NEW YORK—Wages have stagnated for America’s workers across the board, but those in lower-paying jobs are being hit the hardest: low-wage occupations saw the biggest drop in real wages during the recovery, according to a new report from the National Employment Law Project.
“Stagnant wages have become a fact of life for nearly all of America’s workers, but workers in lower-paying occupations are finding it especially tough to keep up with the rising cost of living,” said Christine Owens, executive director of the National Employment Law Project. “Not only are their paychecks not growing, but their purchasing power has shrunk considerably, and to a far greater extent than that of higher-wage earners.”
NELP’s report looks at the percentage change in real median hourly wages from 2009 to 2014 for 785 occupations, divided into five groups with each representing one-fifth of total employment in 2014.
From 2009 to 2014, real median hourly wages declined across all occupations by an average of 4.0 percent, but the lowest-paying occupations saw the greatest declines:
- Lower- and mid-wage occupations saw greater declines in their real median wages than did higher-wage occupations: Occupations in the top two-fifths saw average real wage declines of 2.6 and 3.0 percent, whereas occupations ranked in the bottom three-fifths saw average real wage declines ranging from 4.0 percent to 5.7 percent.
- Among the 10-largest occupations in the bottom fifth, declines were most pronounced for occupations in the restaurant sector: food preparation workers and cooks saw wage declines of 7.7 percent and 8.9 percent, respectively (amounting to roughly $1,622 and $2,185 less in income in 2014 than in 2009). Janitors and cleaners, personal care aides, home health aides, and maids and housekeeping cleaners also experienced steep declines.
The report cautions that many of the jobs projected to see strong growth through 2022 are lower-paying occupations experiencing above-average real wage declines. Five of the ten occupations projected to add the greatest number of jobs between 2012 and 2022 were at the bottom of the occupational distribution in 2014, with real median wages between $8.84 and $10.97. Six of the ten highest-growth occupations saw real wage declines of 5.0 percent or more between 2009 and 2014.
Notably, the report offers evidence that minimum wage policies can help counteract wage stagnation for workers at the bottom of the labor market. NELP found that the lowest-paid workers (at the 10th percentile) within the bottom fifth of the occupational wage distribution experienced an average real median wage decline of just 1.6 percent—well below the 4.0 average. Numerous increases in state and local minimum wages over this period likely contributed to this smaller decline in wages for those who are effectively the lowest-wage employees in these lowest-paid occupations.
“Wage stagnation and the decline in real wages during the recovery is part of a longer-term trend that goes back decades. Continued slack in the labor market, combined with the historically low share of U.S. workers represented by unions, has greatly limited workers’ ability to bargain for higher wages,” said Owens. “The question now is what we can do about it. We can start by raising the federal minimum wage, , enforcing wage protections aggressively, and restoring workers’ freedom to bargain collectively. Steps such as these can help reverse income inequality and begin to straighten out our economic priorities.”
Download Occupational Wage Declines Since the Great Recession at http://stage.nelp.org/publication/occupational-wage-declines-since-the-great-recession/
The National Employment Law Project is a non-partisan, not-for-profit organization that conducts research and advocates on issues affecting low-wage and unemployed workers. For more about NELP, visit stage.nelp.org.
FOR IMMEDIATE RELEASE: September 3, 2015
Contact: Anna Susman, Anna.Susman@berlinrosen.com, 646-200-5285