Why American workers feel increasingly poor

In some respects, the American worker has bounced back since the recession, with the unemployment rate sinking to near pre-recession levels. So why do so many households feel increasingly broke?

A major reason is because the new jobs being created are centered in low-wage industries, with America now employing 2.3 million more low-paid workers than at the start of the recession, according to a new report from the National Employment Law Project. By comparison, there are 1.2 million fewer jobs in the mid- and higher-range industries, the study found.

Even worse, real median hourly wages have declined across low, middle and high income levels from 2009 through 2013, the study found. No matter if workers were in the lowest bracket ($8.84 to $10.85 an hour) or the highest ($31.40 to $86.34), median hourly wages declined when you take into account the impact of inflation. So while your utilities and grocery bills continue to rise, your take-home pay, in real dollars, may not be going as far as it had before the recession.

Across all occupations, real median hourly wages slipped 3.4 percent since 2009. While even better-paid workers saw median hourly earnings erode, the worst-hit segments were at the bottom, with declines of more than 4 percent.

"Serious concerns about job quality persist," the group wrote in the report. "Real wage declines occurred across the board in this recovery but were especially sharp for lower-wage workers."

The report may add to some workers' sense that opportunity is increasingly out of reach. In June, a CNNMoney poll found that 6 out of 10 respondents said they believed the American Dream, however they wanted to define it, was no longer achievable.

Hourly wages for most Americans either stagnated or declined from 2000 to 2013, the Economic Policy Institute, a liberal-leaning think tank, said in a June report. Like the National Employment Law Project, the EPI found that the worst-hit groups were those at the lowest of the wage distribution.

The occupations suffering the steepest wage declines were focused in low-paid industries, NELP noted. Some of those hard-hit occupations, such as housekeeping, tend to be dominated by women. The country's 4.49 million retail salespersons saw their real median hourly wages decline by 4.2 percent, while the 1.1 million restaurant cooks suffered an 8.3 percent decline in median hourly wages.

While that may seem grim, there is also a sliver of good news. Higher-wage industries have started hiring, with almost 40 percent of jobs created in the last six months focused in high-paying industries, according to an analysis of the data published in the Washington Post.

Still, those higher-paid industries have a long way to go to make up for lost ground. That's because NELP estimates there are 522,000 fewer jobs in higher-wage industries now than before the recession.

  • Aimee Picchi

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