Despite steady gains in hiring, a falling unemployment rate and other signs of an improving economy, take-home pay for many U.S. workers has in effect fallen since the economic recovery began in 2009, according to a study by an advocacy group released Thursday.
The declines were greatest for the lowest-paid workers in sectors where hiring has been strong — home health care, food preparation and retailing — even though wages were already below average to begin with in those service industries.
“Stagnant wages are a problem for everyone at this point, but the imbalance in the economy has become more pronounced since the recession,” said Irene Tung, a senior policy researcher at the National Employment Law Project and co-author of the study.
Jasmin Almodovar, a home health care aide in Cleveland, knows all about that.
She has worked for the same health care agency since 2003, and for the first four years she received an annual wage increase of 25 cents an hour. But since 2007, her hourly pay has been stuck at $9.50 an hour.
“I’ve asked for raises several times, and each time I get the runaround,” said Almodovar, who is licensed by Ohio as a nurse’s assistant.
In many ways, Almodovar’s predicament encapsulates the contradictions evident each month when the government reports the latest figures on hiring and unemployment.
And the report by NELP, a left-leaning research and advocacy group, underscores why so many Americans are still angry about the economy and with what they see as the inability of Democratic and Republican leaders in Washington to do anything to improve living standards for many ordinary workers.
One explanation may lie in the findings of a study released Wednesday by the Economic Policy Institute, also a liberal research group. Its report showed that even as labor productivity has improved steadily since 2000, the benefits from improved efficiency have nearly all gone to companies, shareholders and top executives, rather than rank-and-file employees.
Labor Department data released Wednesday indicated that productivity in the U.S. economy in the second quarter rose at an annual rate of 3.3 percent, the biggest quarterly gain since late 2013 and much better than estimated.
The Labor Department’s next batch of data on hiring and unemployment, for the month of August, is due Friday. Economists are looking for a gain of roughly 220,000 jobs and for the unemployment rate to dip slightly to 5.2 percent.
Friday’s jobs report is especially significant because it will be the last one before Federal Reserve policymakers meet in mid-September to decide whether to go ahead with or delay their long-telegraphed move to raise short-term interest rates from near zero.
The fall in the unemployment rate from a post-recession high of 10 percent is certainly good news, Tung said, but NELP’s analysis showed that once inflation was taken into account, median wages across all occupations fell 4 percent between 2009 and 2014.
Wage declines in the lowest-paid occupations were much worse, dropping 8.9 percent for restaurant cooks and 6.2 percent for home health aides.
Along with stagnant or falling wages, one of the most persistent complaints about the current economic expansion is that many of the jobs created so far have been low-paying ones. That has changed recently, with more hiring in better-paying fields like business and professional services.
The past year has been the best for the job market since the end of the recession. Employers have added, on average, 243,000 people to their payrolls each month. That would normally constitute a hot job market, said Torsten Slok, chief international economist for Deutsche Bank Securities in New York.
“When you see all those jobs being added per month, you think, ‘Come on, how can this be bad?’” Slok said. “But there has been a lot of pain and suffering, and people have been losing their skills or have not been able to reskill.”