The voices of Urban Institute's researchers and staff
June 8, 2016

Cities can drive good jobs with better information

June 8, 2016

Workers across the United States are demanding livable wages and better working conditions, and cities are responding by increasing the minimum wage and exploring policies such as scheduling ordinances and mandatory sick leave.  But critics wonder about the unintended consequences of these top-down regulatory approaches, and questions remain about whether workers will benefit if employers do not believe these policies are consistent with their profitability; employers might just find ways to subvert these new laws by reducing hours or eliminating jobs. 

The challenge for advocates is to convince businesses that the spirit behind raising the minimum wage—good-quality jobs for all—is in fact a smart business investment. To do that, advocates need to leverage data on job quality.

Increasing transparency to drive change

Transparency can increase external pressure on employers to invest in good jobs. The public often does not make the connection between companies with low-wage business models and the costs to the safety net when compensation and benefit packages are not enough for families to meet basic needs. However, some high-profile campaigns have shown how greater awareness about these trade-offs can shape consumer opinions and behaviors. After years of scrutiny, Walmart recently launched the Walmart Retail Opportunity Initiative, which incorporates employee training, increased wages, and efforts to improve career pathways. An additional benefit is that modest changes in businesses with market share as large as Walmart can exert upward pressure on job quality in their communities.

In addition, more and better information can spark businesses’ internal motivation. Employers sometimes don’t know much about how low-quality jobs can affect their employees; surfacing this information can make a tremendous difference. When looking into high turnover among its low-wage call center workers, Aetna started asking questions and discovered financial hardships that seriously impeded employee engagement and productivity. In response, the company saw opportunities to make itself more profitable by making substantial investments in wages and health benefits, in turn gaining a competitive advantage over its peers.

Cities as information brokers for “good jobs”

Achieving this kind of transparency is can be difficult because advocates and even businesses themselves often don’t have access to the data to make it possible. That’s where cities come in. Many already house or have relationships with government agencies that gather systematic data on a broad range of public costs and basic information about local employers and jobs. Several cities are embracing the open data movement that enhances transparency while providing public access to new and unconventional data sources.

We could build off the open data movement to improve job quality. In a an essay released today, colleagues at the Urban Institute argue to make a range of performance measures publicly available to employees and local consumers in a report card.

Similar to how municipal health departments rate restaurants on health measures, cities could rate local businesses on measures of job quality to inform consumer choice, business strategy, and public policy. Consumers could use this information to make decisions about where they do business and look for employment, businesses could benchmark themselves with competitors, and policymakers could use the information when making decisions about taxes and regulation.

To be successful, job quality proponents need to capitalize on the unique role of place in shaping a consumer- and locally driven approach. With cities as a primary data hub, policy responses can steer away from dictating standards that might differ by local context and allow businesses to adjust as the local economy shifts. Accessible data might also prompt businesses to compete with each other. As companies set higher expectations for job quality, others may follow, leading to expansion of innovative employee-centered policies that maximize profit and decrease public cost.

This post is part of a series funded by the Rockefeller Foundation that explores how city leaders can promote local economies that are inclusive of all their residents. The framing brief, “Open Cities: From Economic Exclusion to Urban Inclusion,” defines economic exclusion and discusses city-level trends across high-income countries. The four “What if?” essays suggest bold and innovative solutions, and they are intended to spark debate on how cities might harness new technologies, rising momentum, and new approaches to governance in order to overcome economic exclusion.

Service Employees International Union members celebrate after California Governor Jerry Brown signed landmark legislation SB 3 into law on April 4, 2016 in Los Angeles, California. The law makes California the first state in the nation to commit to raising the minimum wage to $15 per hour statewide. Photo by David McNew/Getty Images

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