In post-recession America, many citizens, especially New Yorkers, have yet to experience financial change. A new report finds a "job deficit" persists in mid- and higher-wage industries.
The paper from the National Employment Law Project, a non-partisan, not-for-profit organization that conducts research and advocates on issues affecting low-wage and unemployed workers, finds the depth of the good-jobs hole left by the recession means that job-seekers will continue struggling to find good-paying jobs for the foreseeable future. Data-crunchers looked at the recovery period starting in July 2013 and ending in July 2014.
NELP categorized lower-wage industries as those paying between $9 to $13 an hour - mid-wage from 13 to 20 and higher-wage 20 to 33 dollars an hour. NELP policy-analyst Claire McKenna: "Over the past year, jobs continued to grow more in lower wage industries than in mid or higher wage industries, though the imbalance is really not as great as it was when we first began tracking this data in 2010. Specifically, lower wage industries accounted for 41 percent of job gains from July 2013 to July 2014, mid-wage industries accounted for 26 percent of employment growth over this period and higher-wage industries accounted for about one-third of recent employment growth."
McKenna adds the number of jobs in lower-, mid- and higher-wage industries as of July 2014 with the number of jobs in these industries at the start of the recession in January 2008, when employment reached its peak. "We see that 2.3 million more workers are employed in lower-wage industries. By contrast, there are approximately 1.2 million fewer jobs in mid- and higher-wage industries."
From 2009 to 2013, real median hourly wages slipped an average 3.4 percent across all occupations.
Analysts point out that the resulting "income inequality" damages the flow of the economy through one simple principle: people who don't earn enough money have less to spend. *
According to NELP, 4.49 million retail salespersons across the U.S. have seen their real median hourly wages decline by 4.2 percent. And in higher-wage industries, there are 522,000 fewer jobs than prior to the recession.
Mark Dunlea, Executive Director of the Hunger Action Network of New York, uses stronger language to point out that state residents are between a rock and a hard place. "For many low-income New Yorkers, unfortunately, the recession has never ended. Much of the so called job growth we've seen in recent years has been poverty wage jobs replacing what used to be middle wage employment. It's quite clear that the private sector has no interest in paying fair wages. This is why we need our elected officials to raise the minimum wage to a living wage. Not the sub poverty wage of 8 dollars an hour that Governor Cuomo and state law makers put in the place last year. But something closer to $15 an hour."
NELP's federal wage figures lend support to Dunlea's argument. Again, Claire McKenna: "The federal minimum wage has been stuck at $7.25 an hour for five years and the tip minimum wage has been languishing at just $2.13 since 1991, while the costs for basic goods like food, housing, child care and everything else have gone up substantially."
Federal legislation would raise the nation's minimum wage to $10.10 per hour by 2015 and adjust it each year thereafter to keep pace with the cost of living. The Senate held a vote at the end of April as to whether to proceed to debate on the bill, but it failed to get the required 60 votes to pass over the threat of a Republican filibuster. "In the face of this Congressional gridlock, 10 states since January have taken action to raise their minimum wages, including Connecticut, Vermont, Rhode Island. We've also seen cities acting. These findings really validate the move by cities to set their local minimum wage rates."
Seattle passed a $15 minimum wage rate in June. New York City Mayor Bill de Blasio has been stumping to raise the minimum wage; Governor Andrew Cuomo announced the start of a new minimum wage policy giving employees at JFK and La Guardia airports a boost in pay from $9 per hour or less to $10.10 an hour come February 1st.
Opponents of a wage increase argue it would sound a death knell for small businesses and force local layoffs.
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 higher-wage 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.
Today, there are approximately 1.2 million fewer jobs in mid- and higher-wage industries than there were prior to the recession, while there are 2.3 million more jobs in lower-wage industries. During the labor market downturn of January 2008 to February 2010, job losses occurred throughout the economy but were concentrated in mid- and higher-wage industries, according to NELP's earlier analyses.
Click here for the full report: An Unbalanced Recovery
