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MOVING UP OR MOVING ON: WHO ADVANCES IN THE LOW-WAGE LABOR MARKET?

MOVING UP OR MOVING ON: WHO ADVANCES IN THE LOW-WAGE LABOR MARKET? By Fredrik Andersson, Harry J. Holzer, Julia I. Lane Russell Sage Foundation, 2005. Data: Longitudinal Employer Household Dynamics (LEHD), U.S. Census Bureau

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MOVING UP OR MOVING ON: WHO ADVANCES IN THE LOW-WAGE LABOR MARKET?

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  1. MOVING UP OR MOVING ON: WHO ADVANCES IN THE LOW-WAGE LABOR MARKET? By Fredrik Andersson, Harry J. Holzer, Julia I. Lane Russell Sage Foundation, 2005

  2. Data: Longitudinal Employer Household Dynamics (LEHD), U.S. Census Bureau Sample: Prime-Age Workers with low annual earnings in five states (CA, FL, NC, MD, IL), 1993-2001 Analysis: Among those with low annual earnings (below $12,000) for at least 3 years, what enabled some to transition to persistently higher earnings levels in the subsequent 6 years?

  3. Summary of Key Findings Advancement of low earners over time depends not only on their personal skills, but also on characteristics of their employers and jobs High-Wage Sectors: Construction, Durable Manufacturing, Transportation/Utilities, Wholesale Trade, Financial Services, Health Sector Within-Sector differences important: High-wage v. Low-wage firms Better to Move to Higher-Wage Firms than to Accumulate Seniority at Low-Wage Firms: Higher initial wages, more growth over time Minorities and other low earners: Lack Access to Better Firms – Credentials, Work History, Residential Locations, Informal Networks Temp Agencies (and other “intermediaries”) can help connect low earners to better firms

  4. Policies 1) Improving Access of Low Earners to Better Firms and Jobs Temps and other intermediaries: Use Local Labor Market Information (LMI) to identify growing high-wage sectors to target Integrate Training with Job Placements Plan for Careers: Sequences of Improving Jobs for low earners 2) Create More Higher-Wage Employers and Jobs Raise Minimum Wages, Encourage Collective Bargaining Subsidies and Tax Credits for Firms that provide higher wages/promotion opportunities to less-skilled workers Technical assistance to help transform firms – e.g., building career ladders and lattices in nursing homes 3) Other Supportive Policies Improve Educational Opportunities Supplement Wages and Benefits: Expanded EITC, Health Care, Child Care, etc. Target Groups with Specific Barriers (e.g., those with disabilities, criminal records, etc.)

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