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Fri Feb 26, 2016, 05:15 PM

More High-Wage Employment Doesn't Mean the Job Market's Out of the Woods

That's the print edition title.

Wonkblog

The recovery is generating more high-wage jobs ó but does that matter?

The U.S. is still digging out of a big hole, and isn't creating new opportunities for those whose jobs disappeared.

By Lydia DePillis February 24
@lydiadepillis

A couple of weeks ago, some economists from Goldman Sachs came out with a rosy pronouncement: "Millions of new jobs and plenty of good ones," read the headline on a note to investors. High-wage employment appeared to pick up from 2013 to the present, a change from the early years of the economic recovery, which generated a disproportionate number of low-wage jobs.



And you donít have to just take it from an investment bank. The Department of Labor has run its own numbers, and saw similar growth back in October, rendered in absolute numbers rather than growth rates (which Laborís Chief Economist Heidi Shierholz says held through the end of 2015 in an analysis the department completed last week).

The green bars in the graph below show changes in actual employment, and the orange line shows what it would have been if the growth had been evenly distributed. Shierholz says the loss of low-wage jobs is likely a result of workers in those categories having their wages bumped up above $10 an hour, as the huge growth in low-wage sectors from 2009-2013 led to competition for people in restaurants and retail, or finding better jobs.



That renewed growth in high-wage jobs, which started to show up in 2014, is typical of recoveries from recessions: Low-wage retail and restaurant jobs come back first, as consumers start to buy small-ticket items and go out to eat again. Later on, the profitability trickles up, leading firms to make more expensive hires. Overall, the trend could be responsible for the small uptick in wages that's become evident in recent months, as well.

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