Mapping All the Jobs Created in the Recovery by Hourly Wage

Mish

On Friday, the BLS updated hourly wages and jobs information. Let's backtrack to the start of the recovery for details.

Hourly Wages by Job Classification

Image placeholder title

Year-over-year, hourly wages are up 2.6%. That is barely keeping up with inflation, assuming you believe BLS consumer price statistics.

Regardless, it certainly makes a huge difference where you work. Those in leisure and hospitality make an average of $15.83 per hour. Those working in utilities make an average of $40.34 per hour.

Five Lowest Paying Job Classifications

Image placeholder title

Note: Fred did not have a download for "other services" so I skipped it.

Five Highest Paying Job Classifications

Image placeholder title

Clearly the only standout here is professional and business services, the 5th best paying classification.

Middle Three Paying Job Classifications

Image placeholder title

Jobs in 2001 vs 2010 vs 2018

Image placeholder title

Since 2001, the big three job gainers are education and health care, professional services, and leisure and hospitality.

Education and health care, the top gainer, is a mixture of high paying professional nursing jobs and low paying home care or other caregiver jobs.

Many job classifications are stagnant or worse.

Jobs Gained in the Recovery

Image placeholder title

There are many ways to spin this data, but none of them look particularly promising. Job growth in the top four paying classifications has been very weak.

The one bright spot is job growth in the professional and business service category, a well paying classification. How long those gains can last is unknown.

Jobs gains in the two lowest paying classifications exceed gains in professional services.

Strong Jobs Recovery?

The much ballyhooed jobs recovery is a bit suspect.

Mike "Mish" Shedlock

Comments (25)
No. 1-25
Tengen
Tengen

Around here, $26.74/hr (Feb 2018 average) means two things:

1) You would never be able to afford a house, no matter how long you work. In fact, you would need a roommate for a no frills apartment if you want to have any money left over each month.

2) If you're a man with that wage, the typical woman wouldn't even deign to glance in your direction. You'd better be damned handsome!

These official numbers, which are almost certain to be overly optimistic, are hardly the stuff of greatness. Welcome to a sad life, average worker drone.

JonSellers
JonSellers

This just shows me that what can be off-shored is being off-shored to lower wage countries. We really need AI to kick-in so we can reduce pay to the higher skilled domestics.

Blacklisted
Blacklisted

You forgot to include the biggest employer - govt, which is doing just fine, thank you very much! If you include state and local govt, the growth is almost as ridiculous, as their pay. Add in the fact that most of the govt employees are over 50 (that entitled group that gets increasingly inefficient and would never dream of working one minute beyond their work hours, and takes every sick day even when they are not sick, and sucks every bit of massive health care benefit out of the system), and you've got an anchor the size of WY, VT, and DC, combined, dragging down the US economy.

Realist
Realist

The price of Labour, like any other commodity in a perfect free market, is normally based on supply vs demand. Today, there is a significant shortage of skilled labour in the US, which leads to US businesses bidding up the wages for skilled labour. In a perfect free market system, this should attract skilled labour from all over the world to come to the US, plus provide incentive for local unskilled labour to acquire the necessary skills to acquire these higher paying jobs. Of course, there is no perfect free market, and other factors come in to play.
Foreign skilled labourers are often blocked from entering the US, and increasing the number of local skilled labourers in the US is a long-term proposition. As a result, many high paying jobs sit empty. Companies cannot expand locally, and are forced to either automate more, or expand elsewhere. This is the reality of a free market system.
Of course, 50 years ago, the world was a much different place. Some unskilled labour in the US could get very high wages, provided they worked in areas with little competition and strong unions. Coal, steel, auto, and other manufacturing were not yet subject to much foreign competition, and unskilled labour could score high wages that could not be achieved by the majority of workers in the US, thanks to the strong unions that existed in those industries. Getting a job in one of these privileged industries was a ticket to a solid middle class life if you were lucky enough to get in.
The world today is very different. Competition has decimated the previously sheltered coal, steel, and manufacturing industries. Unions have lost their leverage in this competitive world and are essentially irrelevant now. The middle class is disappearing as the unskilled can no longer command higher wages in this competitive world.
Trump appealed to these people, who wanted their “well-paid” jobs back. He promised to take the US back to 50 years ago. He would once again “protect” these previously protected industries from unfair foreign competition and tear up free trade deals. He would bring back the jobs that have been automated out of existence. Only he could actually “turn back the clock”. Sadly, this is all impossible for him to do. You can’t live in the past. Those days are gone no matter how loud you scream and yell.
The only area in the US that still is relatively sheltered from competition, is government. That too is going to change as financial constraints force government to lower wages and benefits for the majority of these workers over time. This will reduce the ranks of the middle class even more.
The middle class rose over a 50 year period (say 1945-1995) and is disappearing over the next 50 years (say 1995-2045).
The ticket to a middle class life used to be getting a job in a protected industry with a strong union. Those days are gone.
The ticket to a well paid future is to acquire the skills that will be in demand. Plus you will have to keep learning and acquiring new skills to stay relevant. That is the reality.

DFWRealEstate
DFWRealEstate

But on the bright side Federal Reserve economists are enjoying full employment and healthy wages. :)

DFWRealEstate
DFWRealEstate

The "gig" economy isn't working out as advertised for most, definitely not a good substitute for stable, good paying manufacturing jobs which have been lost...https://qz.com/1269172/the-epic-mistake-about-manufacturing-thats-cost-americans-millions-of-jobs/amp/?__twitter_impression=true

KidHorn
KidHorn

I was at a college graduation party yesterday. Many who either just graduated or will before the end of summer. All of them have job offers. I suspect there's a big variance in pay and prospects among those with college degrees vs those that don't have a degree.

theplanningmotive
theplanningmotive

The professional section is a catch all category with who knows what jobs thrown in.

hmk
hmk
Realist
Realist said: The price of Labour, like any other commodity in a perfect free market, is normally based on supply vs demand. Today, there is a significant shortage of skilled labour in the US, which leads to US businesses bidding up the wages for skilled labour. In a perfect free market system, this should attract skilled labour from all over the world to come to the US, plus provide incentive for local unskilled labour to acquire the necessary skills to acquire these higher paying jobs. Of course, there is no perfect free market, and other factors come in to play. Foreign skilled labourers are often blocked from entering the US, and increasing the number of local skilled labourers in the US is a long-term proposition. As a result, many high paying jobs sit empty. Companies cannot expand locally, and are forced to either automate more, or expand elsewhere. This is the reality of a free market system. Of course, 50 years ago, the world was a much different place. Some unskilled labour in the US could get very high wages, provided they worked in areas with little competition and strong unions. Coal, steel, auto, and other manufacturing were not yet subject to much foreign competition, and unskilled labour could score high wages that could not be achieved by the majority of workers in the US, thanks to the strong unions that existed in those industries. Getting a job in one of these privileged industries was a ticket to a solid middle class life if you were lucky enough to get in. The world today is very different. Competition has decimated the previously sheltered coal, steel, and manufacturing industries. Unions have lost their leverage in this competitive world and are essentially irrelevant now. The middle class is disappearing as the unskilled can no longer command higher wages in this competitive world. Trump appealed to these people, who wanted their “well-paid” jobs back. He promised to take the US back to 50 years ago. He would once again “protect” these previously protected industries from unfair foreign competition and tear up free trade deals. He would bring back the jobs that have been automated out of existence. Only he could actually “turn back the clock”. Sadly, this is all impossible for him to do. You can’t live in the past. Those days are gone no matter how loud you scream and yell. The only area in the US that still is relatively sheltered from competition, is government. That too is going to change as financial constraints force government to lower wages and benefits for the majority of these workers over time. This will reduce the ranks of the middle class even more. The middle class rose over a 50 year period (say 1945-1995) and is disappearing over the next 50 years (say 1995-2045). The ticket to a middle class life used to be getting a job in a protected industry with a strong union. Those days are gone. The ticket to a well paid future is to acquire the skills that will be in demand. Plus you will have to keep learning and acquiring new skills to stay relevant. That is the reality.

Well stated, exactly. Capitalisms creative destruction theory. However when you have the heavy hand of govt involved it F's everything up. They have stopped immigration from Mexico where much of the skilled and unskilled labor came in to fill the gap. I say secure the border but let anyone in that can and will work and pay taxes. The other problem is college costs , health care costs and housing. All of these have been ruined by govt trying to "help" It doesn't help that we have a generation of young people who don't want to do manual skilled labor.

AWC
AWC

Looks like .gov and friends of .gov have done consumed the seed corn. Oh, but Social Justice and a false sense of security take precedence over Entrepreneurship and liberty in this weird Statist-Corporatist concoction that this once free, innovative and productive society has submitted to.

Liberaldisdain
Liberaldisdain

All I can say is my son was hired in March, two months before he even graduated for a six figure job at an energy firm in Texas.

This same company laid off 7000 as recently as 2015 and 3000 the year after.

His prospects under Obama were bleak the whole time he was working on his degree. Thanks DJT.

AWC
AWC

@hmk, and I might add, social media is the new “Bread and Circuses “ designed to keep the masses distracted.

AWC
AWC

How is it, Millennials sit around in coffee shops picking at their iPhones, while immigrants hustle jobs from Home Depot parking lots? Could it be the former feels entitled to start at the top, while the latter is fine with starting anywhere?

AWC
AWC

Key? Missing work ethic?

MntGoat
MntGoat
Realist
Realist said: The price of Labour, like any other commodity in a perfect free market, is normally based on supply vs demand. Today, there is a significant shortage of skilled labour in the US, which leads to US businesses bidding up the wages for skilled labour. In a perfect free market system, this should attract skilled labour from all over the world to come to the US, plus provide incentive for local unskilled labour to acquire the necessary skills to acquire these higher paying jobs. Of course, there is no perfect free market, and other factors come in to play. Foreign skilled labourers are often blocked from entering the US, and increasing the number of local skilled labourers in the US is a long-term proposition. As a result, many high paying jobs sit empty. Companies cannot expand locally, and are forced to either automate more, or expand elsewhere. This is the reality of a free market system. Of course, 50 years ago, the world was a much different place. Some unskilled labour in the US could get very high wages, provided they worked in areas with little competition and strong unions. Coal, steel, auto, and other manufacturing were not yet subject to much foreign competition, and unskilled labour could score high wages that could not be achieved by the majority of workers in the US, thanks to the strong unions that existed in those industries. Getting a job in one of these privileged industries was a ticket to a solid middle class life if you were lucky enough to get in. The world today is very different. Competition has decimated the previously sheltered coal, steel, and manufacturing industries. Unions have lost their leverage in this competitive world and are essentially irrelevant now. The middle class is disappearing as the unskilled can no longer command higher wages in this competitive world. Trump appealed to these people, who wanted their “well-paid” jobs back. He promised to take the US back to 50 years ago. He would once again “protect” these previously protected industries from unfair foreign competition and tear up free trade deals. He would bring back the jobs that have been automated out of existence. Only he could actually “turn back the clock”. Sadly, this is all impossible for him to do. You can’t live in the past. Those days are gone no matter how loud you scream and yell. The only area in the US that still is relatively sheltered from competition, is government. That too is going to change as financial constraints force government to lower wages and benefits for the majority of these workers over time. This will reduce the ranks of the middle class even more. The middle class rose over a 50 year period (say 1945-1995) and is disappearing over the next 50 years (say 1995-2045). The ticket to a middle class life used to be getting a job in a protected industry with a strong union. Those days are gone. The ticket to a well paid future is to acquire the skills that will be in demand. Plus you will have to keep learning and acquiring new skills to stay relevant. That is the reality.

Question is why do we have a shortage of skilled labor and how do we solve that problem without having to resort to mass importation of foreign workers? A HUGE change in how we educate people. Much bigger focus on math and science starting from pre-school. More partnerships with community colleges and the private sector to get Americans trained for exactly the skills they need. What developed countries do NOT have skills shortages and why is that? I’ve head Jim Rogers say China graduates 10X the number of engineers the USA does. We have to get US women more into STEM jobs too. You can only do so much though. A lot of it has to do with parents and how they raise and push their kids. You don’t see a lot of Chinese or Indian kids in the USA majoring in history or ethnic studies or sociology. They are practical and major in degrees that get them the right skill sets. Too many Americans go into debt hundreds of thousands to get liberal arts degrees.

jfs
jfs

Question is why do we have a surplus of people who believe we have a shortage of skilled labor when wages are barely keeping up with inflation.

MntGoat
MntGoat

The median salary at Google is $200k and at Facebook $240k. I think highly skilled jobs are doing a better job at keeping up with inflation.

Casual_Observer
Casual_Observer

That doesn't keep up with inflation in the Bay Area. And those are inflated stats. New grads working at FB or Google can't afford housing.

MntGoat
MntGoat

So @jfs and @Casual_Observer ..... you are making the argument that there is really no shortage of highly skilled labor in the US? That when you read about this shortage its just all a bunch of fabricated nonsense? And that we have all the AI engineers, doctors, cancer researchers, biotech scientists, etc... we need? But companies want to bring in h1b's just to keep salaries lower?

Tengen
Tengen

Longtime IT guy here. In the early H1B days the aim was absolutely to depress American wages. Now, after a few decades, it's more of a chicken and egg question.

I have often questioned my decision to pursue this line of work in college and beyond. It's not that IT leads to a terrible life, but it leads to a far more difficult one than some of the other people I've worked around. Project managers, HR people, even lower level executives seem to have easy lives without relentless H1B competition. The credo seems to be "competition for thee, but not for me"

My dad was also a career IT guy, spent his first decade and a half as a COBOL programmer starting back in the late 60s. We both agree that American workers had it a whole lot better back then, not being on call 24/7 and not having to justify continued employment to execs who don't even understand what you do.

I know it's not a bed of roses for H1Bs, either. I dated one over 15 years ago, she had to jump through a lot of hoops and was tethered to her employer with below-market wages. Fortunately she liked where she was.

MntGoat
MntGoat

I read an article about an interesting new "college" concept vs. 4 year colleges. This "new college" basically has a one year intensive training program for kids out of high school to learn the latest skills to code. And the school partners with local tech companies where the students intern and learn exactly what they need to learn. Then get hired when they finish. The school has no up front cost. But they take a % of the students first 2-3 yrs on the job. To me that makes a lot more sense then spending 4 yrs getting a liberal arts degree and coming out with $100k in student loan debt and your only qualified to work at SBUX.

jfs
jfs

Not long ago, I worked with a guy in his 30s who was doing one of the school-tech company partnerships, as part of his plan to switch careers. One day in the office he read outloud from an article about how UCLA at Sacramento replaced its tech workers with H-1B workers. Then, he asked, "what am I doing here?" A lady in the office (who was from India) said something in a chipper voice like "well, its a globalized world. You just have to compete".
Currently, I work in an office where at least half the workers under 40 years of age are from India, maybe 2/3rds. However, I hasten to add that all the Indian workers are good people and a lot of fun to work with. But I do think that the reason that we have so many here is just to keep the price of labor from rising much. Also, I think that all the news articles are mainly labor-shortage propaganda. To the extent, there are labor shortages, it may be that other careers just look better to people, given the relentless push for globalizing the labor force. If you want to know more about this subject, Norm Matloff is a good source, because he has been studying it for more than 20 years and has even given Congressional testimony. https://normsaysno.wordpress.com/2018/01/22/underpayment-of-h-1bs-fact-not-anecdote/


Global Economics

FEATURED
COMMUNITY