After years of producing generally low wage jobs, America’s labor market is now producing a better mix of positions. Hiring has accelerated in segments such as construction, manufacturing and professional services in recent months – sectors with median wages of at least $20 per hour. As reported by the Washington Post, nearly 40 percent of the jobs created over the past 6 months have been in high-wage industries compared with just a quarter during the latter half of 2013. Meanwhile, the pace of growth in many low-wage segments has leveled off or even declined.
The improvement in job quality is most welcome. Low-wage industries have generally been bouncing back from the recession more quickly, including retail and food services. They now employ 2.3 million more workers than they did in 2007. When averaged across all occupations, the median hourly wage has declined 3.4 percent since the recession after adjusting for inflation. Even prior to the recession, the U.S. economy was experiencing what academics term job polarization, with growth at the high and low ends of the pay scale, but precious little movement in the middle. Driving factors include new technologies that have dislocated many middle income workers and increased global competition.