate to the research described in this paper.

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