New Job Means
Lower Wages for Many
Published: August 31, 2010 - New York Times
After being out of work for more than a year, Donna Ings, 47, finally landed
a job in February as a home health aide with a company in Lexington, Mass.,
earning about $10 an hour.
Chelsea Nelson, 21, started two weeks ago as a waitress at a truck stop in
Mountainburg, Ark., making around $7 or $8 an hour, depending on tips, ending a
lengthy job search that took her young family to California and back.
Both are ostensibly economic success stories, people who were able to find
work in a difficult labor market. Ms. Ings’s employer, Home Instead Senior Care, a
company with franchises across the country, has been expanding assertively. Ms.
Nelson’s restaurant, Silver Bridge Truck Stop, recently reopened and hired about
20 people last month in an area thirsty for jobs.
Both women, however, took large pay cuts from their old jobs — Ms. Ings
worked for a wholesale tuxedo distributor, Ms. Nelson was a secretary. And both
remain worried about how they will make ends meet in the long run.
With the country focused on job growth and with unemployment continuing to
hover above 9 percent, comparatively little attention has been paid to the
quality of the jobs being created and what that might say about the
opportunities available to workers when the recession finally settles. There are
reasons for concern, however, even in the early stages of a tentative recovery
that now appears to be barely wheezing along.
For years, long before the recession began, job growth had become
increasingly polarized in this country. High-paid occupations that require
significant amounts of education and training grew rapidly alongside low-wage,
service-type jobs that do not, according to David Autor, a labor economist at
the Massachusetts
Institute of Technology.
The growth of these low-wage jobs began in the 1980s, accelerated in the
1990s and began to really take off in the 2000s. Losing out in the shuffle, Dr.
Autor said, were jobs that he described as “middle-skill, middle-wage” —
entry-level white-collar positions, like office and administrative support work,
and certain blue-collar jobs, like assembly line workers and machine operators.
The recession appears to have magnified that trend, Dr. Autor wrote in a recent
paper, released jointly by the Center for American Progress, a
left-leaning policy group, and the Hamilton
Project, which has a more centrist reputation. From 2007 to 2009, the paper
said, there was relatively little net change in total employment for both
high-skill and low-skill occupations, while employment plummeted in so-called
middle-skill occupations.
A new
analysis by the National Employment Law Project, a liberal advocacy
group, takes a different approach, identifying industries that have experienced
job growth in 2010 and examining their median wages. It is a blunter measurement
because it focuses on whole industries, within which there is often great
diversity in income. Economists also cautioned that it was still too early to
know exactly which sectors would eventually lead the way in a sustained
recovery.
Nevertheless, the law project analysis offers a snapshot of where the
employment growth has been so far. It found that job expansion to this point had
been skewed toward industries with median wages that are low to middling, with a
disproportionate share of job growth happening in industries whose median wages
fell below $15 an hour.
“There’s a striking contrast so far between which industries have lost jobs
and which ones are growing,” said Annette Bernhardt, policy director for the law
project. “If this kind of bottom-heavy job creation continues, it could pose a
real challenge to restoring consumer demand and making sure working families
have a way to support themselves.”
Both studies are disquieting because of the potential import for many who had
once scratched out middle-class livings and are now looking for work. A unifying
theme is the stubborn march of labor-intensive, low-paying service jobs, like
the ones Ms. Ings and Ms. Nelson found.
There is typically a downward slide during recessions, said Till von Wachter,
a Columbia
University economist, in which higher-skilled and higher-educated workers
are re-employed first, often landing jobs for which they are overqualified,
squeezing out the lesser skilled and lesser educated. Indeed, in the current
downturn, the unemployment rate has climbed the most for the least-educated
workers, suggesting they have been hit the hardest.
However, while researching
workers who lost their jobs in California in the 1990s, Dr. Wachter found that
people who fell in the middle when it came to their educational background —
possessing high school degrees or some college — and to the skills required for
their occupation tended to experience larger and longer lasting income losses
after job loss than people on both the lower and higher end of the scale.
Ms. Ings had worked in a variety of office and administrative roles in the
wholesale tuxedo industry. Her wages of just over $16 an hour were enough to
build a relatively comfortable life for her and her daughter, Jillian, now 21
and in college.
“During her whole growing up, I never got child support,” Ms. Ings said. “I
always had to try to find a job that paid well to help support her. That’s my
job, being a mother.”
When Ms. Ings was laid off in March 2009, she dove into finding another
“corporate job.” But she found that nearly everyone seemed to be looking for
people with at least a college degree, if not more. She had only a high school
diploma.
As a teenager, Ms. Ings had worked in a nursing home and enjoyed it. So,
after getting her certified nursing assistant license, she applied at the Home Instead office
in Lexington, which has been steadily hiring, said Jack Cross, the franchise
owner. Nationally, the company has created more than 2,400 jobs this year, and
home health aides are one of the country’s fastest growing occupations.
Ms. Ings adores her job, but her finances remain taut, even though she is
working 50 hours a week. She had been without health insurance for her first few
months, but soon the company will begin deducting for it — a further pinch on
her already meager paycheck.
“I’m going to be coming home with nothing,” she said.
In Arkansas, Ms. Nelson has been hampered by her decision several years ago
to quit college after a semester. She has worked a variety of jobs, including a
three-year stint as a secretary, earning about $12 an hour.
Last year, she and her husband, Kenneth, and their son, Riley, now almost 2,
moved to Colton, Calif., where they had relatives and believed the job market
would be better. They moved back to Arkansas this year, however, after
struggling to find steady work.
He quickly accepted a factory job at $8 an hour, but she got rejection after
rejection trying to find office work.
Ms. Nelson eventually gave up and took up waitressing. The couple is living
with her mother, trying to save enough for their own place.
“I don’t know, with the jobs we have, if we’re ever going to be able to make
it on our own,” Ms. Nelson said.