The working class needs quality jobs—and regional leaders need to define what those are

“Through their votes, working-class voters expressed that they’re feeling pain,” wrote our colleagues in a post-election analysis. “Americans need and want a policy agenda that uplifts people of all races who have been denied opportunities to gain economic security to advance their well-being.” Indeed, while national unemployment rates have been at historic lows, a growing body of evidence has created a sense of urgency around the “hollowing” of the labor market. This declining share of employment in middle-wage occupations is the result of outsourcing jobs overseas, increasing automation, declining unionization, and corporate strategy.  

As the labor market has hollowed out, a growing share of the working class—largely defined as workers without a four-year degree—have been pushed into lower-wage jobs. Moreover, people are increasingly stuck in those low-wage jobs: There are fewer and fewer stepping stones between low-wage and high-wage jobs. The result is that in 57% of U.S. metro areas, less than half of workers with a two-year degree earn a good wage, as we define it below. 

The latest data reveal persistent declines in the share of jobs that are middle wage, yet this trend has been partially obscured by the unexpected and significant boost in pay for low-wage workers post-pandemic. This is good news, but should not distract from the need to create more middle-wage jobs. Regional leaders should not mistake rising wages among the typical low-wage job (from $15 to $20 per hour, for example) as a sign that their economies are creating more middle-wage jobs (which pay around $25 per hour).  

Fortunately, over the past five years, regional and national economic development leaders have been shifting their attention toward job quality rather than just job creation. The Department of Commerce and Department of Labor have outlined a set of “Good Jobs Principles,” which Commerce officials have used as part of selection criteria for billions of dollars of industrial policy investments through the CHIPS and Science Act, American Rescue Plan Act, and Infrastructure Investment and Jobs Act. National nonprofit organizations such as Jobs for the Future, the Aspen Institute, Gallup, and JUST Capital have also created job quality frameworks that are widely cited in regional economic and workforce development settings.  

Yet despite growing momentum behind the idea that quality jobs should be a central aim of economic and workforce development, there remains remarkably little consensus on what exactly a “quality job” is in quantitatively measurable terms. Few regional economic and workforce development leaders could point to where in their economy quality jobs exist, or describe whether those jobs are growing or diversifying. (Importantly, there is a big difference between industries that offer good median wages and industries with lots of quality jobs; the median wage would be “good” in an industry in which 49% of workers earned $15 per hour, 49% earned $75, and 2% earned $45.) Without a measurable definition, the emerging consensus that quality jobs matter won’t translate into the work that matters: making precise and coordinated economic and workforce development investments in the shrinking group of occupations and industries that offer attainable opportunities for upward mobility and wealth creation.   

In this report, we lay out one way of defining “quality jobs,” which can reveal the depth of the challenge, allow multiple systems to focus on the same interventions in the same parts of the economy, and mobilize more businesses to change policies and strategies in ways that boost wages and bottom-line outcomes.   

Defining ‘good wages’ is critical to defining ‘quality jobs’ 

The job quality frameworks described above define a quality job using qualitative criteria, such as “creating a sense of belonging.” Some use criteria that are theoretically measurable, but not with publicly available data at the regional scale (such as “offering comprehensive benefits”). These frameworks are useful for interacting with individual businesses that have their own internal data with which to assess their performance on these criteria. But these qualitative definitions are of limited use when it comes to setting measurable goals to motivate inclusive growth strategies. 

Without a quantitative definition, it is difficult—if not impossible—for regional leaders to discern whether economic and workforce development investments are creating and connecting people to quality jobs. And there is good reason to doubt that they are, given data suggesting that “workforce development training dollars do not promote job quality,” that community college programs are misaligned with high-paying middle-skill jobs, and that economic development incentives are dispensed with little clarity about the types of jobs being incentivized. 

What is needed is a clear and quantitative definition of what wages constitute a quality job. Pay—besides clearly being one of the most important characteristics of a job—is easily, precisely, and regularly measurable with publicly available data. Once regional leaders have a wage-based definition in hand, they can easily identify the occupations and industries in which quality jobs exist, which lower-wage jobs provide reliable pathways into these jobs, what level and type of training allows people to access quality jobs, and which demographic groups do—and don’t—have access to them.  

Few regions have a definition of ‘good wages’ 

It may seem strange to claim that quality jobs remain undefined in terms of wages, since each of the job quality frameworks cited above calls for jobs to provide a “living wage” and directs users to tools such as the Massachusetts Institute of Technology’s (MIT) Living Wage Calculator and the Economic Policy Institute’s (EPI) Family Budget Calculator. While both are incredibly useful tools for understanding how cost-of-living thresholds differ across the U.S., the existence of such calculators gives regional leaders the false impression that there is a universal and uncontroversial definition of “a living wage” that can be looked up and adopted as the region’s “good wage” standard. In reality, regional leaders must confront two complex and consequential decisions after looking up their regions using these tools. 

The first is identifying a living wage. Neither MIT’s Living Wage Calculator nor EPI’s Family Budget Calculator identifies a single living wage—if anything, these tools broaden the choice set that regional leaders have to consider, as they define a living wage threshold for several different family structures. For example, MIT’s tool finds that a household in Cincinnati with two working parents and no children can get by if each adult earns about $14 per hour; meanwhile, in a Cincinnati household with one adult and two children, that parent needs to earn over three times as much ($46 per hour) to support their family. Even if most people tasked with making this decision would quickly converge on a narrower range of options (in the $20 to $30 per hour range, for instance), any choice within that range is still highly consequential. A significant share of a region’s jobs (about 20%) pay median wages in that range. That means that, in this example, choosing a threshold closer to $30 rather than $20 means consigning dozens of occupations representing thousands of jobs to the “not good” category (including occupations such as licensed practical nurses and electricians, which are highly relevant to many regional workforce development strategies). In other words, differences in definitions that seem minor in a conference room could lead to significantly misaligned economic and workforce development investments.    

The second decision is whether creating and connecting people to living wage jobs is an appropriate ambition. Even if a group of organizations could agree to use a representative family type to pick a living wage threshold (say two working adults and two children, which requires $26 in Cincinnati), it is not obvious that this threshold is the right goal to anchor regional strategy. One might justifiably point out that it is an insufficiently ambitious threshold, since it provides exactly $0 for wealth accumulation, emergency savings, or retirement planning for that family. But one could also argue that $26 is too stringent when many jobs in the $22 to $25 range, for example, provide young workers with valuable experience and pathways to upward mobility.  

In summary, a calculator can neither decide the appropriate living wage standard nor whether the living wage is the appropriate standard in the first place. Given the complexity of these decisions, it’s easy to see why few regions have actually tried to get a critical mass of organizations to commit to a definition that would enable coordinated action to advance inclusive growth. 

A simple definition to inform regional decisionmaking 

To address this need, Brookings Metro has developed a simple, actionable, and replicable method to provide a starting point for defining quality jobs at the regional level. This method has been tested with economic and workforce development practitioners who are part of Brookings Metro’s Regional Inclusive Growth Network. 

For each region, we first defined a single good wage threshold. To do this, we used data from the EPI’s Family Budget Calculator to identify the weighted average living wage in each county for six household types: those with one worker or two workers, and with zero, one, or two children. This approach is designed to reflect the actual composition of the region’s population by family type and dispenses with concerns that many regional leaders rightly have about identifying a certain household structure as “typical.” The result of this analysis is that the good wage threshold tends to be approximately $23 across the 100 largest metro areas (though as high as $42 in the San Francisco metro area).  

Second, we decided to whom these good wage thresholds should apply. We decided that that they should apply to workers with an associate degree. In other words, a job that requires a two-year degree and pays a good wage—enough to support the average worker and their family—should be understood as a quality job. This is in part a pragmatic decision. A definition of job quality is only useful to the extent that a critical mass of both businesses and nonprofits recognizes it as legitimate. The idea that the wages described above should be attainable with a two-year degree appeals to workforce development actors who, in general, see those degrees as attainable for the populations with which they work. It is also appealing to businesses that are willing to pay higher wages for workers to the extent that they have industry-relevant skills that community colleges are understood to be capable of providing. The data also justify the use of two-year degrees as the threshold. Since roughly half of workers with two-year degrees in most regions actually earn a good wage, this definition points regions toward ambitious but not unrealistic goals.    

One might critique this method on the basis that it reinforces the idea that college (in this case, community college) should be required to earn a good wage. We agree with this line of critique. Ideally, we would be able to use postsecondary credential attainment or apprenticeship completion as the threshold (in other words, any job that requires a postsecondary short-term credential should pay a living wage). Unfortunately, there is minimal reliable subnational data that provide detail on educational attainment levels between high school completion and an associate degree. (“Some college” is the only category between these levels, which omits many apprenticeships and includes people who were in college briefly and did not complete a sub-degree credential.) Regional action on job quality would benefit immensely from more granular data. The nonprofit Opportunity@Work, for example, has identified over 70 million workers nationally who have been “skilled through alternative routes,” which are functionally equivalent to the skills implied by a degree, yet systematically underrecognized.  

Another critique is that a single good wage threshold is meaningless across industries, because different industries have such different wage structures. But this is by intent: Leaders need a clear, universal definition in order to decide which industries and occupations to prioritize for their regional growth, business attraction, and workforce development efforts. It is important to work within existing industries to improve jobs as much as possible; for that task, it is useful to have industry-by-industry definitions of good wages. But if that is all that exists in a region, and every industry is understood to contain a mix of low-quality and high-quality jobs, then there is no basis for regional leaders to make big decisions about which parts of the economy to proactively grow (through both economic and workforce development interventions).  

This method is not definitive—it is meant to give regional leaders who have stalled out on job quality strategies a starting point. We encourage experimentation with other approaches that identify the most ambitious quality standards that economic and workforce development actors and their stakeholders can agree to. What matters most is securing agreement on a definition from a critical mass of organizations. With such a definition in hand, it is easy to produce analysis that, as illustrated in the next section, highlights the importance of job quality and points practitioners toward the right parts of the economy.  

How our definition can change the narrative and reveal actionable insights 

To illustrate the value of a quantitative, wage-based definition of job quality, we used the method described above to assess the eight regions that are part of the Regional Inclusive Growth Network. This basic analysis challenges the narrative held by many civic leaders about the nature and cause of economic inequities and reveals insights that are directly relevant to strategy formulation.   

Challenging the narrative 

The most obvious takeaway is that each of the eight regions has a huge deficit of quality jobs. This runs counter to the narrative that much of the job quality problem may have been solved in the post-pandemic era due to wage increases among previously low-wage jobs. In over half of these eight regions, less than half of workers with a two-year degree earn a good wage. And it is worth emphasizing that a good wage is not an extremely ambitious standard; for the representative family in our methodology, it allows for zero extra money at the end of any month for savings. It is also worth noting that less than half of the working-age population in most of these regions has a two-year degree or more, so even people with a relatively high level of education in these regions are not attaining a good-wage job.   

This data also reveals that racial disparities in quality job employment are not just a reflection of disparities in educational attainment. This is important because the narrative among many civic leaders is that racial disparities in median wages can mostly be attributed to disparities in educational attainment. This data dispels that notion. Across these eight regions, there is an average 15.7 percentage point gap in the share of workers of color and white workers with two-year degrees who hold quality jobs. (Some might point out that this disparity may be explained by differences in field of study, but data at the bachelor’s degree level shows that disparities in field of study by race are not large enough to explain these differences in quality job attainment. For example, approximately 6% of white students get degrees in engineering versus 3% of Black students, which is one of the larger disparities.) This reveals the value of defining job quality as a combination of wages and educational attainment. As noted earlier, some are resistant to including educational attainment, as it might reinforce the idea that a degree is required to earn a good wage. But centering degree attainment in the analysis actually has the opposite effect: These racial disparities suggest that employers do not really take degrees seriously as a measure of skills and should therefore stop using them as an artificial barrier.   

Formulating a strategy 

The main strategic value of this wage- and education-based definition of a quality job is that it provides a basis for dividing the economy into four quadrants: 

This basic categorization does not exist in most regions. Because most jobs can be considered “good” for someone—and because various organizations have incentives to define as “good” the types of jobs they attract or train people for—civic leaders likely imagine that the supply of quality jobs is much larger than it actually is. This means that too many resources are expended creating jobs that aren’t good (in terms of attainability and/or wages) and training people for jobs that aren’t good (in terms of wages).   

The charts below show the distribution of industries across these four quadrants in the Regional Inclusive Growth Network cohort regions. These industries are broken into traded sector, local serving, and public sector, because only traded sector industries tend to be targeted by economic development interventions, and therefore traded sector industries with quality jobs (in the upper right) are the ideal opportunity for alignment between economic development and workforce development. (These same charts can and should be produced using occupational clusters rather than industries. We chose this version because the organizations in the Regional Inclusive Growth Network are economic development organizations, which tend to start by prioritizing industries and then identifying relevant occupations.) 

These charts more concretely portray the overall deficit of quality jobs described above. The upper-right quadrant (showing industries with a majority of quality jobs) is sparse in all regions. Moreover, the larger industries that are in or immediately adjacent to the upper-right quadrant are non-traded (for example, contractors and insurance agents). These charts also reinforce that “advanced manufacturing” jobs are not universally good, as is often understood to be the case—in all regions except St. Louis, Mo. and New Orleans, fewer than 40% of manufacturing occupations are quality jobs.  

In terms of strategy, the few traded sector industries with a majority of quality jobs should be considered priorities for economic and workforce development alignment, assuming that these industries have some growth potential. Examples of these industries in Cincinnati are biopharmaceutical manufacturing, medical device manufacturing, and aircraft manufacturing. Our claim is not that these industries or their equivalents in other regions are unknown to economic and workforce development actors—that is surely not the case. Our claim is that absent a clear definition of job quality, lots of other industries and occupations tend to be considered high quality by either workforce or economic development actors according to their own beliefs and incentives, which dilutes and distracts from efforts to align around truly opportunity-rich sectors.      

Delineating these four quadrants does not, however, imply that a regional job quality agenda needs to be narrow—just that it needs to be more precise. Industries and occupations with accessible low-wage jobs and inaccessible good-wage jobs are still worthy of attention, but those efforts need to be intentionally designed to increase wages or increase accessibility, respectively.  

For accessible low-wage jobs, there are two strategic opportunities. One is that, with a clear definition of good wages, workforce development actors can more specifically determine which lower-wage jobs are most likely to progress to a quality job in a short amount of time. Workforce development investments in training people for jobs below the quality threshold are justifiable insofar as those trainees face significant barriers to entering the labor market. But the justification for those investments is far stronger if they are targeted toward jobs that offer upward mobility; for example, $18 per hour jobs that reliably lead to $25 per hour jobs in a few years, as opposed to $18 per hour jobs that tend to stall out at $22 per hour.  

The other strategic opportunity to improve job quality among these accessible low-wage jobs involves empowering workers. Interventions could include helping employers adopt the strategies that the Good Jobs Institute has long highlighted as good for both workers and bottom-line outcomes. There are small but compelling studies of these sorts of interventions being delivered by organizations that manufacturers trust, such as the Illinois Manufacturing Excellence Center. The Workforce Innovation Center at the Cincinnati USA Regional Chamber is working with companies to help them understand the root causes of their hiring and turnover challenges. There is evidence that turning firms in these industries into worker-owned cooperatives can meaningfully improve wages and other measures of job quality. There is need for more experimentation and scale in this area. Acknowledging that certain industries are unlikely to produce quality jobs without these sorts of purposeful interventions is a necessary first step.   

The set of industries and occupations with inaccessible but good-wage jobs also presents strategic opportunities. If occupations that pay $28 per hour but typically require a bachelor’s degree can be turned into jobs that only require a two-year degree (or equivalent), those jobs can become quality jobs. This can be done by advising firms on where and how to reduce unnecessary degree requirements, the merits of which have been described in compelling terms by Opportunity@Work. Or it can be done through intensive efforts to train young and underrepresented workers for jobs that typically require degrees, as Year Up and Per Scholas, among others, have done to great success. Importantly, these aren’t just training programs—they also change the ways firms hire and develop talent.  

In summary, a clear definition of “good wages” can narrow strategy by helping economic and workforce development actors see which industries and occupations truly offer quality jobs. But such a definition can also motivate a more comprehensive regional job quality strategy by identifying those industries and occupations that should perhaps not be the target of basic growth and training efforts, but should be the target of interventions that involve getting inside of businesses to change both the structure of low-wage jobs (to benefit both workers and firms) and hiring and talent development practices. These opportunities are overlooked when too many industries and occupations are assumed to offer an abundance of quality jobs. 

Extending the quality job definition for workers with a four-year degree 

One shortcoming of this and other methods for defining job quality is that they focus attention largely on occupations with median wages in the $20 to $26 range and the “middle-skill” workers that tend to have those jobs. It does not shed light on disparities within higher-wage jobs or the extent to which workers with four-year degrees are struggling.  

This reflects the fact that job quality conversations have largely been driven by workforce development considerations. But the business-led economic development organizations represented in the Regional Inclusive Growth Network have the ability and credibility to shape how companies think about talent more broadly, including diversifying their workforce at the managerial level and above. This is not only important in its own right, but also is likely to have ripple effects in the form of increased opportunity for lower-wage workers of color.  

Beyond their interactions with individual businesses, these organizations also take responsibility for setting the broader economic agenda for their regions. Having a definition of what constitutes a good wage for a worker with a four-year degree can be useful here too. As Timothy J. Bartik writes, it could allow for more strategic decisionmaking when it comes to providing incentives for business attraction ($30 per hour jobs that require a four-year degree should perhaps be considered less valuable than $25 per hour jobs that require a two-year degree). While workers with four-year degrees are nearly universally more likely to earn higher wages than workers with two-year degrees, understanding whether college-educated workers are generally being paid less relative to their peers in other regions can bring some analytical rigor to discussions about “brain drain”—a major concern of civic leaders in many small to midsized metro areas.  

With this in mind, we also set a good wage threshold for workers with four-year degrees, calculated as the good wage plus an education premium of approximately $10 per hour to reflect the increased income expectations that come with attaining (and paying for) a four-year degree. This education premium reflects the median difference in usual weekly earnings between workers nationwide with two-year degrees and four-year degrees or higher, adjusted for regional cost of living.  

This data reveals that in some regions, such as Cincinnati and Des Moines, there are small racial differences in the extent to which a bachelor’s degree translates into jobs in the $35 per hour range. (Our data does not reveal the presumably larger racial differences that exist higher up the income spectrum.) In other regions—such as Akron, Ohio; New Orleans; and St. Louis, Mo.—major racial disparities persist even among workers with bachelor’s degrees. And from a brain drain perspective, the share of workers with four-year degrees who earn a good wage (around $35, depending on the region) varies from about 45% in New Orleans to around 53% in Cincinnati.  

This data is not as broadly relevant as the data related to workers with two-year degrees. Still, it provides a starting point for measuring the health of regional economies in a way that recognizes that a healthy labor market is one in which the skills (as roughly measured by education) of workers are recognized and rewarded without regard for race or gender—not just one in which median wages are increasing or a growing share of workers earns more than $25 per hour.   

Conclusion 

The nation’s workers and regional leaders alike are right to feel a sense of urgency about job quality. And the many organizations that have promulgated job quality frameworks are right to have provided those leaders with a rich and holistic way of understanding job quality. The problem is that our economic and workforce development systems are, in many ways, not designed or incentivized to focus on quality jobs. It is hard for workforce development actors to not focus largely on “in-demand” low-quality jobs, and it is hard in many regions for economic development actors to not provide incentives to a logistics facility or similar business with low-quality jobs.  

Regional leaders need a firm, shared, quantitative definition of a quality job if they are going to reorient and align these systems while engaging as many firms in as many industries as possible in efforts to not only improve low-wage jobs, but also diversify middle- and high-wage jobs. In our view, the best way to both motivate and inform action is to define a quality job in terms of a measurable good wage threshold, as a complement to other ways of understanding job quality such as benefits, advancement opportunities, and worker empowerment. We hope others iterate and improve upon this methodology, and more importantly, use it to motivate action at the scale that the job quality crisis demands.