We now have hard evidence of what we have been seeing on an anecdotal basis as the anemic economic “recovery” continues to muddle forward: The workers who lost their jobs in the Great Recession are entering a job market in which the new jobs being created are at significantly lower wages.
The National Employment Law Project has released a report that looks at the 630,000 private-sector jobs created between December 2009 and July 2010 and compares them to the jobs that have been lost since December 2007. What that report shows is an economy that is for the most part continues to shed high-wage jobs, replacing them with mid-to-low-wage jobs.
“Of the net job loss during 2008-2009, about a third (35 percent) occurred in industries paying below $15 an hour. But during 2010, those industries accounted for 76 percent of net job growth,” the report says. “By contrast, industries paying above $17.43 an hour contributed close to half (48 percent) of net job losses in 2008 -2009, but barely contributed net job growth in 2010 (5 percent).”
The job categories that have suffered the greatest losses since 2007, and which continue to suffer losses in 2010, are construction; finance and insurance; information; real estate, and rental and leasing; professional and technical services; and utilities. Median hourly wages in these job sectors range from $15.06 an hour (rental and real estate) to $28.80 an hour (utilities).
Meanwhile, the highest median hourly wage among recovering job categories is management, at $26.48 an hour. But the economy created only 4,000 of those jobs since December 2009 (and lost 79,000 in the two years prior). Other than management, the median wage of newly created jobs ranges from $22.84 (for hospital workers) to $8.92 (food services and drinking places). In the category in which the most jobs were created—administrative and support and waste management and remedial services—the median wage is $12.76. In the category where the most jobs were lost, construction, the median wage was $19.24.
The report identifies what it calls a “sobering” and “challenging” trend: “the disproportionate growth in mid- and especially lower-wage industries on the one hand, and the weak growth and even continued losses in higher-wage industries on the other.”
Overall, the job categories that saw a net decline in the number of jobs since December 2009 on average paid a median wage of $22.43. The new jobs that were created in that same period paid on average 29 percent less.
The pattern we’re seeing now could change, the report notes. For example, in past recessions employees were brought on through temp service agencies at relatively low wages before being hired as full-time workers as the economic recovery picked up steam.
But this is looking less and less like past recessions—in part because when the White House and Congress had an opportunity to enact bold programs that inject massive amounts of public and private money into economic recovery, conservative obstruction was allowed to neuter most of the policies. The result was a Recovery Act that ended up appearing insufficient to jump-start private sector job creation and Wall Street not lending cash to businesses that could use it to create new domestic jobs.
When Congress returns to Washington later this month, it will have to face this issue squarely. As much as the public is wary of government spending, polls show they are even more wary of government impotence in the face of a continuing economic crisis for the middle class. So Congress should work on a multifaceted jobs strategy: Stop the hemorrhaging of state and local public service jobs through a Local Jobs for America Act. Promote the creation of high-wage manufacturing and construction jobs through a robust series of “Make It In America” policies, infrastructure investments and green energy initiatives. Make the case that simply showering multimillionaires with tax cuts failed to lift living standards for the middle class before the Great Recession and will fail to do so again. Ensure that in trade agreements we are fighting as hard for the interests of American workers as other countries fight for their workers.
“In the long term, these data underscore that as the nation’s recovery from the Great Recession continues, it will be critical that both the public and policy makers are squarely focused on the core question of what kind of economy we are rebuilding for America’s working families,” the NELP report concludes. “If we continue to see disproportionate growth in the bottom half of the job distribution, then we will be facing a cementing of the growing inequality and polarization of opportunity that has characterized the past three decades of economic restructuring in the U.S.”