Understanding the demand side of the low-wage labor market: Final report

Over the past decade, state and federal welfare policies have increasingly emphasized moving welfare recipients into jobs, and over this time period large numbers of recipients have gone to work. As welfare recipients enter the labor market they join other groups of disadvantaged and less-skilled workers seeking jobs, including ex-offenders, high-school drop-outs, less-educated young black men, and single mothers who are not receiving welfare. These workers all face similar challenges in the labor market: finding jobs that offer benefits and relatively high wages, retaining jobs once found, and finding opportunities for advancement. Most past research in this area has focused on the workers themselves—the supply side of the labor market—and what individual characteristics are associated with better jobs and advancement. This is only half the equation. Understanding the hiring practices, job requirements, and workplace policies of employers—the demand side—can provide considerable information to policy makers interested in promoting work and advancement among welfare recipients and other less-skilled workers. To this end, in 2007 the authors fielded a nationally representative survey of private-sector employers to provide information about employers’ practices and workplace policies relevant for less-skilled workers. They gathered information on employer characteristics, job requirements, wages and benefits, hiring practices, and potential for advancement. The survey focuses on employers’ most recently filled jobs that require no more education than a high school degree or GED; we refer to these jobs as non-college jobs. This group of jobs includes both entry-level jobs—-those requiring minimal skills and experience—-as well as “next-level” jobs—-non-college jobs demanding higher skill and experience and potentially offering higher wages and benefits. The rest of this Executive Summary outlines major findings and gives a brief discussion of the implications for policy. Exhibit E1 at the end of the Executive Summary is a chart of major findings. (author abstract)