Most of the Recovery is Happening in Low-Wage Jobs

Joseph Stubblebine
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According to a recent report by the National Employment Law Project, economic recovery has come at the cost of fewer high-paying jobs. The report finds that most of the employment growth has occurred in the service sector, where there is a surplus of low-wage jobs. Learn more about this important issue to find out if these changes to the job market will have an affect on your career outlook.

According to Time Magazine, employment rates have reached levels that are similar to the levels seen before the start of the recession in 2008. This indicates the economic recovery has finally reached the point of offsetting the worst recession since the Great Depression. However, the economy has leveled out primarily because low-wage jobs are on the rise.

The National Employment Law Project report finds that approximately two million low-wage jobs were lost in the recession. However, low-paying jobs represent 44 percent of jobs recovered since the recession. This means there are nearly two million more low-wage jobs than there were before the recession hit. Compared to low-wage jobs, 41 percent of high-paying positions were lost in the recession, but only 30 percent have been recovered. Likewise, 37 percent of mid-level jobs were eliminated during the recession, but only 26 percent of mid-level positions have been recovered.

Industry experts have explained how the growth of low-paying jobs is partly caused by growth in the food and beverage industry. In addition, local government jobs have been declining since the recession began. There are approximately 627,000 fewer positions than before the recession. Most of these local government jobs are considered to be mid- and high-paying positions.

The good news regarding the growth of low-wage jobs is that the federal minimum wage is expected to rise despite the fact that the federal minimum wage has remained largely unchanged since 2008 when the recession began. Although a proposed bill to raise the federal minimum wage to $10.10 was recently struck down in the Senate, the solid support for the bill signals more attention is being paid to increasing the federal minimum wage.

On the other hand, state-level minimum wages have steadily increased despite the federal baseline minimum wage remaining the same. Several states have minimum wages well above the federal baseline. In fact, the city councils of SeaTac, Wash., and Los Angeles, Calif., are currently evaluating increasing the minimum wage to $15 and $15.37, respectively. However, until there is federal legislation that raises the minimum wage in all states, low-paying jobs will remain just that.

Although some economic experts are hopeful regarding the outlook for low-wage employment, current job seekers are faced with many positions that pay less than before the recession began. The decrease in mid- and high-paying jobs means there is also more competition for sought-after positions, making it harder for recent college graduates and job seekers with limited employment experience to secure decent-paying jobs.

The reality is employment growth has resulted in a decrease of mid- and high-paying jobs, and an increase in low-wage jobs. If you are a current job seeker, this affects your odds of securing a job that has growth potential and provides a sufficient wage. However, if federal- and state-level minimum wages significantly increase in the near future, all workers in low-wage industries will benefit.

 

(Photo courtesy of suphakit73 / freedigitalphotos.net)

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