In the United States, every job lost — numerically — during the recession that peaked in 2007 has been replaced, but according to an analysis released Monday these new jobs pay an average of 23 percent less than before they were lost.
What has comprised of the middle class, or wage earners generally making between $15 an hour on the low end and $30 an hour on the upper end, is growing at the slower, almost fractional rate. In California, middle wage-earning jobs and job creation have all but come to a standstill.
In California, the erosion of the middle class is the worst in the nation, which is revealed in part by the faster-paced employment growth in the state, which is made up of high-wage growth through corporate consolidation and bonuses and explosive growth in the low-end jobs between minimum wage and $14 an hour. Those jobs are mainly in customer service, hospitality and low-end health care.
The problem is more pronounced in our state than any other, not just causing a wealth and money-earning imbalance, but setting up a system that may ultimately effect the growth of the economy in the state, affecting housing markets, consumer confidence and the gradual slip of a former middle class that sinks into the class of the working poor.
It’s almost as if what is happening in California isn’t really happening in California. By that we mean, the jobs growth, the economic rebound, they are missing the component that will see a system-wide economic recovery be stable and long-lasting — the strengthening and rise of the middle class.
Various reports related to this fact have begun to emerge ever since the Census Bureau released numbers earlier this month showing the widening chasm between the highest-paid and the lowest-paid in California.
This state has seen some of the best strides in the country in terms of the housing market returning, for instance, but as prices climb the people who can afford to buy will ultimately tap out as middle-class purchasers of single-family homes shrink in numbers.
It is a dangerous predicament to be in in California. At some point, it begins to appear that the growth in this state is happening on a wobbly foundation.
Unfortunately there does not appear to be an immediate solution. Job creation, an economy on the mend, not just in California but in the nation, has required the bar to be moved. Consolidation, automation in middle-level positions and lowering pay that was substantially higher before the layoffs occurred were part of the path to improve our outlook.
Where this goes from here will be interesting, and potentially painful for hundreds of thousands of families who sink further toward poverty. We hope solutions are on the way, that a reliable middle-wage sector emerges for all of the nation’s workers.