Richard Florida is a co-founder and editor at large of CityLab and a senior editor at The Atlantic. He is a university professor in the University of Toronto’s School of Cities and Rotman School of Management, and a distinguished fellow at New York University’s Schack Institute of Real Estate and visiting fellow at Florida International University.
Millions of U.S. workers hold insecure jobs that don’t pay enough to support a family. That needs to change, and cities can lead the way.
This Labor Day, with President Trump in office, it’s time to realize that the task of creating good jobs for more Americans rests with its cities. Just as cities have led on climate change and minimum wage, they should lead on creating secure, well-paying jobs.
The stock market continues its boom and unemployment is at a record low (3.9 percent), but far too many Americans still toil in insecure jobs that do not pay enough to support a family.
Almost 70 million American workers—amounting to nearly half of the entire workforce (48.3 percent)—toil in low-wage service jobs, taking home less than $35,000 a year, compared to the average wage of more than $50,000 for all workers and more than $80,000 for knowledge, professional, and creative workers.
Wages by Job Class
|Annual Wage||Wages Left After Paying for Housing|
Service-class workers have a meager $22,715 left over after paying for their housing, compared to nearly $40,000 for all workers and almost $70,000 for knowledge, professional, and creative workers. Indeed, when housing costs are subtracted, knowledge, creative, and professional workers have triple the amount of money left over compared to service workers. (My colleague at the University of Toronto, Karen King, crunched these numbers based on U.S. Bureau of Labor Statistics Occupational Employment Statistics for 2017. The data cover large metropolitan areas with more than 1 million people.)
These service-class jobs are disproportionately held by women and minorities. Women hold more than six in 10 service-type jobs. And 58 percent of women do service-class work, compared to just 37 percent of men. More than half of black (56 percent) and Hispanic (50.3 percent) workers toil in service jobs, compared to 45 percent of whites and 40 percent of Asians.
Service jobs are overwhelmingly concentrated in America’s large metro areas. The 50 largest metros have well over half of all service-class workers; the top 20 are home to more than a quarter, and the top 10 nearly a fifth.
Metros With Most Service-Class Jobs
|New York-Newark-Jersey City, NY-NJ-PA||4,744,850|
|Los Angeles-Long Beach-Anaheim, CA||3,027,720|
|Dallas-Fort Worth-Arlington, TX||1,704,880|
|Miami-Fort Lauderdale-West Palm Beach, FL||1,403,110|
|Houston-The Woodlands-Sugar Land, TX||1,372,750|
|Atlanta-Sandy Springs-Roswell, GA||1,212,170|
|San Francisco-Oakland-Hayward, CA||1,082,790|
Service-class jobs comprise well over the half the workforce in quite a few large metros. They make up more than 60 percent of employment in Las Vegas; roughly 55 percent in Orlando and Miami; and more than 50 percent in New York.
Large Metros With Highest Share of Service-Class Jobs
|Metro||Service-Class Share of Total Employment|
|Las Vegas-Henderson-Paradise, NV||60.8%|
|Miami-Fort Lauderdale-West Palm Beach, FL||54.8%|
|San Antonio-New Braunfels, TX||53.5%|
|Tampa-St. Petersburg-Clearwater, FL||52.5%|
|Buffalo-Cheektowaga-Niagara Falls, NY||51.5%|
|New Orleans-Metairie, LA||51.2%|
|New York-Newark-Jersey City, NY-NJ-PA||51%|
There is considerable variation in service-class wages across metros. Service workers take home considerably less that the national average in New Orleans, Orlando, Tucson, and the large metros listed in the table below. This compares to a high of more than $40,000 in metros such as San Jose, San Francisco, New York, Seattle, and Washington, D.C.
Despite the relatively high wages paid in expensive cities, service workers are often worse off in them financially once the high housing prices of these places are taken into account. Service-class workers have less than $18,000 left over after paying for housing in San Jose, and less than $20,000 left over in Washington, D.C. and Los Angeles. By contrast, they have considerably more left over in the Rust Belt cities of Buffalo, Rochester, Cleveland, Detroit, and Pittsburgh, as well as in New York and Seattle.
Large Metros Where Service-Class Workers Have the Least Left Over
|Metro||Wages Left Over After Housing|
|Virginia Beach-Norfolk-Newport News, VA-NC||$17,559|
|San Jose-Sunnyvale-Santa Clara, CA||$17,647|
|San Diego-Carlsbad, CA||$17,723|
|New Orleans-Metairie, LA||$18,075|
|Riverside-San Bernardino-Ontario, CA||$18,991|
|Miami-Fort Lauderdale-West Palm Beach, FL||$19,511|
|Los Angeles-Long Beach-Anaheim, CA||$19,626|
|Las Vegas-Henderson-Paradise, NV||$19,982|
Large Metros Where Service-Class Workers Have the Most Left Over
|Metro||Wages Left Over After Housing|
|Buffalo-Cheektowaga-Niagara Falls, NY||$25,012|
|Minneapolis-St. Paul-Bloomington, MN-WI||$23,962|
|Grand Rapids-Wyoming, MI||$23,321|
|New York-Newark-Jersey City, NY-NJ-PA||$23,316|
More than 90 percent of service workers are currently trapped in dead-end jobs with little possibility of upgrading them. But these jobs can be upgraded. In fact, we’ve done it before with manufacturing jobs. During the New Deal and after, the private and public sectors forged a new compact to turn low-paying and insecure manufacturing jobs into high-paying, family-supporting ones that formed the backbone of the American Dream.
My own factory-worker father often reminded me that the very same low-paying factory job he held during the Great Depression—a time when it took the combined wages of him, his parents, and his six siblings to make ends meet—was transformed into a high-paying job that enabled him to get married, buy a home, and put my brother and me through college. Not only did the nation enact new labor legislation, but capitalists like Henry Ford understood that higher wages were needed to build a middle class and spur consumption and demand.
Of course, there is little likelihood of such a partnership between the federal government and the private sector happening today, with Trump in the White House and the Republicans in control of both houses of Congress. The Trump administration has already pushed for and enacted policies that undermine workers.
The push in many cities for higher minimum wages is a good first step, but it is not enough. Just as cities stepped up on climate change and on immigration, it is time for them to do so on the crucial issue of good jobs.
There is much that cities can do to set such a change in motion. It’s not like service work is inevitably condemned to being bad. In Europe, for example, service-class work is much better-paying and higher-quality. A growing body of research shows that paying higher wages to service workers can result in increased productivity and profits for retail and service firms. Firms like Costco, Trader Joes, and Four Seasons Hotels and Resorts take the same approach as world-class manufacturing firms, paying their workers more, involving them more fully in quality and innovation efforts, and incentivizing them to provide better customer service.
Cities can help organized networks of service firms learn about, compare, and disseminate best practices. When America was still a farming nation, the Agricultural Extension Service brought best-practice technology and management to farmers and farms. Later, the Manufacturing Extension Partnership helped bolster and restore the competitiveness of U.S. factories. Now cities can do the same for service work.
Groups of cities and mayors could launch a national or even global initiative—similar to C40, which works on climate issues—to set targets and goals for upgrading service-class jobs. They could create awards programs to recognize leading-edge service firms, and they could even undertake badging efforts (similar to environmental quality standards) that identity service firms that pay their workers fairly and create good jobs.
It is time for cities to step up and help the millions upon millions who hold service jobs achieve a new version of the American Dream.