How to make sense of the job security enigma

It’s an economic mystery worth solving. Conventional wisdom holds that long-term job relationships between workers and their employers are breaking down. We’ve all seen and heard countless heart-breaking stories of firms firing large numbers of career workers. Labour markets provide less stability and security than in the past, it seems.
And yet, this belief seems to clash with hard evidence. Job tenure —the time workers stay with one employer —has been stable since the mid-1990s. By some measures, it’s increased slightly. That seems to discredit the notion that job markets have become less stable. How can they be less protective if job tenure is increasing?
Good question.
An important new study may have the answer. To make sense of the confusing and contradictory trends, the study argues, it’s necessary to examine the job tenure of three groups
separately.
First, consider workers with low job tenure —many of them young. Although they ultimately move on to other jobs, their average tenure is actually increasing.
Second, women. Since the early 1970s, they’ve been entering the labour force by the millions. As they grow older, their job tenure also increases. The aging of baby boomers has a similar effect.
Now look at the impact of these trends on overall job tenure. Together, younger workers and women raise job tenure. This, in turn, obscures the major story: the decreasing job tenure of middle-aged men from their 40s to 60s.
“Focusing on men in specific age categories,” the study says, “we find a substantial decline in the fraction of workers who have worked with the same employer for more than 20 years.”
The numbers are dramatic. In the 1980s, an estimated 39.5% of men 50 to 59 had been in their current jobs for 20 years or more. For men 60 to 64, the percentage —40% —was virtually identical. By the mid-2010s, those percentages had dropped sharply to 26% for men 50 to 59 and to 32.3% for men 60 to 64.
Meanwhile, women’s average job tenure was increasing. For those 50 to 59, the share who had 20 or more years in the same job rose from 15.2% in the 1980s to 21.3% in the mid-2010s. Among workers 60 to 64, the share increased from 23.1% to 27.9% in the mid-2010s.
It’s possible for the labour market to exhibit both rising and falling job security, according to the study, which was recently released as a working paper for the National Bureau of Economic Research. It was written by Federal Reserve economists Raven Molloy, Christopher Smith and Abigail K. Wozniak.
Trying to explain contrasting experiences of men and women, the study suggests that men’s eroding job stability reflects the experience of many male-dominated industries — particularly manufacturing —towards shorter job tenure. But the declines occurred across a broad swath of industries, including construction, retailing and agriculture.
One curious finding of the study is that falling job security does not seem to have affected surveys of job satisfaction. It’s not clear why. One possibility is that surveys haven’t focused on older men who are most affected by job loss. Another is that “job loss is only one aspect of job security, and reveals nothing about job satisfaction,” says the study.
Still, one thing hasn’t changed: whatever the cause, involuntary job loss is almost always a devastating experience.

—The Washington Post

Robert J. Samuelson writes a twice-weekly economics column. Both appear online, and one usually runs in The Washington Post in print on Mondays