Low wages, race, education, Indiana and other sundries

A different subject, sure, but the National Archives has great pictures.

I noticed this Economic Policy Institute (EPI) report on low-wage worker trends via Derek Thompson – who has an excellent overview you should go read on the top 10 low-wage states and jobs. For my part I just wanted to note a few things, but first here’s Thompson on the sorts of jobs we’re talking about:

The chart below looks at the six occupations with the highest share of low-wage workers (in RED) and also shows you their share of the total workforce (in BLUE). The upshot is that the top six six categories — each with at least a third of their workers earning less than $23,000 — make up more than one-third of the economy. Broadly speaking, the occupations with some of the worst pay are local-service jobs, especially in the non-tradable sector.

So mostly we’re talking about food prep, and to a lesser extent personal care/building maintenance.

Anyway, here is the presentation by race (by percentage):

Some obvious disparities; African Americans and Hispanics are overrepresented in the poverty-wage workforce – 11 percent to 14.1 percent and 15.3 percent to 23.6 percent, respectively.

Which sort of relates to my first point; education still matters, especially for racial minorities. Thompson writes:

[…]What you get is a classic argument for the power of education. Four-year graduates are underrepresented in the poverty workforce and less-than-high-school grads are overrepresented in the poverty workforce.

Coupled with this graph I threw together:

Of course even the percentage of those that start and don’t finish do better than those that never started:

The other thing I wanted to highlight was that my home state of Indiana didn’t make Thompson’s list but it came close – 12th, after New Mexico:

The way EPI breaks this down by hourly wage:

Thus, workers at 0 percent to 100 percent of the poverty threshold earned from $0–$10.73 per hour in 2010, while workers falling in the category of >100 percent to 200 percent of the poverty threshold earned from $10.74–$21.46 per hour. Workers between >200 percent and 300 percent of the poverty threshold earned from $21.47–$32.19 per hour, while workers above 300 percent of the poverty threshold earned more than $32.19 per hour.

Thus, 28.5 percent of workers in Indiana make $0-$10.73 an hour, and the bulk (43.6) earn $10.74-$21.46.

As EPI notes in their assessment of the challenges ahead, education isn’t a cure-all (though it’s certainly worth promoting) and it isn’t enough to simply reach full employment (or whatever the rate of natural employment is…certainly greater than it is today) as the economy recovers. We’re also not necessarily talking about future workers needing more education or training to fulfill low-wage jobs. It’s a matter of what EPI calls the “wage-deficit:”

What matters to workers in the near future is not only the number of jobs available, but what those jobs will look like. Whether workers in the future earn enough for their jobs to be considered good jobs depends on how earnings in their particular occupations rise, as opposed to any changes in the composition of jobs. […] Instead of facing a skills deficit, workers face a wage deficit. This is powerfully illustrated by the fact that college graduates have not seen their real wages rise in ten years.

This relates somewhat to a matter I wrote about last year concerning low-wage work in expensive cities. Some people prefer to view low-wage workers as individuals who make poor or insufficiently ambitious career decisions. This view may or may not include the notion that their poverty wage is solely a meritocratic failure. Others hold opposite perspectives. I don’t think it really matters though why any given individual is putting together a taco rather than being a doctor when thinking about food prep wages – and whether those positions pay a living wage.

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2 responses to “Low wages, race, education, Indiana and other sundries

  1. Pingback: The jobs-skills divide revisited | Punditocracy·

  2. Pingback: Some notes on how we spend our money | Punditocracy·

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