The Low-Wage Recovery

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Rank: Neanderthal | 2,463

A lot has been said about the employment situation over the past few months leading up into this election. Even Bernanke said today that the Fed lacked the tools to fully address unemployment going forward, although he will surely do all he can to effect it. Ran across a survey the other day at work done by the NELP which was actually pretty interesting. Here are some numbers about job recovery in the past few years:

  • Lower-wage occupations were 21 percent of recession losses, but 58 percent of recovery growth.
  • Mid-wage occupations were 60 percent of recession losses, but only 22 percent of recovery growth.
  • Higher-wage occupations were 19 percent of recession job losses, and 20 percent of recovery growth.
  • Since 2001, mid paying jobs fell by 7.3%, whereas Low and High paying have gained 8.7 and 6.6% respecitvely.

Now, all of that is actually pretty interesting but really supports the commonly talked about destruction of the middle class in this country. Going further, the study looked at workforce trends coming in and out of the 'recession'. One of the more interesting passages:

Steep losses in construction, FIRE (finance, insurance and real estate), and manufacturing during the recession created a large deficit in mid-wage occupations. These industries are not showing enough growth, and especially in the case of construction, are unlikely to get back to pre-recession levels any time soon. There has also been a long-term and continuing decline in the information sector, contributing to the deficit of higher-wage jobs. Finally, deep cuts in state and local government during the recovery (a loss of 485,000 jobs since February 2010) occurred largely in mid- and higher-wage jobs.

As a note, Middle Wage jobs were considered to be from $13.84 to $21.13 per hour.Do you guys have any reactions to this? Are we too focused on quantity over quality or are those middle paying jobs simply not coming back? Is this a new normal trend in employment markets?

Comments (34)

Sep 14, 2012

With QE3, everyone will be earning $1000/hour and we will all be millionaires.

Sep 14, 2012

at what salary point is considered low, mid and high?

Sep 14, 2012
ST Monkey:

at what salary point is considered low, mid and high?

opps, I just read the last part of the article. wow, never thought middle income is this low.

Sep 14, 2012

The thing that scares me the most about that last massive whiff on a jobs number is that some uninformed people may believe the move from 8.3% to 8.1% was an accomplishment for Obama when in reality it was anything but that with all these clowns dropping out of the job hunt.

The way we calculate the unemployment rate is so moronic to me. Why can't we get the real number?! My guess is that if you counted in all the people who have stop looking for jobs and the underemployed it could be around 15% in the US.

Pretty soon every kid coming out of school with a degree that isn't a hard science and/or from a top school will be working a $12/hour job. Get your popcorn ready for the student loan bubble to burst.

    • 1
Sep 14, 2012
adapt or die:

Why can't we get the real number?!

The real number is the labor participation rate.

http://data.bls.gov/timeseries/LNS11300000/
Someone tell me how we are going to support ever-increasing liabilities on the backs of a shrinking number of wage earners?

Sep 14, 2012
illiniPride:
adapt or die:

Why can't we get the real number?!

The real number is the labor participation rate.

http://data.bls.gov/timeseries/LNS11300000/
Someone tell me how we are going to support ever-increasing liabilities on the backs of a shrinking number of wage earners?

Inflation to pay our debts and socialism/fascism to keep the sheep in line. Given the US gun ownership rates, size of the military and general aversion to socialism, my money is on jack boots and billy clubs.

Sep 14, 2012
illiniPride:
adapt or die:

Why can't we get the real number?!

The real number is the labor participation rate.

http://data.bls.gov/timeseries/LNS11300000/
Someone tell me how we are going to support ever-increasing liabilities on the backs of a shrinking number of wage earners?

That's an interesting stat. Having never checked that before I would have thought the participation rate would be a little higher maybe like high 70's.

So there needs to be a better way to correctly quantify the unemployment rate is my point because the calculation we are using currently is not an insightful metric.

Sep 14, 2012
adapt or die:

The way we calculate the unemployment rate is so moronic to me. Why can't we get the real number?! My guess is that if you counted in all the people who have stop looking for jobs and the underemployed it could be around 15% in the US.

14.7% in August 2012 -- http://www.bls.gov/news.release/empsit.t15.htm

    • 1
Sep 14, 2012
olafenizer:
adapt or die:

The way we calculate the unemployment rate is so moronic to me. Why can't we get the real number?! My guess is that if you counted in all the people who have stop looking for jobs and the underemployed it could be around 15% in the US.

14.7% in August 2012 -- http://www.bls.gov/news.release/empsit.t15.htm

Thanks dude, +1 for making me look good

Sep 14, 2012

So middle wage jobs are between 30-45k let's say.

Low wage jobs translates into low skill jobs - your typical retail/fast food/random service type positions.
The people with the middle tier jobs likely less education, but know a trade (construction, book keeping, something like that)
The higher wage positions reflect someone with a college education, or specialized training (IT people, jet engine mechanics).

At the same time, most of the jobs that are out there that pay in this middle band, people are not trained or have transferable enough skills to do. There are jobs out there, but it seems people are unwilling to obtain new skills, unable to do so, or unable/unwilling to relocate. Just last night I was thinking about the book, "Grapes of Wrath" (friend is driving cross-country) that discusses the dust bowl and it's effects on mass migration. This happened several times in American history when economic struggles were present. There was always some new opportunity in a new place for people who wanted to work hard. But, even for those migrants, times were tough until jobs related to WWII sprang up.

Sadly, I don't think it's enough to just work hard anymore, you also have to be highly skilled. True, there are places like North Dakota that you could probably go to right now and get a job, but opportunities like this are scarce. As a result of labor laws that (correctly) let less skilled workers work in safe conditions and earn a decent salary (those middle income jobs), the result is a lot of these positions being shipped overseas to places where cost of living is either cheaper, or the labor laws are less strict.

Therefore, the answer is for people, even those in their 40s and 50s, to somehow get new job skills. Clearly, this is not a quick fix, but I think it is the only fix. There are a myriad of programs out there to help people, but it is a matter of people both knowing about them, and having the guts to give up on the industry that employed them for so long, which is admittedly extremely difficult. If the job you were trained to do does not have openings or does not exist, the only other job you are qualified for is something low wage. This explains the data.

Sep 14, 2012

Well the #s clearly showing how ppl are taking wage cuts to be able to work thus middle wage lost the most and low wage gained. I mean i can't see Mcdonald and Walmart doubling their job openings creating a shit ton of low ages but i can see firms that used to hire full times start hiring temps and part timers as employers have leverage in this market and can low ball the fuck outta you.

Best Response
Sep 14, 2012

The people most impacted by this recession are high school graduated or less. Low skilled manufacturing is dead in this country and construction work is well paying and requires labor (can't be outsourced). With the housing crisis slowing/stopping construction the people without an education and/or skill we out of work.

Hence the bifurcated unemployment stats (high for uneducated/low for educated). These people are doing 2 things.

1) Hoping for a rebound, running out their unemployment

2) When this happens either taking a shitty job or going on disability.

Hence low labor participation, declining unemployment and an increase in disability claims.

We need to pay people to not have kids or ban farm machines. If you eliminate machines you can have full employment. Plain fact is we don't need a large, unskilled labor pool right now. If anything these people need to learn a trade, welding, anything. Semi skilled/skilled manufacturing is where the future lies for labor.

Sep 14, 2012
TNA:

The people most impacted by this recession are high school graduated or less. Low skilled manufacturing is dead in this country and construction work is well paying and requires labor (can't be outsourced). With the housing crisis slowing/stopping construction the people without an education and/or skill we out of work.

Hence the bifurcated unemployment stats (high for uneducated/low for educated). These people are doing 2 things.

1) Hoping for a rebound, running out their unemployment

2) When this happens either taking a shitty job or going on disability.

Hence low labor participation, declining unemployment and an increase in disability claims.

We need to pay people to not have kids or ban farm machines. If you eliminate machines you can have full employment. Plain fact is we don't need a large, unskilled labor pool right now. If anything these people need to learn a trade, welding, anything. Semi skilled/skilled manufacturing is where the future lies for labor.

Good (albeit depressing) summary. SB

Sep 14, 2012

It may be a stretch, but maybe it's a good time for universities to begin investing in full-scale programs that encourage self-started businesses? Instead of the traditional platform of launching more job-seekers into an already crowded market.

Baby you're the perfect shape, baby you're the perfect weight. Treat me like my birthday, I want it this way and I want it that way. It makes a man feel good baby.

Sep 14, 2012
R0bin:

It may be a stretch, but maybe it's a good time for universities to begin investing in full-scale programs that encourage self-started businesses? Instead of the traditional platform of launching more job-seekers into an already crowded market.

Problem being is that besides ivy leagues, most colleges are having financial problems themselves especially state schools

Sep 14, 2012

So, $22/hr is considered a high wage? I really need to gtfo of NY.

Sep 14, 2012

~$46K per year for one person. Throw a wife making $30-$40K and you have a solid income for middle America. Especially considering $50K is a 50% mark for household income.

Sep 14, 2012

58% of recovery gains were sub-$13.84 / hour jobs? That's just depressing. If you guys have friends in these low paying jobs, you know that getting 40 hours a week is a rarity. The hours are often so irregular that you can't simply take another job.

I can see why people live drop out of the labor force at these wage levels. It's rational to live on handouts if you will make only marginally more working.

I hate to bring up education here, but there really is a mismatch between the skills of younger workers and the jobs available. How many of your high school friends went to a trade school? How many went to a terrible college, then either majored in something useless or dropped out?

Sep 14, 2012

You guys have to get out of major cities. My buddy back home works 40 hours a week at a factor tearing down machines and pulls in like $10 bucks an hour. He isn't living high off the hog, but he has 3 cars, a $10k ATV, and a bunch of other shit.

You can't raise a family off that, but you can live ok. I mean shit, that is probably $1500 take home after taxes. Maybe a little less. A while back I split a really nice apt in center city philly for $600 a month. That leave $900 to piss away, assuming no overtime or a second job. Not ballin' like anyone on here would want.

Sep 14, 2012
TNA:

You guys have to get out of major cities. My buddy back home works 40 hours a week at a factor tearing down machines and pulls in like $10 bucks an hour. He isn't living high off the hog, but he has 3 cars, a $10k ATV, and a bunch of other shit.

You can't raise a family off that, but you can live ok. I mean shit, that is probably $1500 take home after taxes. Maybe a little less. A while back I split a really nice apt in center city philly for $600 a month. That leave $900 to piss away, assuming no overtime or a second job. Not ballin' like anyone on here would want.

Not bullshitting you, my electric bill was about $750 last month. $1,500 per month in income might be an issue.

Sep 14, 2012

Dude, where the F do you live? In the winter my electric bill is ~$60 bucks and I live in a loft.

Sep 14, 2012

I like it really cold...A/C to the max in August.

Sep 14, 2012

Haha, I reiterate, where the hell you livin' bro ha. I cryofreeze myself and get $100 bill. Man, I suppose there are some small benefits to living in Killadelphia.

Sep 14, 2012
TNA:

Haha, I reiterate, where the hell you livin' bro ha. I cryofreeze myself and get $100 bill. Man, I suppose there are some small benefits to living in Killadelphia.

NYC suburb.

Sep 15, 2012
SirTradesaLot:
TNA:

Haha, I reiterate, where the hell you livin' bro ha. I cryofreeze myself and get $100 bill. Man, I suppose there are some small benefits to living in Killadelphia.

NYC suburb.

SirTradesaLot,

Do you keep your AC on the whole time? I just run it at nights for two hours or so. When at work I don't care that my apt. is hot. $750 a month in electricity is high. You should be making big bank for that kind of expense. Good for you.

Sep 14, 2012

duplicate.

Sep 14, 2012
Comment
Sep 15, 2012

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