Even though low-wage jobs are becoming an increasingly large share of the economy, the compensation for those workers has fallen even more rapidly than for better paid jobs, a new report released on Tuesday by the National Employment Law Project shows.
Between 2009 and 2012, wages fell by 2.8 percent for all occupations, even though productivity actually increased by 4.5 percent — meaning workers were producing more goods and services but earning less. But most of that decline was felt at the bottom rungs. Real median wages fell by 5 percent or more in five of the top ten low-wage jobs: restaurant cooks, food preparation workers, home health aides, personal care aides, and maids and housekeepers. Overall, pay for jobs in the bottom three quintiles dropped by 3 percent or more, while those in the top two quintiles declined by less than 2 percent on average — while nearly a third actually saw wage growth.
Low-wage jobs have been the majority of those added since the recovery began, replacing the middle class jobs that were lost in the recession. They accounted for 62 percent of the jobs added in June and overall have amounted to about half of those created since 2009.
Meanwhile, the minimum wage hasn’t been raised in nearly five years, leading to increasing income inequality as executive pay has far outpaced that of workers. President Obama has proposed raising it to $9 from the current $7.25. If it had kept pace with inflation since 1968, it would actually be closer to $10.50 an hour.