Recent Research: New Jobs Come with Shrinking Paychecks, Report Finds

Many Wall Street analysts reacted to last month's jobs numbers with fears of inflation, but a new report released by the U.S. Conference of Mayors Jan. 27 finds those new jobs often are associated with smaller paychecks than those before the last recession. A declining standard of living is not a goal for any state or local economic development program, so the findings present new challenges on how to create higher wage jobs in the future.

The Metro Economy Report found jobs created after the 2003 recession have paid working Americans about $9,000 less annually than the jobs lost during the recession. The report, released at the organization's annual winter meeting, showed that the 10 sectors that lost the most jobs through the end of 2003 paid an average wage of $43,629, while the 10 sectors with the largest increases in employment in 2004-2005 paid only $34,378, a staggering 21 percent decline.

The wage gap has resulted from the combined effects of the loss of high-paying jobs, especially in the durable manufacturing industries, and post-recession employment growth that has been concentrated in services sectors that have lower wage levels.

While the report indicates that the nation as a whole has regained the jobs it lost during the recession, labor markets have not improved uniformly across the country. By the end of 2004, 220 of the nation's 361 metros had regained jobs lost in the recession. In 2005, an additional 24 metros are projected to have reached their peak employment. Yet only 18 will regain employment levels in 2006, including the major metro areas of Atlanta, Dallas-Fort Worth, Kansas City, New York, Seattle, and St. Louis, leaving 99 metros slated to regain their lost jobs during the 2007-2015 period.

The report is available at: http://www.usmayors.org/74thWinterMeeting/metroeconreport_January2006.pdf

Links to this paper and more than 3,000 additional TBED-related research reports, strategic plans and other papers can be found at the Tech-based Economic Development (TBED) Resource Center, jointly developed by the Technology Administration and SSTI, at http://www.tbedresourcecenter.org/.