Our Low-Wage Recovery: How McJobs Have Replaced Middle Class Jobs

When we think about what the economy has lost since the Great Recession, we tend to consider it in terms of simple addition and subtraction. We said goodbye to more than eight million jobs in the downturn; we've added around four million back. It's easy and dismal math.

But there's another painful dimension to this recovery that's gotten far less attention than the lingering jobs deficit. It's the fact that most of the jobs we lost offered decent pay, while the ones we're adding are mostly low-level, service sector positions. Middle class jobs have been replaced by McJobs.

The National Employment Law Project highlights that switch in a new report from which I've borrowed the graph below. Mid-wage jobs, such as construction trades and secretaries, accounted for 60 percent of our employment drop during the recession but made up just 22 percent of the recovery through the first quarter of 2012, according to the most recent Current Population Survey data. Low-wage occupations, such as retail and food service workers, made up 21 percent of the losses and 58 percent of growth.*


This isn't just the familiar story of how blue-collar, male-dominated fields such construction and manufacturing were decimated. As NELP notes, many of the worst hit mid-wage occupations have been office workers; there are now around 345,000 fewer secretaries and administrative assistants and 108,000 fewer insurance claims clerks, for instance. These are jobs that have likely been made redundant by better technology, and the recession became an opportunity for companies to shed weight. Just like factories have reaped productivity gains by laying off workers and investing in machines, some white collar industries have trimmed their payrolls by relying more on IT and temps.

In that sense, what's happened during the recession and its aftermath is really the extension of a longer-term pattern, where technological change and globalization have shaped an  economy that creates new work at the top and bottom, but very little in the middle. As this graph, also from NELP, shows, the housing boom helped arrest that trend a bit. It resumed right after the bust.


The middle layer of our economy was hollowed out in the recession. We've barely begun to fill it back in.


*NELP defines a mid-wage job as one where the median worker earns between $13.84 and $21.13 an hour. Low-wage jobs pay $7.69 to $13.83.