America’s the land of opportunity, right? Well, for families that increasingly rely on low-wage jobs as their main source of income, that ideal may seem like a cruel joke.
The number of American workers who are low-wage and low-income earners jumped 94 percent from 1979 to 2011, reaching 20.9 million workers, according to a new study from University of Massachusetts Boston economists Randy Albelda and Michael Carr.
That means that 1 in 7 U.S. workers lives in a household whose main source of income is a low-paying job, such as working as a retail sales clerk or a fast-food restaurant cashier. The findings may go some way to explain why fewer Americans today identify as middle class, while those calling themselves lower or lower-middle class has jumped to 40 percent, up from only one-quarter in 2008.
“It wasn’t just single mothers” who rely on low-paying jobs for their main source of income, Albelda said. “Over the last 30 years, a lot of men have fallen down into it.”
The report strips out higher-income families that may have one member working in a low-income job, such as a high-school student making minimum wage flipping burgers. While states have different definitions of what qualifies for a low wage, the median cut-off is $11.22 per hour, the study found.
While single women make up a disproportionately large share of the nation's low-paid workers, men are increasingly also falling into the category. That “is consistent with the earnings literature that finds wage stagnation of male earners at the bottom of the wage ladder,” according to the study, which will be published this spring in the journal Feminist Economics.
Men “are becoming more like women,” Albelda said. “They are doing these jobs that are precarious jobs. They don’t have full hours, so there are a lot of people falling down into that position.”
Out of all low-wage, low-income earners, about 17 percent were single men without children, compared with 11.6 percent for single women with children, for example. Still, women comprised 54.4 percent of these workers, compared with 45.6 percent of men.
So how has America gotten to this point? Income inequality is making the rich even wealthier, while wages have stagnated for average workers. Much of the job growth in the economic recovery has come from low-paying industries, such as the hotel and restaurant fields.
Government aid programs were tailored to help the unemployed, the elderly or the disabled, so that working, able-bodied Americans may find it difficult to qualify for Medicaid or other safety-net programs. At the same time, many low-paying jobs don’t provide benefits such as health-care or retirement plans, the study pointed out.
“One thing we could do in the U.S. is to think more clearly about what are the minimum standards we need for employment,” Albelda noted. “Employers will balk -- they always do. They didn’t want to go to a 40-hour work week.”
Of course, these workers at least have jobs. In December, about 17 percent of working-age men weren’t employed, The Wall Street Journal recently reported. And the recovery is moving at a crawl, with only 113,000 jobs added in January, below consensus forecasts of about 185,000.
The January job numbers, according to Pantheon Macroeconomics chief economist Ian Shepherdson, were “grim.”