REPORT: Job Growth During Economic Recovery Is Concentrated in Low-Wage Industries

An April 2014 report by the National Employment Law Project (NELP) tracks private-sector job loss and growth from the recession through the economic recovery and found that four years into the recovery, most job growth is in lower-wage industries, including “nursing and residential care facilities.”

The NELP researchers analyzed 14 private economic sectors, breaking them down into 85 industries and three wage categories, concluding that:

• Lower-wage industries constituted 22 percent of recession losses, but 44 percent of recovery growth.
• Mid-wage industries constituted 37 percent of recession losses, but only 26 percent of recovery growth.
• Higher-wage industries constituted 41 percent of recession losses, and 30 percent of recovery growth.

The researchers examined the economic recession from January 2008 to February 2010 and the recovery period from February 2010 to February 2014.

“Today, there are nearly two million fewer jobs in mid- and higher-wage industries than there were before the recession took hold, while there are 1.85 million more jobs in lower-wage industries,” NELP reports.

During the six-year period examined, “nursing and residential care facilities,” a subgroup of the “education and health services” sector, experienced an 8.5 percent increase in net employment. In February 2014, 3,245,000 people were employed in the industry; in 2013 the median hourly wage was $12.98.

“Strong private sector employment growth continues” in the education and health services sector, which is “relatively immune to downturns,” the authors write. This sector was the only sector to add jobs over “both the economic downturn and recovery, pushing employment nearly 13 percent higher than it was at the start of the recession.”

In a press release (pdf), NELP Policy Analyst Mike Evangelist, the author of the report, said, “The replacement of high-wage and mid-wage jobs with low-wage jobs underscores the need for a boost in wages in the lowest-paying occupations.

“Low-paying jobs are becoming the core of the American economy — but it’s not a foregone conclusion that jobs in retail, food service, and similar occupations must be so poorly compensated,” Evangelist continued.

The April 2014 report, entitled The Low-Wage Recovery: Industry Employment and Wages Four Years into the Recovery, is an update of an earlier analysis on job loss and growth trends by NELP.

— by Deane Beebe