The Sluggish Recovery Continues: Lower-Wage Industries Lead First 12 Months of Private Jobs Growth

As we’ve been regularly noting every month with the release of BLS employment data, the number of jobs added to the economy during the past year has been pretty dismal when compared to the Great Recession’s magnitude of job loss and unemployment.  Millions are currently struggling with fewer job opportunities than ever before.  At the same time, there’s even more sobering news: our new analysis shows that the “recovery” has generated job opportunities over the past year – numbering slightly over one million in the private sector – that have been disproportionately available in mid- and lower-wage industries.

This bottom-heavy jobs growth has been apparent in industries like temporary employment services, restaurants, retail, and nursing and residential care facilities – all of which pay median wages below $13 an hour.  Such imbalanced job growth undeniably makes it much harder for workers to find family-supporting jobs, and poses real obstacles to true economic recovery.

This imbalance becomes even more evident when we compare the wages of jobs lost during the Great Recession to those that we gained over the past year.  About 40 percent of jobs lost during the recession, for example, were from higher-wage industries – such as finance and construction.  But, growth in these higher-wage industries constituted only 14 percent of the overall growth we’ve seen over the twelve months.  Taken together, these two trends – heavy loss of jobs in higher-wage industries, and subsequent growth of jobs primarily concentrated in lower- to mid-range industries – suggest that the opportunities available to those out of work (or those looking to move into better jobs) have so far deteriorated significantly:

  • Lower-wage industries constituted 23 percent of job loss during the Great Recession, but 49 percent of growth over the past year;
  • 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.

Jobs_Figure2

This wasn’t our experience in the period following the 2001 recession, which, like the past year, was also dubbed a “jobless” recovery.  Following the 2001 recession, for example, after a year’s worth of job growth, the private sector had recovered almost half (47 percent) of the jobs it had lost. Among these recovered jobs, nearly one-third were in higher-wage industries.  By contrast, we’ve currently only recovered about 14 percent of the jobs we’ve lost, with growth skewed towards the lower end of the wage scale.

It’s too early to tell if these trends will continue – but they unquestionably underscore the need to create new, good-paying jobs, and to demand that our elected officials focus on the essential issue of rebuilding an economy that works for working families.

Click here for a copy of “A Year of Unbalanced Growth:  Industries, Wages, and the First 12 Months of Job Growth After the Great Recession.”   

This study is a follow-up from a similar analysis done in August. Click here for “Where the Jobs Are: A First Look at Private Industry Job Growth and Wages in 2010.”

 

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