Jobs, jobs, jobs — they make the world go ‘round. They help circulate capital through the economy, creating social utility and overall value to society. Individually, jobs are often central to our personal identities, our occupations being one of the first things we might reveal to a new acquaintance. And, for working families, jobs pay the bills.
Or, at least, that’s how it’s supposed to work.
But the reality is that there were about 10.6 million people in America in 2012 considered the “working poor,” living in poverty despite being part of the labor force.1 And, given that antiquated federal poverty levels fall far short of an adequate measure of true poverty, the number of working individuals who are not making ends meet is much greater.2
And that’s if you have a job. Employment remains very difficult to find, by historic standards. The Bureau of Labor Statistics’ U-6 labor underutilization rate — considered by many economists to be a more complete measure of joblessness in America than the standard unemployment rate — is significantly higher than levels from before the Great Recession. This rate — which includes the unemployed, those without jobs who are not considered part of the labor force, and involuntary part-time workers— was 12.0 percent in 2014, compared to 8.3 percent in 2007.
Despite being much higher than pre-recession levels, the U-6 unemployment rate has actually decreased in recent years since its 2010 peak of 16.7. But while overall employment has increased since the Great Recession, that growth has come largely in low-wage jobs that do not pay enough to cover basic needs. That means new jobs — nearly half, as we’ve found in our calculations — do not provide enough to cover workers’ bills.
These new low-wage jobs simply add to the fact that America already has a larger share of low-wage jobs than any other developed country in the world.3
What the U-6 labor underutilization rate does not take into account are the under-resourced, or those who have gained employment but who do not earn enough to make ends meet. Nationally, there were 51.1 million low-wage jobs that in 2013 provided a wage below $15 an hour, which we use to represent a national living wage.
Workers are falling short financially in our nation, and there are few living wage jobs to go around. The number of job-seekers is nearly double what it was at the start of the recession. And the market for good jobs is tight: For every projected job opening that pays higher than the low-wage threshold, there are seven job-seekers.
The reality facing workers is clear: America is becoming a low-wage nation and, without action, the living wage crisis will only continue to worsen.
In this study, we calculate the “job gap” ratio of total job-seekers to job openings that pay $15 an hour or better nationwide, and the percentage of jobs that pay less than $15 per hour nationally and in 49 states, demonstrating the scarcity of jobs that actually pay enough to make ends meet.
We also examine employment opportunities in 10 states with calculated living wage thresholds (Colorado, Connecticut, Idaho, Florida, Maine, Montana, New York, Oregon, Virginia and Washington state) and in New York City. The study utilizes living wage findings published in 2014 to calculate the percentage of available jobs that pay median wages below those living wage levels, and the number of job-seekers for every living wage job opening that pays higher than the low-wage threshold, there are seven job-seekers.
In this study, we examine Job Gap ratios at $15 nationally and at living wage thresholds in 10 states and New York City. Additionally, a $15 threshold allows us to calculate the percentage of job openings that are lower-wage nationally and in 49 states.4 This includes jobs in occupational categories in which the median wage is less than $15 an hour in 2013 dollars.
While $15 per hour is not a living wage in all states, in our 10-state living wage study “Families Out of Balance,” we found that, in 2013, just two states had a living wage for a single individual that fell below $15. And, even for those states, households with children have living wages that are significantly higher than $15 per hour. Thus, in this study we use $15 as a conservative representation of a living wage. See “Defining Low-Wage Jobs at $15 an Hour” in the Technical Notes for more on why we use $15 as a threshold.
What Happens to Families that Do Not Make a Living Wage?
When families are unable to find work that pays living wages, they are forced to make difficult choices between adequate health care, balanced nutrition, paying bills, and saving for emergencies. The personal stories in this report illustrate some of the complex issues and choices confronted by households earning below the living wage.
Nearly half of all projected new jobs are low-wage jobs.
We find that about 48 percent of national job openings, or 2.4 million out of 5 million total projected jobs, are expected to pay less than $15 an hour, in 2013 dollars on average over the next 10 years.
Further, we find that a smaller percentage of existing jobs in 2013 paid less than $15 an hour — at 38.6 percent, or 51.1 million jobs — compared to the 48 percent of projected job openings. The difference in percentages between 2013 actual employment and projected employment is further evidence of the American economy’s shift to a low-wage workforce.
The National Job Gap: Seven Job-Seekers for Every Job that Pays More than $15 an Hour.
Workers seeking better wages have few options. In 2013, for every job opening that paid above the low-wage threshold of $15 an hour, there were seven job-seekers. This “National Job Gap” demonstrates both how crowded the job market is for employment that pays above poverty wages, and how few of those jobs actually exist.5
17 Million Job-Seekers are Out of Luck.
With 19.6 million job-seekers in 2013 and a projection of only 2.6 million job openings in occupations with median wages above $15 an hour, there are 17 million more job-seekers than jobs that pay above the low-wage threshold. These job-seekers are left to find either low-wage, non-sustaining jobs or no work at all.
The total number of job-seekers more than doubled over the course of the 2007-2009 recession, going from 10.8 million in 2007 to 22.2 million in 2009. While the number of job-seekers decreased to nearly 19.6 million in 2013, that figure is still nearly double the 2007 pre-recession level.
Statewide Employment Opportunities
Employing our methodology to all states (except Michigan, which lacks the necessary data) using a $15 threshold provides a snapshot of the jobs outlook across the country.
We find that no state has less than one-third of projected openings with a median wage less than $15 per hour. The percentage of projected full-time job openings with median wages less than $15 an hour ranges between 35 percent in Massachusetts to 61 percent in South Dakota. In 25 states, half or more of job openings paid less than $15 per hour.
The Job Gap at Living Wage Levels
We also examine the percentage of job openings that pay actual living wages as calculated for 10 states and New York City, and the ratio of job-seekers to projected living wage job openings.6 We break this down by four household types: a single adult, a single adult with one child, a single adult with two children, and two adults (only one working) with two children.
Living wages for a single adult range from $14.40 an hour ($29,957 a year) in Montana to $19.08 ($39,682 a year) in Connecticut, to $22.49 an hour ($46,771 a year) in New York City. For a household with a single parent and two children, living wages range from $25.12 an hour ($52,239 a year) in Idaho to $40.48 ($84,208 a year) in Connecticut, and $40.66 an hour ($84,563 a year) in New York City.7
These wage levels are taken from our August 2014 study, “Families Out of Balance,”
Percentage of Openings that don’t cover basic needs
The share of projected new jobs that pay less than a living wage for a single adult range from 40 percent in Colorado and Connecticut to 61 percent in Florida and New York State (not including New York City). The percentage of job openings that pay less than a living wage for a single adult with two children, meanwhile, ranges from 77 percent in Washington to 90 percent in Florida.
Percentages vary from state to state for a number of reasons, including the mix of industries and related occupations in a state, and the prevailing wage levels, which also vary from state to state. See the state-specific sections starting on page 15 for full details on each state.
The Ratio of Job-Seekers to Living Wage Openings
Job Gap ratios are calculated by dividing the number of people who were looking for work at some point during 2013 by the number of job openings paying a living wage that year.
The ratios for a single adult range from six to one in Montana and Washington to 12 to one in Maine. The ratios for a single adult with two children, meanwhile, range from 14 to one in Washington to 40 to one in Maine.
America’s job growth is in low-wage occupations
Most of the largest-growing occupations have low median wages. Among the top 10 occupations with the most projected job openings, just one has a median wage greater than $15 an hour. The top four are in retail and food service, with median wages ranging between $8.81 and $10.16 an hour.
Further, two of the top five occupations with most projected openings are among the nation’s lowest-wage occupations. “Combined Food Preparation and Serving Workers, Including Fast Food,” the lowest wage occupation with a median wage of $8.81 per hour, is projected to be the second largest growing in the country. Meanwhile, the median projected wage for “Waiters and Waitresses,” the fourth largest growing occupation, is $8.94, the fifth lowest in the nation.
These low wages disproportionately impact people of color, as the restaurant industry is the single largest employer of people of color and the second largest employer of immigrants in the country, according to a Restaurant Opportunities Center United report. Women and people disproportionately work in occupations that pay low wages, leaving them with little ability to make ends meet for themselves and their families.
Health care industries provide a benefit to working families. With the advent of the Affordable Care Act, health insurance was made affordable and even free to millions of families across the country, removing a large cost for some and giving some care for the first time in years. While some states have yet to implement the expansion of Medicaid that would reach even more families, nearly every state has seen an increase in the number of individuals insured.
With this increase, though, lies the need for a greater number of workers in the health care sectors — from support occupations through physicians and specialists — and an investment in health care jobs would ensure that families are well-served by their new health insurance.
The increased demand from these investments would expand employment in occupations that tend to be comprised of living wage jobs. Out of the 61 “Healthcare Practitioners and Technical” occupations defined by the U.S. Bureau of Labor Statistics (BLS), just two — dietetic and pharmacy technicians — have a median wage that is less than $15 an hour. By individual occupation, “Registered Nurses” is the fifth largest in the country, with nearly 2.7 million nurses employed in 2013 earning a median wage of $31.84 an hour. It is also the only occupation in the top 10 most projected openings with a median hourly wage over $15. Overall, the “Healthcare Practitioners and Technical” industry has an average wage of nearly $36 per hour.
While many “Healthcare Support Operations” occupations9 have a median wage that falls below $15, that industry as a whole has a weighted average wage of $13.61 an hour, nearly double the federal minimum wage.10 Although many of the occupations in the health care support industry do not provide living wages, the average wage of both health care industries combined is $28.43, with only 14 of 78 occupations showing a median wage of less than $15 per hour.
Health care industries are also largely recession-proof, as they were among the largest growing industries during the Great Recession, both in absolute numbers and as a percentage of pre-recession employment levels. While many industries saw a significant decrease in employment during the Great Recession, between 2007 and 2009 the “Healthcare Practitioners and Technical industries” and “Healthcare Support Operations” industries experienced the largest growth in jobs among all industries, with an increase of 323,260 and 261,450 job, respectively. Growth as a percentage of employment was also most significant among these industries, at 5 percent and 7 percent growth, respectively.