The U.S. Private Sector Job Quality Index

Abstract

The Job Quality Index (JQI) assesses job quality in the United States by measuring desirable higher-wage/higher-hour jobs versus lower-wage/lower-hour jobs. The JQI results also may serve as a proxy for the overall health of the U.S. jobs market, since the index enables month-by-month tracking of the direction and degree of change in high-to-low job composition. By tracking this information, policymakers and financial market participants can be more fully informed of past developments, current trends, and likely future developments in the absence of policy intervention. Economists and international organizations have in recent years developed other, complementary conceptions of job quality such as those addressing the emotional satisfaction employees derive from their jobs. For the purposes of this paper, “job quality” means the weekly dollar-income a job generates for an employee. Payment, after all, is a primary reason why people work: the income generated by a job being necessary to maintain a standard of living, to provide for the essentials of life and, hopefully, to save for retirement, among other things. This paper presents the rationale for development of the JQI, the mathematical properties of the index, the design of its ongoing release and maintenance, the utility of the JQI in understanding related economic phenomena, and the JQI’s application to economic and market forecasting.

Keywords: Economy, Economic Growth, Employment, Jobs, Job Quality, Labor Force Participation, Manufacturing Jobs, Service Jobs, Unemployment,