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Study Shows Most of Economic "Recovery" is in Low-Wage Jobs

Created: 11 August, 2014
Updated: 15 October, 2022
2 min read

In June 2014, the government announced that all of the jobs that were lost during the Great Recession have been recovered. Since then, we have had a net growth of jobs higher than pre-recession levels. However, the question remains as to whether the jobs that are being created are of the same caliber as those we lost.

According to a report from the National Employment Law Project (NELP)

By these numbers, lower-wage jobs are the bulk of the recovery. These are jobs that have median hourly wages between $7.69 and $13.83. With wages that low, it is likely that the person has a spouse that is making better money or the person has a second job and is possibly on welfare.

And though key mid-wage and higher-wage industries are not growing, there are some that are growing at balanced and unbalanced levels. Some industry growth is just not enough to offset the massive loss of mid-wage jobs during the recession.

The key to this is manufacturing. Though it lost more than a million and a half jobs, it has made a strong comeback during the recovery. This also goes for transportation and warehousing, and health care has seen strong, steady growth as well.

A report from the Center for Economic Policy and Research (CEPR) indicates that the U.S. job market was already in trouble before the Great Recession as a result of growing income inequality and a shrinking number of good paying jobs. The economic recovery has only exacerbated this with the creation of even more lower-wage jobs than were lost and fewer mid-wage jobs.

Our capitalist economy is basically built on what middle-class people are buying, whether it's a new car, clothing, a vacation, etc.  Though mid-wage jobs are still recessed, the cost of things such as food, clothing, and utilities have continued to increase. This leaves people with less money to buy other necessities or the occasional splurge item and continues to keep certain parts of the economy from recovering at a faster rate.

Though our politicians may be happy to see that job growth has surpassed what we lost during the recession, they should withhold acting as though job creation is no longer the biggest issue facing our economy.

With wages still suppressed (far below the standard we lost) and basic necessities still continuing to increase in cost, it will only be a matter of time until the economy gets another jolt. It's imperative to create mid-wage and higher-wage jobs to help sustain, balance, and grow the economy.

Photo Source: Chronicle

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