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Saturday, December 10, 2016

Report: Lower-Wage Jobs Continue To Grow, Mid- And Higher-Wage Jobs Lag Behind

Report: Lower-Wage Jobs Continue To Grow, Mid- And Higher-Wage Jobs Lag Behind

A new report by the National Employment Law Project reveals the slow and ongoing jobs recovery that the private sector has experienced since the 2008 recession, and underscores the notion that an economic recovery has not yet been fully achieved.

As the NELP report notes, in the months leading up to the 2008 financial crisis and the months that immediately followed, “employment losses occurred throughout the economy, but were concentrated in mid-wage and higher-wage industries.” Specifically, 3,579 higher-wage private sector jobs were lost at the time of the crisis, accounting for an overwhelming 41 percent of total job losses. An additional 3,240 mid-wage private sector jobs — accounting for 37 percent of the total losses — were lost at the same time.

Significantly fewer low-wage jobs, however, were lost during the same period. NELP reports only 1,973 lost lower-wage jobs in 2008 – accounting for 22 percent of job losses during the Great Recession.

Since 2008, private-sector employment has experienced job growth in all three wage industries — but low-wage industries have seen the greatest, and quickest, recovery.

According to the NELP report, lower-wage industries — which employ 1.85 million more workers today than at the start of the 2008 recession — now account for 44 percent of the jobs gained since 2009.

Higher-wage industries now account for only 30 percent of job gains since 2009, despite accounting for the highest number of lost jobs. Mid-wage industries are experiencing the slowest recovery, comprising only 26 percent of the job gains made over the past four years.

In total, there are now 2 million fewer jobs in mid- and higher-wage industries than there were prior to the recession.

NELP explains that in 2009, slow economic growth could be attributed to “specific drivers of the Great Recession” — such as the housing bubble collapse and the financial crisis “as well as a continuation of the long-term decline in durable and nondurable manufacturing and telecommunications.” Consequently, lower-wage industries, like the foodservice industry, were less affected by the complex factors that contributed to the financial crisis and overall recession than their better-paid counterparts.

While lower-wage industries recover, though, higher-wage and mid-wage industries’ slow job gains have larger, negative implications that lower-wage jobs growth cannot reverse or counter. Hence, even as mid- and higher-wage industries continue to create and add jobs, the rate is not fast enough to fill overall employment deficits.

Though these latest numbers serve as further evidence that a full economic recovery is still a few years away, they also offer a silver lining; according to NELP, “private-sector employment has increased for 49 months,” resulting in employment levels finally reaching their previous peak — which was just before the 2008 economic crisis. Moreover, this recovery has not only been quicker than that which occurred following the 2001 recession, but it has also resulted in stronger employment gains in the private sector.

And despite the slow pace of its recovery, the private sector is still responsible for all employment growth since 2009. As private sector industries have steadily added jobs, the public sector has continued to report job losses. NELP reports that government employment declined by 627,000 jobs over the past four years — a loss that made it more difficult for the private sector to add more jobs during the recovery period.

Ultimately, NELP concludes that a pattern exists, as evidenced by the 2001 and 2008 crises and the subsequent recoveries: When the labor market suffers, mid- and higher-wage industries are hit hardest. And as the economy recovers, the lower-wage industries recover more quickly.

Chart via National Employment Law Project

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