Low-wage work is more pervasive than you think, and there aren’t enough “good jobs” to go around
"Even as the U.S. economy hums along at a favorable pace, there is a vast segment of workers today earning wages low enough to leave their livelihood and families extremely vulnerable. That’s one of the main takeaways from our new analysis, in which we found that 53 million Americans between the ages of 18 to 64—accounting for 44% of all workers—qualify as “low-wage.” Their median hourly wages are $10.22, and median annual earnings are about $18,000.
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Meet the low-wage workforce
"Jobs play a central role in the lives of most adults. As forces like globalization and automation reshape the labor market, it is clear that some people and places are positioned to do well while others risk becoming collateral damage. The well-educated and technically savvy find ample employment opportunities, while those with lower levels of education face a labor market that is decidedly less welcoming, with lower wages and less potential for career growth. Meanwhile, some regions dramatically outpace others in job growth, incomes, and productivity, raising disquieting questions about how best to promote broad-based economic growth.
Against this backdrop, we provide in a new report extensive demographic and occupational data on low-wage workers nationally and in more than 350 metropolitan areas.
We segment low-wage workers into nine distinct clusters based on age, educational attainment, and school enrollment—factors we judged as providing the simplest yet most comprehensive framework to assess employment prospects . . .
READ MORE > Brookings Research
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The existence of low-wage work is hardly a surprise, but most people—except, perhaps, low-wage workers themselves—underestimate how prevalent it is. Many also misunderstand who these workers are. They are not only students, people at the beginning of their careers, or people who need extra spending money. A majority are adults in their prime working years, and low-wage work is the primary way they support themselves and their families.
Low-wage work is a source of economic vulnerability
There are two central questions when considering the prospects of low-wage workers:
1. Is the job a springboard or a dead end?
2. Does the job provide supplemental, “nice to have” income, or is it critical to covering basic living expenses?
> We didn’t analyze the first question directly, but other research is not encouraging, finding that while some workers move on from low-wage work to higher-paying jobs, many do not. Women, people of color, and those with low levels of education are the most likely to stay in low-wage jobs.
> In our analysis, over half of low-wage workers have levels of education suggesting they will stay low-wage workers.
This includes
- 20 million workers ages 25-64 with a high school diploma or less, and
- another 7 million young adults 18-24 who are not in school and do not have a college degree.
We define “low-wage work” as occupations in which, nationally, at least one-quarter of all workers make less than $10/hour.
The major low-wage categories include:
(1) sales and related occupations;
(2) food preparation and serving related occupations;
(3) building and grounds cleaning and maintenance occupations;
(4) personal care and service occupations; and
(5) farming, fishing, and forestry occupations.
> About two-thirds (67 percent) of workers in low-wage occupations live in suburban communities, just below the share of total workers who live in suburbs (69 percent).
For more people to escape low-wage work, we need to create more jobs paying higher wages
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. 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 > Brookings
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