Watch for Broken Rungs on the Job Ladder

Sociologist Sylvia Fuller says every job change can reduce your pay cheque by more than one per cent - photo by Martin Dee
Sociologist Sylvia Fuller says every job change can reduce your pay cheque by more than one per cent – photo by Martin Dee

UBC Reports | Vol. 54 | No. 3 | Mar. 6, 2008

By Lorraine Chan

The grass often looks greener when we’re browsing through job ads, but UBC sociology research cautions against frequent changes in employment since it can create a loss rather than a gain in wages.

This is especially true for women with children and families, says Sylvia Fuller, an assistant professor in the Dept. of Sociology.

In the first detailed study of its kind, Fuller probed the consequences of frequent job changes on men and women’s wages. Using nationally representative data from the United States National Longitudinal Survey of Youth, Fuller analyzed the pattern of wage growth of workers during their first 12 years in the labour market. She looked at the cohort entering the work force during the late 1970s to early 1990s.

“This is a generation of U.S. workers who started their careers during major economic upheaval and corporate restructuring,” says Fuller, whose findings were recently published in the American Sociological Review.

Fuller’s research shows a strong correlation between a drop in earnings and the number of times someone changes employers, especially due to layoffs or firings.

“On average, every job change reduces a worker’s wage by a little over one per cent. So if someone changes jobs 10 times, they’d be earning about 11 per cent less.”

The statistics paint a sobering picture of wage penalties for women who leave a job for family reasons, almost on par with getting fired. For example, female employees who quit for reasons such as taking care of children or following a husband to another city would see a 2.6 per cent drop in wages compared to 2.7 per cent less if they were fired.

“It seems that leaving a job for a family-related reason results in significant wage disadvantages, even beyond what we would expect given the time out of the labour force that such quits often entail.”

Fuller says reasons for this may be that women who leave jobs for family-related reasons may be seen as less committed to their careers, making employers more hesitant to hire them for jobs with good wages.

Her research shows that men and women enjoy a brief window when they first enter the job market to look around and find a good fit.

“Early voluntary mobility can improve wages, but after five years of working you start to lose ground if haven’t found your place in the labour market. Even if you’re not fired or laid off, changing jobs later in your career doesn’t tend to bring any monetary benefits.”

In fact, frequent changes may start to stigmatize one’s career, says Fuller, and workers who change jobs too frequently also lose out on the wage premiums associated with accumulating some tenure with an employer.

“It brings diminishing returns. Employers may start wondering why aren’t you aren’t able to stay in one place.”

What really surprised her, says Fuller, is how these findings contradict what many young people accept as sound career advice, “that success no longer comes from staying in one place, that this is an old fashioned model not relevant for today’s workplace.”

She observes that this “new norm” came about during a period of corporate downsizing and outsourcing, giving rise to rhetoric that painted job mobility as a glamorous means to higher pay and better status.

“During the ’90s, the New York Times ran a series on ‘the end of the job.’ There was the idea of the migrant professional and the understanding that companies no longer expect lifetime loyalty from their employees, who in turn wouldn’t expect any job security.”

Fuller says her findings provide a cautionary tale that the labour market hasn’t fundamentally changed, and that the work model our parents and grandparents enjoyed may be the best way to get ahead in life after all.

“In a way the ideal is the old story. You can afford a divorce from employers a few times, but after a while, it diminishes your attractiveness.”

Fuller is currently researching the earning outcomes for Canadian workers who get caught in cycles of temporary work compared to permanent positions.