When President Barack Obama and presidential candidate Mitt Romney tout job growth as one of their campaign platforms, they are speaking in very vague terms.
A new study shows that while the majority of jobs lost during the “Great Recession” were middle-wage positions, new jobs have been added. The majority of those new jobs, however, have been low paying ones.
Donna Gardner is happy to now be employed, but her wallet could use some extra bills.
In 2009, she was laid off from a property management job that paid well and included bonuses.
“It was nothing for me to make six figures in a year,” she said.
Gardner decided to draw partial Social Security, drew unemployment for two years and was fortunate to also receive income from her deceased husband’s pension.
When her unemployment ended, she decided to return to the workforce for extra money. After months of searching, she finally got a job in a clothing store in Castleton Square Mall. Gardner was trained at $7.25 an hour (on a computer) and now receives the regular $8.25 per hour pay.
“On my second day of work, I was scheduled alone and I closed the store. I had gone through the module on the computer but that was three weeks before I worked,” Gardner said.
She said she dislikes the job primarily because of the low pay, but pair that with low morale, the physical demands and the company requiring employees to open up a store credit card or pre-paid card in order to take advantage of employee discounts, and her dislike quickly becomes disdain.
“I guess I’ll be doing this until I find something else,” she said.
This story is familiar to many across the country and is reflected in the study. The National Employment Law Project’s report reviewed 366 occupations tracked by the Labor Department and categorized them into three equal groups by wage, with each representing a third of U.S. employment in 2008.
The middle third – jobs in fields like construction, manufacturing and information, with median hourly wages of about $13.84 to $21.13 – accounted for 60 percent of job losses from 2008 to early 2010.
Higher-wage occupations – those with a median wage of $21.14 to $54.55 – represented 19 percent of job losses when employment was falling, and 20 percent of job gains when employment began growing again.
Lower-wage occupations, with median hourly wages of $7.69 to $13.83, accounted for 21 percent of job losses. These jobs, however, have accounted for 58 percent of all job growth.
In a strange twist, low-wage jobs have not been growing like many would think. They simply account for a large portion of job growth, mostly because middle wage job growth has been so slow.
Furthermore, the report said that the fastest growing jobs were retail sales (at a national median wage of $10.97 an hour) and food preparation workers ($9.04 an hour). The majority of workers filling these positions are older people, like Gardner, who lost well-paying jobs in the recession and were forced to take something to get by.
“Even people who have had jobs throughout this period, for many of them, the wages aren’t keeping up with inflation. In buying-power terms, we’re getting paid less,” said Bill Rieber, an economist at Butler University. “It’s across the board that incomes have dropped.”
He went on to say that due to weak sales and high demand for jobs, there’s no reason for employers to have to pay higher wages – they can often pay lower wages because there are so many people competing for jobs.
According to the U.S. Bureau of Labor Statistics, the national unemployment rate is 8.1 percent. For Hoosiers, the unemployment rate reflects the national rate. Employment expert Chris Lawson said that Indiana’s rate peaked in the first quarter of 2010 at over 10 percent.
Rates for Blacks aren’t so promising. Among Blacks in Indiana, as of last month, the unemployment rate was 14.5 percent, according to Lawson.
Rieber said that although the job market is complex, that doesn’t exactly mean “middle level” jobs are extinct.
“There’s plenty of middle level jobs that are going to reappear, but they’re going to be in different sectors that many people aren’t used to working,” said Rieber.
Instead of relying heavily on sectors like construction or even agriculture, more Hoosiers should be looking toward health care and education.
Manufacturing is included in jobs that are decreasing, however, Indiana is seeing some life in this sector. An Ohio-based food manufacturer recently announced that it plans to spend $28.5 million to expand and refurbish a vacant food plant in eastern Indiana, creating up to 400 jobs by 2016.
“There’s no obvious sector. Projections are made for different industries. Who knows,” said Rieber. “To some extent, you have to follow your passion, but you have to customize it to what’s out there.”
Experts say that this shift in job sector security is going to be equally as tough on college grads with little to no experience who can’t find jobs in fields coinciding with their majors as well as older adults who have worked in traditional job sectors for years who have a wealth of experience and skills specifically suited for that field.
Hoosiers have already begun trying to become prepared for new job sectors. One example is the enrollment increases occurring at Ivy Tech Community College of Indiana.
Thomas J. Snyder, president of the college, said, “Ivy Tech is seen as integral to closing the skills gap. We have a seat at the table, working alongside other colleges to innovate across the higher education continuum. Our position, however, seems somewhat unique among American community colleges – and more the exception than the rule.”
There are also entities such as Workforce Wise, a program working to find solutions to the issue of Hoosiers aging out of the workforce; Indiana “Intern” net, a website dedicated to internships; and Ready Indiana, a career readiness program among other state and privately backed programs.
Rieber is hopeful middle-wage jobs will rebound eventually, but hopes that people learn a lesson from this.
“In the U.S., our self esteem is often connected to our work and when we lose that work, it hits us in our core,” he said. “This is a time to rely on family and friends for support.”
