America’s jobs recovery has been driven by low-wage employment.
That’s the conclusion of a new report that confirms what have been recurring themes in economic news lately: growing inequality and middle-class erosion. Our colleague Ryan McCarthy summed it up nicely this morning: “We’re now nearly back to pre-recession employment levels, but we are decidedly not back to pre-recession employment quality.” There was a big imbalance between the jobs lost and the jobs recovered.*
While the report, by the National Employment Law Project, focuses on private-sector employment, one of the figures in the report (pasted above) highlights a related trend: As the nation gained low-wage jobs, many middle- to high-wage government jobs were cut.
“[G]overnment employment actually declined by 627,000 over the recovery period,” the authors report, citing federal statistics. “Education at the local level accounted for 44 percent of job losses across government entities.”
Federal, state and local governments were among only a handful of well-paying industries that shrank during the recovery (represented by the bubbles to the left of the vertical line in the figure above). Many might consider those cuts necessary, but they certainly contributed to the trend behind America’s low-wage recovery.
* Low-wage jobs accounted for 22 percent of job losses during the recession, but 44 percent of jobs recovered. High-wage jobs, on the other hand, accounted for 41 percent of losses, but 30 percent of growth. (Middle-wage jobs tracked similarly to high-wage ones.)