The McCovery Continues: Almost Half of New Jobs Are in Low-Wage Industries

A blog about business and economics.
April 30 2014 12:17 PM

The McCovery Continues

A McDonald's.
The great American jobs engine.

Photo by Mladen Antonov/AFP/Getty Images

Last month, the U.S. job market hit a milestone of sorts, when business payrolls finally climbed past their 2008 peak. It took a few years, but the private sector had finally reclaimed all the jobs it lost during the recession.

Kind of. The key thing to remember is that the jobs added during the recovery have, on the whole, been far, far crappier than the jobs lost during the crash. The National Employment Law Project has been tracking this trend for a while now, and this month, it reports that while jobs in low-wage industries made up just 22 percent of the losses during the recession, they’ve made up 44 percent of the gains since. Skilled construction and manufacturing work have been replaced by retail and food service positions. It’s a bit like the private job market is an old house where somebody stripped off all the nice wood from the exterior and put up some awful aluminum siding in its stead. The building is about the same size, but it's certainly not the same place.

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Or, for those readers who don't enjoy slightly elaborate metaphors: We’ve swapped middle-class jobs for McJobs. It's that simple.

Here’s another look, industry by industry. As you can see, the lower a sector's median hourly pay, the more workers it has tended to add. That’s not necessarily surprising: low-wage industries like retail and food services are extremely large, and so they can add lots of bodies even if they grow slowly. The problem, again, is that the losses happened in higher-wage industries, which haven’t bounced back entirely. Meanwhile, government employment is still down, acting as a drag on the entire recovery.

Low-wage service jobs have been replacing traditional middle-class work since well before the recession. But the downturn and its aftermath sped the process up. When you think about why our recovery hasn't always felt like one, remember that the problem isn't just the number of jobs we've added; it's the quality of those jobs, too.

Jordan Weissmann is Slate's senior business and economics correspondent.

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