The new Labour Government is on a mission to grow the economy, with its primary aim focused on promoting fairness in employment, eradicating pay insecurity and offering more flexible working conditions. All of these objectives are tied to improving working conditions. As highlighted in a body of literature, including a recent study by the Institute for Employment Research (IER), good jobs with better job quality benefit both individual workers and society as a whole by boosting innovation, increasing productivity and improving individual wellbeing. The creation of more good jobs would support the Government's efforts to stimulate economic growth and generate the tax revenues necessary for public infrastructure investment, such as schools and hospitals. But what is the path towards creating more ‘good jobs’? How can we make meaningful progress in achieving better job quality?

Properly identifying ‘bad jobs’ as the first step

In both academic and policy literature, the term ‘bad jobs’ is frequently used, often referring to low-wage, precarious or dirty work. However, a significant challenge lies in the fact that ‘bad jobs’ are often loosely defined, focusing on a single aspect of job quality, such as earnings or skills. Over the past two decades, scholars and policymakers have increasingly recognised the multi-dimensional nature of job quality, incorporating factors such as physical and social environments, work intensity, autonomy and working time quality. Despite this, the definition of ‘bad jobs’ still heavily relies on the normative judgements of scholars or policymakers. Just as a disease requires accurate diagnosis before treatment, ‘bad jobs’ must be thoroughly understood and analysed before effective solutions can be implemented. Misidentifying bad jobs can lead to misguided policies that either fail to address the core issue or exacerbate the problem. Therefore, a careful assessment and understanding of ‘bad jobs’ is crucial for devising sustainable and impactful interventions that can truly improve the wellbeing of both individuals and society.

A new ‘bad jobs’ threshold based on job quality and wellbeing

A recent study co-authored by Dr Sangwoo Lee at the IER introduced a new ‘bad jobs’ threshold based on the relationship between job quality and individuals’ psychological wellbeing, as measured by WHO-5 wellbeing index. Drawing on the concept of poverty, where those below the poverty line experience significantly worse wellbeing than those above it, this new threshold applies a similar framework to ‘bad jobs’. A significant improvement in psychological wellbeing has been observed between workers in the lowest decile and those in the second lowest decile of job quality, defining a threshold for ‘bad jobs’. When workers move from below to above this threshold—specifically, the bottom 10th percentile—their wellbeing improves significantly, much like the jump in wellbeing observed when individuals move slightly above the poverty line.

This approach is particularly meaningful as it incorporates seven dimensions of job quality—Earnings, Prospects, Skills and Discretion, Social Environment, Physical Environment, Work Intensity and Working Time Quality—using data from Europe. It offers a distinct perspective as only approximately 20% of workers in low-earning jobs (bottom 20%) or precarious jobs (i.e., low job security), which are the traditional measures of ‘bad jobs’, fall into this new category. If workers fall below the 10th percentile of job quality, they are classified as being in ‘bad jobs’. Policies targeting these workers could significantly enhance individual wellbeing, ultimately improving the wellbeing of society as a whole.

What are ‘bad jobs’, and who has them?

By using a new way to define ‘bad jobs,’ we can gain valuable insights into where these jobs are most common and who is affected. Bad jobs tend to be more prevalent in countries with lower GDP per capita and weaker labour regulations, such as the absence of a national minimum wage or less active trade unions. For example, in Europe, Norway has the lowest proportion of bad jobs (only 2%), while Greece has the highest (18%). In the UK, about 5% of jobs are considered ‘bad,’ placing it 8th lowest out of 31 European countries.

Three key findings reveal how bad jobs differ from low-paying jobs:

• Bad jobs are more common in large establishments. While large establishments tend to offer higher wages, they often have worse working conditions, such as stressful environments and higher workloads.
• There is no significant difference between men and women in the prevalence of bad jobs, despite the persistent gender pay gap observed across Europe and beyond.
• While working in the private sector does not necessarily increase the likelihood of being in a low-earning job, it does increase chances of having a bad job.

These findings show that job quality is not just about pay—there are other important factors to consider, and focusing on only a single dimension can result in a misconceptualisation of ‘bad jobs’.

A wellbeing-based definition of ‘bad jobs’ could serve as a valuable tool for assessing policy priorities, particularly when they aim to improve wellbeing of individuals and the whole society. While a plan to create good jobs across the UK is essential, it must be accompanied by targeted policies to reduce ‘bad jobs’ as a stepping stone towards ‘good jobs’. Although UK-specific data needs further exploration, the Europe-wide findings and the new definition of ‘bad jobs’ provide policymakers with a clearer idea of where to focus their efforts and where to start making improvements.