WASHINGTON (MarketWatch) — Higher-wage industries have been lagging when it comes to private job creation, according to a new report from a worker advocacy group.
Higher-wage industries constitute 14% of recent private-job growth, though they accounted for 40% of private job losses during the labor-market’s downturn, according to the report from the New York-based National Employment Law Project. Meanwhile, lower-wage industries are responsible for 49% of recent growth, compared with 23% of losses, while midrange-wage industries constitute 37% of growth, compared with 36% of losses.
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“These findings do suggest that for unemployed workers, as well as for those seeking to move up in the labor market or entering it for the first time, the current distribution of job opportunities has deteriorated, compared to before the recession,” according to the report.
During the labor market’s downturn — the economy started losing private jobs in early 2008 and growth resumed in early 2010 — almost 9 million positions disappeared. While the economy has gained more than 1 million private jobs in the 12 months through January, the gains have been skewed toward mid- and lower-wage industries, according to NELP.
“The bottom-heavy growth in industries like temporary employment services, restaurants, retail, and nursing and residential care facilities, which pay median wages below $13 an hour, suggests that workers are not only encountering fewer job opportunities — they may also be seeing fewer well-paying jobs than before the recession,” according to NELP.
NELP’s findings make sense, said Heidi Shierholz, an economist at the Economic Policy Institute.
“Until a robust jobs recovery takes hold, the first jobs to come back are typically jobs with lower wages,” Shierholz said. “One thing I’m really worried about is the fact that persistent high unemployment is going to put broad downward pressure on wages and job quality for a long time.”
However, NELP noted that industries contain a wide range of occupations, which have different wages. Further, it’s too early to know whether the trends highlighted in the report will persist.
The government reported meager job gains for January. But Wall Street is expecting a stronger report for February, forecasting an increase of about 170,000 nonfarm payrolls.See economic calendar.
While broad industry measures can be crude, economist Larry Katz of Harvard University said there is a long way to go before labor market prospects will look good for job seekers.
“This so-called recovery remains quite weak in the job market without signs yet of sustained job growth in higher-wage industries,” Katz said.
For higher-paying industries, median wages range from about $19 to $31, compared with $13 to $19 for mid-wage industries, and $9 to $13 for lower-wage industries, according to NELP. Examples of a few higher-paying industries are professional, scientific and technical services, as well as management of companies and enterprises. Examples of lower-paying industries are social assistance and food services.
Some of the results are typical for early recoveries, such as gains in temp work, while there is also evidence of longer-term changes, such as the decline of manufacturing, noted NELP. The financial turmoil that contributed to the recession is behind some of the poor growth in higher-wage industries, the report added.
Here are a few industries with major changes in the past year, according to NELP:
Administrative and support and waste management and remediation services represented 21% of growth, thanks to temporary hiring. The median wage is about $13.
Durable manufacturing accounted for 13% of growth, led by auto manufacturing, fabricated metal products, and machinery, though employment is below pre-recession levels. The median wage is about $20.
Ambulatory health-care services were 10% of growth, thanks to home health-care services, doctor’s offices and outpatient clinics. The median wage is about $18.
Retail trade was 6% of growth, and food services and drinking places were 7%. The median wage is about $11.
Construction represented 38% of employment losses. The median wage is about $19.
Non-durable manufacturing was 19% of employment losses, part of a long-term decline. The median wage is about $17.
Information was 16% of losses, also part of a long-term trend. The median wage is about $24.
Finance and insurance were 10% of losses, and the sector’s employment is back at its 2000 level. The median wage is about $21.
Ruth Mantell is a MarketWatch reporter based in Washington.
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