Occupational Wage Declines Since the Great Recession: Low-Wage Occupations See Largest Real Wage Declines

Introduction

On this Labor Day 2015, the U.S. labor market has shown considerable healing since the Great Recession. Private sector employment has expanded steadily, and the jobless rate has continued to fall. Yet, underlying weaknesses persist, as evidenced by the historically low employment rate of prime-age workers and the stubbornly high number of individuals unemployed for longer than six months. The “real” unemployment rate—which includes those working part time who want full-time work, and those who have stopped searching but if offered a job would take it—remains in excess of 10 percent.

Moreover, most workers have failed to see improvements in their paychecks (Gould 2015a). In fact, taking into account cost-of-living increases since the recession officially ended in 2009, wages have actually declined for most U.S. workers. Inflation-adjusted or “real” wages reflect workers’ true purchasing power; as real wages decline, so too does the amount of goods and services workers can buy with those wages. The failure of wages to merely keep pace with the cost of living is not a recent phenomenon. The declines in real wages since the Great Recession continue a decades-long trend of wage stagnation for workers in the United States (Gould 2015a).

In this data brief, we examine real wage declines for U.S. workers based on their occupations. Previous research has used a variety of other data sources and measures to examine change in real earnings. Our analysis relies on data from the Occupational Employment Statistics series which affords the ability to examine wage declines across nearly 800 occupations, providing a richer and more granular picture of wage changes since 2009. As described in the discussion below and shown in the Appendix Table, wage decline rates are not uniform across all occupations. Rather, higher rates are concentrated in certain occupations, and rates overall vary across quintiles. Our occupational wage data analysis also makes clear that, on average, the lowest-paying jobs have experienced disproportionately greater wage declines. Policymakers may want to pay particular attention to these differences as they set priorities for remedial action or determine appropriate policies and strategies to raise wages for certain kinds of jobs.

Using the latest available data on hourly wages by occupation, this brief details the trends in occupational real wages since the recovery began in 2009. We calculated the percentage change in real median hourly wages from 2009 to 2014 for 785 occupations, which were grouped into quintiles, each representing approximately one-fifth of total employment in 2014. We summarize our findings below. Our analysis for this brief updates our earlier work finding wage declines by occupation between 2009 and 2013 (NELP 2014).