New US jobs pay significantly less

Jobs created in the US after the Great Recession tend to pay significantly less than the ones that were lost during the steep economic downturn, according to a new wage study.

Although the country has regained the 8.7 million jobs lost in the 2008-9 financial crisis, the average wage has dropped 23 percent, according to a study released Monday by the US Conference of Mayors, which represents cities with populations of more than 30,000.

The average annual salary in high-paying sectors where jobs were lost – particularly manufacturing and construction- was $61,637, according to the report. However, job gains during 2010 through mid-2014 was mainly in low-wage sectors, where the average wage was $47,171, implying $93 billion in lower wage income.

The study also added evidence to other research showing that rich Americans have been getting richer while poorer households lag in terms of income growth, a trend not expected to slow anytime soon.

“While the economy is picking up steam, income inequality and wage gaps are an alarming trend,” said Kevin Johnson, conference president and mayor of Sacramento, California.

“The inequality crisis facing our cities is a threat to our fundamental American values. Reducing income inequality and ensuring opportunity for all is nothing less than the challenge of our times,” said New York City Mayor Bill de Blasio, chair of the Mayors’ Cities of Opportunity Task Force, in a statement.

The report also showed that the majority of metro areas – 73 percent – had households earning salaries of less than $35,000 a year. The federal poverty threshold for a family of 7 in 2014 is $36,030.

On average, American workers earned $24.45 an hour in July, up only a cent from June. Over the last year, wages have grown just 2 percent, about the same rate increase since late 2009.

The American economic recovery has been disappointing from the perspective of pay. From early 2010 through mid-2014, the fastest job growth came in low-wage sectors like retail, hospitality and food service, with average annual wages of just under $21,000.

According to the US Labor Department, the jobless rate was 6.2 percent in July, and businesses added 209,000 workers, representing the sixth straight month of job gains greater than 200,000.

However, the Economic Policy Institute (EPI) estimates that given the pace of population growth since the recession, in July there were 5,860,000 “missing workers,” which include potential workers who aren’t in the labor force – many because they’re discouraged. EPI estimates if these workers were looking for jobs, the actual unemployment rate would be about 9.6 percent.