Low Wage Job Growth
Even before the recession, our economy was shifting, with fewer and fewer middle-class jobs, and a growing low-wage workforce. The recession and tepid recovery have only accelerated this shift. While net job losses in 2008-2009 were widely distributed and included significant losses in higher-wage industries, new job growth in 2010 and 2011 has been driven disproportionately by industries with median wages below $15 per hour.
Because the minimum wage sets pay scales in low-wage industries, this shift means that the minimum wage will play a growing a role in shaping wages across our economy.
An August 2012 report by the National Employment Law Project shows that job creation since the end of the recession has been concentrated in low-wage industries:
- Lower-wage occupations constituted 21 percent of recession losses, but 58 percent of recovery growth.
- Mid-wage occupations constituted 60 percent of recession losses, but only 22 percent of recovery growth.
- Higher-wage occupations constituted 19 percent of recession job losses, and 20 percent of recovery growth.
The U.S. labor market was already in trouble before the Great Recession, the result of 30 years of growing wage inequality and shrinking numbers of good jobs (see the recent CEPR report). But the twin trends described here – mid-wage occupations experiencing the biggest losses during the recession, and lower-wage occupations growing the most during the recovery – have only exacerbated the growth in inequality.
- Since the first quarter of 2001, employment has grown by 8.7 percent in lower-wage occupations and by 6.6 percent in higher-wage occupations.
- By contrast, employment in mid-wage occupations has declined by 7.3 percent since the first quarter of 2001.