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NELP: Majority of job growth continues to be in lower-wage occupations

July 27th, 2011  |  Connie Eyer

A survey published in February 2011 by the National Employment Law Project (NELP), which found a “striking imbalance” between the where the recession’s job losses occurred and where the growth of the previous 12 months was located, specifically found that:

  • Lower-wage industries constituted 23 percent of job loss, but fully 49 percent of recent growth
  • Mid-wage industries constituted 36 percent of job loss, and 37 percent of recent growth, and  
  • Higher-wage industries constituted 40 percent of job loss, but only 14 percent of recent growth

Finding that some of these trends are specific to the causes of the Great Recession (the collapse of the housing bubble and the financial crash), while others reflect long-standing shifts in the economy (such as the overall decline of manufacturing), as well as standard cyclical behavior (such as the surge in temporary jobs early in recoveries), NELP noted that for unemployed workers, as well as for those seeking to move up in the labor market or entering it for the first time, the current distribution of job opportunities has deteriorated, compared to before the recession.

July report confirms continuation of trend.  Much to no one’s surprise, an update to that survey published this month finds that  employment growth has been concentrated in lower-wage occupations, with minimal growth in mid-wage occupations and net losses in higher-wage occupations. From the first quarter of 2010 through the first quarter of 2011, lower-wage occupations grew by 3.2 percent, with retail salespersons, office clerks, cashiers, food preparation workers and stock clerks topping the list. Mid-wage occupations grew by only 1.2 percent and higher-wage occupations declined by 1.2 percent.  NELP notes that:

  • The net result is that the current U.S. jobs deficit is not evenly distributed. It is largest among mid-wage occupations (8.4 percent below pre-recession employment), compared to higher-wage occupations (4.1 percent below pre-recession employment) and lower-wage occupations (0.3 percent below pre-recession employment).
  • In addition, workers’ real wages have shown no growth since the start of the recession. Of greatest concern, workers in lower-wage occupations have seen a significant 2.3 percent decline in real wages – precisely the occupations that are generating the bulk of recovery employment growth.
  • Even before the Great Recession, the U.S. labor market was already seeing inadequate growth in mid-wage occupations. From the first quarter of 2001 to the first quarter of 2008, lower-wage and higher-wage occupations saw significantly higher net employment growth than did mid-wage occupations.

 NELP also emphasized that it is too early in the recovery to predict whether these trends will continue, but believes that the dominant growth in lower-wage occupations suggests that at the very least, workers currently navigating the U.S. labor market are facing a significant good jobs deficit due not only to the Great Recession, but also from a legacy of years of inadequate growth in mid-wage jobs well before the recession began.