Stuck in the Middle: The Disappearing Middle-Wage Job

By Mike Carnathan, Manager of ARC Research & Analytics Division

By Mike Carnathan, Manager of ARC Research & Analytics Division

If you “google” the term middle-class, you will get a slew of results decrying the erosion of America’s middle-class, along with an equally dizzying number of explanations for why this is happening. After all, this is a worrisome trend that is contributing to greater income inequality and an unbalanced economy that isn’t working for everyone equally.

Middle-wage jobs simply aren’t growing as fast as higher- or lower-wage jobs. Click To Tweet

We wanted to localize the story and see what the trends were in metro Atlanta by exploring the plight of middle-wage jobs since the end of the Great Recession. What we find jibes with the headlines we’ve seen nationally over the past few years – middle-wage jobs simply aren’t growing as fast as higher- or lower-wage jobs.

Median Annual Wages/Job Change

Median Annual Wages/Job Change (click to enlarge)

We examined occupation data from the Bureau of Labor Statistics and stratified them, somewhat arbitrarily, into either high-, medium- or low-wage occupations. We found that while high-wage jobs experienced some growth between 2010 and 2014 and low-wage jobs experienced a lot of growth, middle-wage jobs didn’t budge.

Next we looked at how wages have changed in each of these occupational groupings. We find that while wages have declined across most occupations, the decline is most pronounced in middle-wage occupations.

Stuck_chart 2

Median Annual Wages/Wage Change (click to enlarge)

As these charts show, growth in jobs and wages in middle-wage occupations has been either sluggish or, in many cases, non-existent in metro Atlanta since 2010. Which begs the question: Is this a metro Atlanta thing? Or is this part of a broader national trend?

Atlanta and Chicago are the only metros to have essentially no growth in middle-wage occupations since 2010. Click To Tweet

The answer is “Yes” to both. When compared to a selected group of peer metros, we find that all metros have experienced pretty strong growth in both high- and low-wage occupations. Metro Atlanta has slightly stronger growth in low-wage occupations and slighter weaker growth in high-wage occupations but, overall, is still in line with the selected metros. Where metro Atlanta diverges is growth in middle-wage occupations. While sluggish in all metros and nationally, Atlanta and Chicago are the only ones to have experienced essentially no growth in middle-wage occupations since 2010.

chart 3

Employment Change by Wage Levels (click to enlarge)

Why is this happening? Well, that’s the hard part. No one has pin-pointed a single cause why middle-wage jobs are stuck in neutral and why the middle-class is shrinking. Some research points to the gap between productivity and wage growth, the decline of collective bargaining and an overall low minimum wage as primary culprits. (See examples of these arguments here). Others blame the sluggish wage growth on the U.S.’s weak labor market, which has too many part-time workers who would rather work full-time. Whatever the reasons for this middle-class malaise, crafting an economy that works for everyone is increasingly top-of-mind for national and regional leaders.

See more data from ARC’s Research and Analytic’s Division at 33°n.

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