The difficulty in getting ahead from the bottom


  • October 8, 2015
  • /   Shannon Nickinson
  • /   economy

Fast food workers in Richmond, Va., protesting for higher wages. Photo credit: Bernard Pollack/flckr.com

The news site FiveThirtyEight Economics has a very interesting story about the changing face of minimum wage workers.

One of the challenges of the growing service economy appears to be the difficulty minimum-wage workers have in moving out of those jobs.

This is challenge that has the potential to impact the Pensacola metro area, as tourism and service-related jobs remain an important leg of our economic stool — and one that is among the fastest growing sectors of the economy in the last 15 years.

Data shows that jobs in the accommodation and food services industries have increased 50 percent in the Pensacola metro area from 2001 to 2015 — from 13,918 jobs to 20,897.

Not to mention that our per capita income — the gross domestic product of a region adjusted for inflation and divided by the number of working age adults — stands at $38,200 for the metro area, a full $4,400 below the state average.

From Ben Casselman's story:

The large number of people getting trapped in entry-level jobs is at least partly the fault of the overall economy. The share of workers staying in low-wage jobs at least a year rose during the 2008-09 recession and has improved only modestly since then. Other research has found that “job ladders” failedin the wake of the recession: Workers were forced into jobs they were overqualified for and then weren’t able to move up into better jobs the way they would during better economic times. And more generally, weak wage growth has been a hallmark of this recovery for workers across the economic spectrum.

But the recession isn’t the entire explanation. Even before the economy collapsed, workers were spending longer in minimum-wage jobs. The decline in manufacturing is likely part of the story: Factories were a key source of well-paying jobs for men without a college education, a group that has become substantially more likely to work in low-wage occupations in recent years. The broader decline of private-sector unions, which helped workers negotiate for higher pay, also likely played a role, argued Cherrie Bucknor, who has studied the changing low-wage workforce for the Center for Economic and Policy Research, a liberal think tank.

A generation ago, someone like (Anthony) Kemp — a widower (in Oak Park, Ill.) who never completed high school — might have held a union job in a factory. Today, he is frying chicken for $8.25 an hour with little hope of advancement.

 

Obviously the market has demand for these jobs. But might we be at risk for the same phenomenon that the FiveThirtyEight article describes — that these jobs are increasingly filled by adults trying to support themselves and their families on wages meant to be the first rung on the work ladder?

   
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