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Mid-Wage Earners Hardest Hit by Recession

By | 09.04.12

Mid-Wage Earners Hardest Hit by Recession

Although Americans are slowly going back to work, a recent report by the National Employment Law Project (NELP) finds that many workers are settling for lower wages than they were earning before.

The NELP report, released in August 2012, analyzes job loss and job growth trends during and after the Great Recession. The report finds that low-wage jobs, those paying $13.83 per hour or below, dominate the current U.S. recovery and that mid-wage jobs, those paying between $13.83 and $21.13 per hour, have been the hardest hit and slowest to recover.

Among the jobs recovered, 43 percent come from three low-wage sectors: food services, retail, and employment services (such as office clerks and sales representatives). These sectors have added 1.7 million jobs over the past two years.

However, many mid-wage industries — such as construction, manufacturing, insurance, real estate and information technology — have grown too slowly to make up for their pre-recession losses. Whereas employment has grown 8.7 percent in lower-wage occupations and by 6.6 percent in higher-wage occupations, employment in mid-wage occupations has fallen by 7.3 percent.

Specifically, the study found that:

  • Lower-wage occupations were 21 percent of recession losses, but 58 percent of recovery growth.
  • Mid-wage occupations were 60 percent of recession losses, but only 22 percent of recovery growth.
  • Higher-wage occupations were 19 percent of recession job losses, and 20 percent of recovery growth.

While 3.3 million of the 8.1 million jobs lost in the recession have now been recovered, the study notes that the imbalance of low-wage to mid-wage jobs will likely lead to greater income inequality in the U.S., should this trend continue.

The report concludes that in getting Americans back to work, policymakers should be concerned not only with the quantity but also the quality of the jobs recovered.

Sources:

Data Brief. “The Low-Wage Recovery and Growing Inequality.” National Employment Law Project. August 2012. http://www.nelp.org/page/-/Job_Creation/LowWageRecovery2012.pdf?nocdn=1

Plumer, Brad. “Low wage jobs are dominating the U.S. Recovery.” WashingtonPost.com. Aug. 31, 2012. http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/08/31/low-wage-jobs-are-dominating-the-u-s-recovery/#comments

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