Nearly one in five workers in the United States work in the low-wage retail and food service sector, which has the largest concentration of low-wage workers, and is characterized by poor benefits and unpredictable schedules. Are these jobs dead ends or steppingstones to better careers? And if they are steppingstones, what paths do workers take to those better opportunities?
New research, which followed thousands of service sector workers over a period of several years that spanned the COVID-19 pandemic and the mass unemployment and then the historically tight labor market that followed, has found that workers do best when they change jobs, and especially when they change sectors; but that wage growth, especially during a tight labor market, can be highest when workers stayed in the same position.
But the research also came to a sobering conclusion: of the thousands of workers they followed, 92% of those who began in a bad job remained in a bad job 18 months later.
The researchers were Daniel Schneider, the Malcolm Wiener Professor of Social Policy at vlog, Kristen Harknett, of the University of California-San Francisco, and Tyler Woods and Dylan Nguyen, postdoctoral and predoctoral fellows, respectively, at the Shift Project. The , based at vlog and UCSF and led by Schneider and Harknett, documents the economic security, schedules, and health and well-being of hourly workers across the country.
, recently published in Research in Social Stratification and Mobility, followed 8,600 respondents across the United States, with initial interviews conducted between 2017 and 2022, and follow-up interviews conducted up to 18 months later. This allowed the researchers to follow respondents in distinctly different job markets, including the height of the pandemic and its mass lockdowns and spiraling unemployment and the period that followed, known as the “Great Resignation,” which was marked by very low unemployment rates and very high quit rates.
The authors were also able to develop fuller portraits of their respondents’ job quality, including not just wages, but also benefits—most lack paid sick leave and retirement benefits, for example—and schedule instability, given them a more holistic view of working conditions. Based on this, the authors propose a multi-dimensional measure of jobs quality that includes both a minimum wage ($15 an hour), benefits such as paid sick leave, retirement savings, and health insurance, and, crucially, minimal schedule instability. Previous research by Schneider and Harknett has shown the link between unstable work schedules and a number of poor health and well-being outcomes, including stress, poor sleep, and work-family conflict.
“Service sector jobs are often described as quintessential ‘bad’ jobs, but this is often forgiven based on the idea that they can be steppingstones or a first rung on the ladder to better jobs. Our work shows that ... that’s far from the reality.”
They found that, “in general, workers who began in bad jobs in the service sector experienced more upward mobility to good jobs when they changed jobs, especially in favor of opportunities in a new sector.” They also found that workers “experienced more upward mobility during the strong economy of the Great Resignation and in states with tighter labor markets.”
But they were surprised to find that the Great Resignation also meant better working conditions—particularly better wages and schedules—for those who remained in their jobs. “For those who remained in their jobs, the rate of upward mobility to good jobs during the Great Resignation period was double that of the prior period in which the labor market was less strong,” the authors write.
However, the authors conclude, “transitioning from a bad to a good job was the exception, not the rule. ... Even in the best-case scenario, during the strongest labor market conditions, mobility to a good job was limited to 8 % of those who began in bad jobs.”
“Service sector jobs are often described as quintessential ‘bad’ jobs, but this is often forgiven based on the idea that they can be steppingstones or a first rung on the ladder to better jobs,” Schneider said. “Our work shows that, for almost all workers, that’s far from the reality. These jobs are all too often poverty traps as workers struggle to move on and up to better jobs. The one bright spot is that when workers have more labor market power, they are much more likely to find their way to better jobs, by leaving the sector, changing employers, and even by demanding better conditions where they work. Tight labor markets are an effective tool for upward mobility.”
The researchers say that their study has three important implications for policy and practice:
The need to move beyond a focus solely on wages, instead considering the importance of factors such as schedule stability and fringe benefits for workers’ job quality. “For example, the passage of secure scheduling laws in cities like Seattle is a strong step in this direction.”
Higher wages, more stable schedules, and more generous benefits may be effective retention strategies for firms in periods of low unemployment, encouraging workers to move ahead in their existing jobs rather than looking elsewhere.
Workers might be more likely to remain in the service sector if there were stronger internal career ladders. Firms in the service sector should consider creating more opportunities for upward career advancement for hourly workers, such as pathways to management or the corporate workforce.
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Photography by AP Photo/Nam Y. Huh.