As the so-called “recovery” continues, the facts just inconveniently get in the way, if you dare to look beyond the lamestream media. In a mere 6 years, since the recession began, wages have dropped substantially.
“Jobs gained during the economic recovery from the Great Recession pay an average 23% less than the jobs lost during the recession,” according to a new report released by The U.S. Conference of Mayors .
The annual wage in sectors where jobs were lost during the downturn was $61,637, but new jobs gained through the second quarter of 2014 showed average wages of only $47,171.
This wage gap represents $93 billion in lost wages. Under a similar analysis conducted by the Conference of Mayors during the 2001-2002 recession, the wage gap was only 12% compared to the current 23%–meaning the wage gap has nearly doubled from one recession to the next.
The report also found that 73% of metro area households earn salaries of less than $35,000 a year. It represents a loss of $93 billion in wages.
Extensive job losses in high-wage manufacturing ($63K) and construction ($58K) sectors were replaced by jobs in the lower wage sectors of hospitality ($21K), health care ($47K), and administrative support ($37K).”
To summarize, our high-wage manufacturing jobs, what little is left of them, are still being ravaged, to the inevitable number of zero. Construction jobs, which were absolutely killed with the housing crash, but apparently have been re-constructed during this investor driven mini-housing-bubble, are being lost as yet another sign of the impending “new” housing crash.
Fear not, we have two growing sectors of job growth:
- Accommodation and Food
- Health Care and Social Assistance
These are the jobs that are being added:
- Accommodation = Hotel Desk Workers and Maids (not exactly a career path with any future)
- Food = Waitresses, Waiters, Cooks and Bartenders (not exactly a career path with any future)
- Health Care = Medical Secretaries, Nurses, Doctors, physical therapists and other Obamacare support staff . Almost forgot – the IRS
- Social Assistance = Helping out all those other people who don’t have jobs file for benefits
No wonder wages are falling. The only jobs on the rise that makes a decent wage are nurses and physically-oriented therapists. And their jobs are only dependent upon people being sick, not on any goods produced or marketed. If this is the case, then where is our job creation?
The growth of jobs for doctors and nurses is not on the following list, because they are not in the fastest growing group, but in the 18% growth range, considered “faster than average”.
Here are the government’s projections on the fastest growing jobs where one can reasonably expect to find a job:
Fastest Growing Occupations
- Industrial-organizational psychologists Annual Salary: $83,580
This job sounds great, but there are only 540 people currently working in this job in only 7 states, so I wouldn’t go through grad school hoping to land one of these babies.
The following two jobs had the highest numbers of people actually working, and are predicted to be the fastest growing jobs as well:
This is the area within health care that will grow the most, not nurses or doctors with the highest salaries
This job also falls under “Healthcare” and also has a measly salary
Decline of Wages by Education Level
And for another blow to the downtrodden middle class, highlighting the march towards third-world- country status of minority wealthy-elite, versus the unwashed masses, the report goes on:
Just this past year, “ Real hourly wages are down for workers at all education levels in the first half of this year compared to the first half of 2013, according to the Economic Policy institute paper. Pay fell by 1.1% for people with high school diplomas, by 1% for people with some college, 1.6% for people with college degrees and 2.7% for people with advance degrees.”
Did you catch that? People with advance degrees saw over double the wage drop than the high school graduates!
“..pay decreases seen over the last year are part of a longer trend: wages have pretty much been flat or on the decline since the start of the recession.”
Net Worth by Age Group Since 1989
The Cost-of-living is Higher
Wages may be down 23%, but that is not the entire picture. You have to factor in inflation. Considering that the lion’s share of the American’s budget is spent on housing, food and gas.
- Gas prices were $1.59 in 2008, so they have essentially doubled
- Rental prices have been increasing, but it’s different in every area
- Increased healthcare cost incurred by Obamacare; higher premiums and/or deductibles
On-Going Trend Gives Top 5% Nearly Half-Trillion Dollars in Added Annual Income
“The report also shows the gap between low and higher income-households is growing and will continue into the foreseeable future…that middle-income households will continue to fall behind as higher income levels capture a greater share of income gains.”
And for the predictable finale,
“The report concludes that according to IHS economic models, the drift toward income inequality will persist in the coming years as it is a structural feature of the 21st Century economy.“ Unless policies are developed to mitigate these trends, income inequality will only grow larger in the future,” according to Jim Diffley, director of US Regional Economics at IHSand, author of the report.”
Policies needed? I hope they are talking about actual policies that encourage businesses, not “more of the same that hasn’t worked, so let’s try some more” definition-of-insanity policies. If it’s up to this administration, I’m confident that instead of engaging in business-friendly tax breaks to stimulate the largest job creators – small businesses, and other traditionally capitalistic solutions to allow a free-market economy to repair itself, they will enact even more regulations that will only mess things up further.
Between wages cascading down with no end in sight and the cost-of-living being higher, I’d say this was a perfect recipe for the ongoing destruction of the middle class.
Article authored by Carol Serpa. You can find the original story right here.