Despite booming economy, nearly half of U.S. workers are in low-wage jobs
Some 55 million people in the U.S. are considered "low wage" with median annual earnings of about $18,000.
A new study by the Brookings Institution finds that 44 percent of Americans have jobs that qualify as “low-wage.”
The study said that 55 million people in the U.S. fall into that category, with median hourly wages of $10.22, and median annual earnings of about $18,000.
Related: Power shift has cost wage earners $1.5 trillion since 2015
“The existence of low-wage work is hardly a surprise, but most people—except, perhaps, low-wage workers themselves—underestimate how prevalent it is,” the report said. It added that despite popular perceptions, low wage workers are not just students or people at the beginning of careers. “A majority are adults in their prime working years, and low-wage work is the primary way they support themselves and their families,” the study said.
Hard to escape, impossible to live without
The Brookings report suggests that in many cases, low-wage employment is not a springboard to better jobs. “In our analysis, over half of low-wage workers have levels of education suggesting they will stay low-wage workers,” the report said.
And low-wage workers are not simply supplementing other family income—their jobs are essential for their family’s basic needs. “These workers get by on very low incomes: about $30,000 for a family of three and $36,000 for a family of four,” the report said. “Twenty-six percent of low-wage workers (14 million people) are the only earners in their families, getting by on median annual earnings of about $20,000. Another 25 percent (13 million people) live in families in which all workers earn low wages, with median family earnings of about $42,000.”
Low-wage workers are common in every part of the country
The researchers looked at data from 400 metropolitan areas and found that the percentage of low-wage workers ranged from a low of 30 percent of a community’s workforce to a high of 62 percent. Smaller communities in the southern and western U.S. tended to have higher numbers of low-wage workers.
But even large metropolitan areas with booming economies can have high numbers of low-wage workers. “Places with some of the highest wages and most productive economies are home to large numbers of low-wage workers: nearly one million in the Washington, D.C. region; 700,000 each in Boston and San Francisco; and 560,000 in Seattle,” the report said. “Addressing the challenge of low wages combined with high housing prices is a key issue in these places.”
Where are the jobs that provide economic security?
The Brookings report noted that addressing the problem of low-wage jobs raises complex questions. It said, for example, that more could be done to provide workers with education—but added that more education or skills aren’t a panacea. “The conversation can’t end with the assumption that if only workers had more skills, everything would be fine,” the report said. “What kinds of jobs are we generating, do they pay enough to live on, and to whom are they available?
The study mentioned research that found for every good job there are 3.4 working-age adults with less than a bachelor’s degree. The report’s authors concluded that it might be necessary to rethink the fundamentals of the country’s social and economic policies and focus on growth that raises the standard of living for all participants.
“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,” the report said. “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.”
Read more: