Monday, May 19, 2014
By Derek Thomas
We reported last year that as of 2011, Indiana had a higher percent of jobs in occupations with poverty-level wages than all neighboring states, the Midwestern average and the U.S. average, and that job growth was largely concentrated in low-wage work. New analysis shows that among neighboring states, Kentucky took the 2012 title back by a slim margin. However, Indiana still holds the dubious distinction of having the largest percent growth in occupations with poverty-level wages over the past three years – nearly 12% from 2010 - 2012 (Figure A). Additionally, the percent of jobs in occupations with median annual pay less than twice the poverty threshold is up from 71% to 72.1% - of neighboring states, only Kentucky has more (slightly).
FIGURE A: Percent Of Jobs In Occupations With Median Annual Pay Below
Poverty Threshold for Family Of Four
Source: Working Poor Families Project & PRB analysis of Occupational Employment Statistics, May 2012
Furthermore, a new report from the
National Employment Law Project (NELP) finds that: “Service-providing
industries...have led private sector job growth during the recovery.These
industries, which pay relatively low wages, accounted for 39 percent of the
private sector employment increase over the past four years."
While the data from the
chart above is from 2012, and the NELP report takes a deeper dive into
sub-sectors that this blog doesn't, a quick look at data on industry growth
reflects similar trends in Indiana (Figure B). In the past year, the 'Leisure and Hospitality' sector
has accounted for 21% of job growth in Indiana, (22% since the recession
began and 10% since the recovery began). This industry includes 'Food
Preparation and Serving Workers, Including Fast Food', and as of May
2013, Indiana had the 5th highest concentration of jobs and location quotients in this occupation in the U.S. Contrary to minimum wage opponents, and from the Center for Economic and Policy Research, the majority of these fast food workers are adults (of whom 85% have a high-school degree or more) and more than a quarter are raising children.
FIGURE B: Job Growth, By Industry in Indiana
Source: Economic Policy Institute Analysis of Current Establishment Survey March 2014 & STATS Indiana, using U.S. Bureau of Labor Statistics and Indiana Department of Workforce Development data
Worse, not only are low-wage jobs on the rise, but in real dollars, the 20th percentile wages (right around the poverty level wage) have declined, and more so than all neighboring states and the U.S. average (Figure C).
FIGURE C: 20th Percentile Wages by State by Year - In 2013 Dollars
|
Source: Economic Policy Institute analysis of Current Population Survey data ** Using CPI-U-RS
Following a decade
of low-road growth strategies, there's good reason to be "skeptical of arguments about the job-killing
impact of taxing and regulating." To raise the standard of living for hundreds of thousands
of Hoosiers, Indiana lawmakers should give sincere consideration to policies
that can meaningfully increase economic security and create
opportunity through greater access to childcare and early-ed, job-training, healthcare (update - Governor Pence proposes HIP 2.0 alternative) and an increased minimum wage.
I appreciate your contribution to understanding the poverty cycle and the economic factors that suppress our middle class aspirations. Keep up the good work.
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