Real Wages & Good-Paying Jobs Still Lagging in Unbalanced Recovery

Jobs Deficit in Mid- and Higher-Wage Industries Persists

New York—Real wage declines and the deep deficit of jobs in mid- and higher-wage industries remain serious concerns in the current recovery, as job gains in lower-wage industries continued to outpace gains in mid- and higher-wage industries over the past year, according to a new report from the National Employment Law Project.

Job growth over the past year continued to be strongest in lower-wage industries, where employment now exceeds pre-recession levels by 2.3 million. In contrast, there are nearly 1.2 million fewer jobs in mid- and higher-wage industries today than there were before the recession. While a recent uptick in job growth in higher-wage industries1 is a positive sign, the depth of the good-jobs hole left by the recession means that jobseekers will continue struggling to find good-paying jobs for the foreseeable future.

“While job growth at the high end has improved considerably in recent months, it’s still too early to know whether it will last, and the economy is certainly not out of the woods. We’re far from where we need to be for working families to feel secure again,” said Christine Owens, executive director of the National Employment Law Project. “More than four years into a recovery that’s been dominated by low-wage work, our economy is still struggling to emerge from the long shadow of the Great Recession.”

NELP’s analysis sorted 83 industries based on their median hourly wages into three groups (lower, mid, and higher), each representing one-third of private employment in the month before job losses began. Prior NELP analyses found that while job losses during the recession were heaviest in mid- and higher-wage industries, job gains since then have been concentrated in lower-wage industries. The new report extends that analysis, focusing on the period July 2013 to July 2014 (see Figure 2, below), and finds the following:

  • Lower-wage industries accounted for 41 percent of new jobs from July 2013 to July 2014; today, lower-wage industries employ 2.3 million more workers than at the start of the recession.
  • Mid-wage industries accounted for 26 percent of new jobs during the same period; there are now 698,000 fewer jobs in mid-wage industries than at the start of the recession.
  • Higher-wage industries accounted for 33 percent of new jobs during this period; there are now 522,000 fewer jobs in higher-wage industries than at the start of the recession.

The imbalance is exacerbated by the fact that lower-paying jobs have seen the biggest drop in their real median hourly wages during the recovery. Real hourly wages steadily declined across all occupational wage groups, but the lowest-paying occupations saw the greatest declines. That trend continued through 2013:

  • Averaged across all occupations, real median hourly wages declined by 3.4 percent from 2009 to 2013.
  • Lower- and mid-wage occupations saw greater declines in their real median wages than did higherwage occupations: Occupations in the top two quintiles (based on 2013 median hourly wages and employment) saw real wage declines of 2.1 to 2.5 percent, on average, whereas occupations ranked in the bottom three quintiles saw average real wage declines of between 3.6 to 4.6 percent.
  • Among the 10-largest occupations in the bottom quintile, declines were especially pronounced, ranging from 5.8 to 8.3 percent, for maids and housekeeping cleaners, home health aides, personal care aides, food preparation workers, and restaurant cooks.

“These real wage declines mean that workers in mid- and low-wage jobs are falling further and further behind,” said Owens. “These losses are part of an alarming trend toward greater inequality and a shrinking share of the economic pie going to workers’ wages, especially low- and mid-wage workers. Policymakers in Washington and in our state capitals need to adopt solutions that begin to straighten out our economic priorities and reduce these economic disparities. Raising the minimum wage, which will reverse the declining real value of that critical wage floor, and supporting the right of workers to stick together and negotiate for better pay and working conditions, are good places to start.”

Emma Stieglitz
(646) 200-5307

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