Almost half of workforce locked in low-wage jobs
53 million people work at jobs with a median salary of $18,000
Walmart workers protest for higher wages five years ago in Chicago. (Shutterstock)
By Ted Cox
President Trump likes to boast about unemployment being at a 50-year low, but a new study from the Brookings Institution suggests that almost half those workers are locked in low-wage jobs.
The Washington, D.C.-based nonprofit released a study last month finding that some 53 million U.S. residents — 44 percent of the overall workforce between the ages of 18 and 64 — are in jobs paying a median hourly wage of $10.22 and a median annual salary of $18,000.
CBS News reported on the study Monday, stating: “Even though the economy is adding more jobs, there's increasing evidence that many of those new positions don't offer the kind of wages and benefits required to get ahead.”
The study took pains to emphasize it was not just measuring teenagers working fast-food jobs with the expectation to soon move on to something better. More than half of the workers, 56 percent, were in their prime years between 25 and 50, when their likelihood of having children is 43 percent. Low-wage workers in that age demographic made up 15 million people, 28 percent of low-wage workers, and some 14 million overall, 26 percent of low-wage workers, were the only earners in their families. Another 13 million lived in families where all earners were in low-paying jobs, with a median household income of $42,000.
According to the study, smaller cities in the South and West were most likely to have workforces with more than half of workers in low-paying jobs. Illinois fared relatively well, on the low end of the national average, with all metropolitan areas placing between 38 and 45 percent of workers in low-wage jobs. The St. Louis area posted a percentage under 37 percent, but it was also employing fewer low-wage workers than Chicago, which had more than 500,000.
The study drew on a Gallup poll finding that six in 10 workers say their jobs are mediocre or downright bad, and one in five says benefits are worse than five years ago.
It found that many of those workers are locked into their jobs by their educational level, stating: “There simply are not enough jobs paying decent wages for people without college degrees to escape low-wage work.” In addition to those with low education levels, poorly paid workers were more likely to be women and African Americans.
“Education on its own cannot solve this problem,” the study stated. “The data presented in this analysis highlight the scale of the issue: nearly half of all workers earn wages that are not enough, on their own, to promote economic security. As policymakers and leaders of the private, social, and civic sectors seek to promote more inclusive economic growth, they need to keep these workers in mind.”
The study recommended that policies be formed to improve worker skills, attack discrimination, and promote good jobs through economic development. It did not mention potentially expanding the Earned Income Tax Credit, a recommendation put forth earlier this year by a Chicago task force assigned to study a pilot program for Universal Basic Income.