Tags: Low | wage | job | growth

Study: Low-Wage Sectors Account for 41 Percent of Job Growth

Tuesday, 19 Aug 2014 08:32 PM

By Dan Weil

While non-farm payrolls have risen more than 200,000 for six months in a row, the longest such streak in 17 years, the picture isn't so rosy beneath the surface, according to a new report from the National Employment Law Project (NELP). 

The study shows that low-wage industries accounted for 41 percent of job growth in the 12 months through July. That compares to 33 percent for high-wage jobs and 26 percent for mid-wage jobs.

The number of jobs in mid- and high-wage sectors has dropped by 1.2 million since 2007, while jobs in low-wage sectors have increased by 2.3 million 

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Real median hourly wages dropped 3.4 percent from 2009 to 2013, with low- and mid-wage sectors falling more than high-wage sectors. 

Still, things may be improving. "It's promising to see, the last six months, how job growth in higher-wage industries is kind of on par with the job growth in lower-wage industries," NELP policy analyst Claire McKenna told CNBC.com.

"But it's really hard to tell whether it will continue. There are a lot of other indicators that suggest there's still a lot of labor market slack."

Meanwhile, many economists are concerned about the labor-force participation rate, which hit a 36-year low earlier this year and stood at only 62.9 percent in July.

That's a big problem for the economy, says Ravi Balakrishnan, deputy chief of the IMF's North American division. "It's not supposed to be this way," he writes on The Huffington Post. "As the U.S. economy recovers, hirings increase and people are encouraged to look for jobs again."

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