The U.S. Economy May Be Adding Jobs, But They Are Not Equal To The Jobs That Were Lost

Thanks to, among other things, a falling labor force participation rate, U.S. unemployment is now down to 7.5%. It’s important to note though that the job gains of the last few years have not been equivalent to the jobs that were lost.

Fed Governor Sarah Bloom Raskin asserted in a recent speech that the jobs recovery has been fueled by lower wage occupations.

About two-thirds of all job losses in the recession were in middle-wage occupations–such as manufacturing, skilled construction, and office administration jobs–but these occupations have accounted for less than one-fourth of subsequent job growth. In contrast, the decline in lower-wage occupations–such as retail sales, food service, and other lower-paying service jobs–accounted for only one-fifth of job loss and more than one-half of total job gains in the recovery.

A note from Credit Suisse divides jobs in the U.S. into two broad categories: high wage jobs and low wage jobs.

Average Hourly Wages for US Industries 600x276 The U.S. Economy May Be Adding Jobs, But They Are Not Equal To The Jobs That Were Lost

In April, far more low wage jobs were added than high wage jobs, and further suggests that a significant structural employment shift has occurred.

Gains in US Employment Driven by Low Wage Job Growth 600x342 The U.S. Economy May Be Adding Jobs, But They Are Not Equal To The Jobs That Were Lost

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