Mid-wage employment suffered the deepest decline in the recession and is the only segment to continue falling even in the recovery. Above, Valerie Colter, who lost a mid-wage job in the recession and now works a variety of jobs. (Kirk McKoy / Los Angeles Times)
On August 8, 2014, Tiffany Hsu writes in the Los Angeles Times:
On the surface, California’s job market is booming.
The state has now recovered all the jobs lost during the recession, and done so at a faster pace than all but five states.
The growth, though, belies a troubling imbalance. The fastest job creation has come in low-wage sectors, in which pay has declined. At the high end of the salary scale, a different dynamic has taken hold: rising pay and improving employment after rounds of consolidation.
Most distressing, middle-wage workers are losing out on both counts.
“People talk about it like an hourglass,” said Tracey Grose, vice president of the Bay Area Council Economic Institute. “There are fewer opportunities for people in the middle.”
Economists generally consider mid-wage jobs to pay between $15 and $30 an hour in California — encompassing a third of workers in the state. Those at the top end of that range, which amounts to about $60,000 a year, earn more than 72% of Californians.
Middle-wage stagnation can damage consumer spending, dent career mobility, stall home buying and exacerbate a poverty rate that’s already the highest in the country, economists warn. Those concerns are amplified in a state notorious for a high cost of living.
As more mid-tier jobs disappear, economists fear middle-class workers will be increasingly sucked into the ranks of the working poor. And they could crowd out those already working low-wage jobs, or drive their salaries down further.
“The long-term problem isn’t unemployment; it’s poverty,” said Stephen Levy, director of the Center for Continuing Study of the California Economy in Palo Alto. “It’s not jobs; it’s wages.”
Valerie Colter landed a $1,000-a-week job, right out of college in 2005, as an executive assistant to a sitcom producer. She was laid off two years later.
She has struggled since then to make half as much. She did a stint as a transcriber for a reality show company, working overtime to bring home $525 a week. She earned $250 every other week as an Ikea cashier; $500 a week as a postproduction assistant; $600 a week organizing a footage library.
Since 2013, the Lake Balboa resident, now 31, has worked as a coordinator at a captioning company, where she earns $500 a week while struggling to pay off student loans.
“They can’t afford to pay me what I’m worth; they can’t even match the pay at my last job,” she said. “It makes me sad. I always thought that, in 10 years, I was going to be awesome. Now here I am, just trying to survive.”
Burdened with rising healthcare and rent costs, California employers aren’t keen to raise wages. Although salaries are rising in some higher-end fields, such as electrical engineering and information technology, that mostly reflects companies competing for top candidates from a limited pool.
But there’s a glut of low- and middle-wage job seekers: former executive assistants, manufacturing technicians, insurance agents and more. Those were the types of jobs companies spent the downturn merging, automating or cutting entirely as profit margins tightened.
Earnings for both low- and mid-wage Californians have been eroding for years.
For the bottom half of the workforce, real hourly wages are 6.7% lower than they were 35 years ago, according to a June report from UC Berkeley. Since 2003, median wages for workers shrank 7.2%. The only workers in that period to enjoy real wage gains were those in the top fifth of all earners.
