Six years after the Great Recession began, job growth has returned to is original peak level. But the kinds of jobs that have been added don’t pay well. Low-wage jobs have accounted for most of the employment growth even though they weren’t the majority of jobs lost during the recession, according to a new report from the National Employment Law Project (NELP).
Four years into the recovery, low-wage industries have accounted for 44 percent of job growth, but they only made up 22 percent of the losses during the recession. These jobs pay between $9.48 and $13.33 an hour — even that higher wage is only about $27,000 a year. At the same time, mid-wage industries saw 37 percent of the job losses but have only made up about a quarter of employment growth. High-wage industries accounted for 41 percent of the losses but have only seen 30 percent of the recovery’s gains. In all, low-wage industries employ 1.85 million more people than when the recession began, while the other two groups have lost nearly 2 million jobs.
A big part of this trend is that job growth has been strongest in industries like retail, food service, and temp jobs. They have accounted for about 40 percent of private sector employment for the past four years, but they all tend to pay poorly. Meanwhile, typically blue-collar jobs haven’t kept pace: Construction jobs are still 20 percent below their previous peak and non-durable manufacturing jobs are 11 percent below peak. Transportation and warehousing jobs have just barely caught up. And while NELP’s report focuses on the private sector, it notes that the public sector has been decimated by job loss: government jobs have declined by 627,000 during the recovery, with 44 percent of those losses felt by teachers.
These trends differ from employment growth after the 2001 recession, according to the latest NELP report, when low-wage job gains were about matched by high-wage jobs.
The latest report continues a trend first spotted early on: a similar report in 2012 also found low-wage industries leading job growth despite making up a smaller share of job losses. Another report in 2013 found that about half of the jobs created had been low-paying. Even as employment is now getting back to normal levels, this trend has continued. And it’s expected to keep going, as a report found that more than a quarter of Americans will be in low-wage work over the next decade, making less than $11 an hour.
Overall, Americans have long lost out on better wages even as they work harder. The last decade has brought stagnant or falling pay. Yet productivity has more than doubled since 1968, and if the minimum wage had kept pace with that growth, it would be nearly $22 an hour, not the current level of $7.25.