(lightly edited for ease of reading)
Yesterday the Conference of Mayors and the Council on Metro Economies and the New American City released a report prepared by IHS Global Insight that is a repeat and thus update of a similar study performed after the 2001 – 2002 recession. Income and Wage Gaps Across the US.
I caught wind of it today reading our state news paper, it was on page 1 no less. I suggest reading it and then using it to judge your favorite candidate in the coming elections. See if they mention this report. There are 357 metro areas reported on in the index pages. Even Providence RI is noted. So look yours up.
The report looks at the jobs being created and the wages they are generating. The trend since the 2001/02 recession is that jobs lost in the recession are replaced by jobs producing lessor wages. No surprise as we have been hearing such for a while. However, this study documents that the difference in the wages is even greater this time. After the 01/02 recession it was a 12% difference or $23 billion in annual wage loss. After this current recession it is a 23% difference! $93 billion! Yes, it is because manufacturing and construction jobs are being replaced by hospitality, health care and administration jobs.
“Extensive job losses in high-wage manufacturing ($63K) and construction ($58K) sectors were replaced by jobs in the lower wage sectors of hospitality ($21K), health care ($47K), and administrative support ($37K).”
Some more general findings:
The 2012 household median income of $51,017 was, in real terms, the lowest since 1995. It had peaked at over $56,000 in 1999, and measured $55,627 in 2007 before the recession. It has fallen in each subsequent year.…the 20% of households with the highest incomes, which rose from 43.6% in 1975 to 51.0% in 2012. Moreover, most of this gain was among those in the highest 5% of income, which rose from 16.5% in 1975 to 22.3% in 2012, a gain of $490 billion in 2012. Each of the lower quintiles experienced a declining share of income.
Nothing too new there as with some other facts noted early in the report. However they do something I have not seen and I believe does a better job of presenting income distribution change in this nation. The cry we are hearing regards the decline of the middle class. But then the numbers are presented as blocks of 20%. In this report they divide the income distribution into thirds. Thus, you have a middle third…the middle class?
…we can also consider a broader group of middle income households, the middle third of the income distribution. In 2012, among US households, 34.8% earned less than $35,000, 31.8% earned between $35,000 and $75,000, while 33.5% earned more than $75,000.