The macro-level news on our economy is certainly improving for indicators like gross domestic product (GDP) and overall unemployment rates. But 8.4 million fewer people have jobs now than they did before the pandemic began. And of greater impact: these lost jobs are not equally distributed among sectors or across pay categories—higher-wage workers are actually often better off than they were pre-pandemic. There is little to no job and wage growth for the middle and low-wage classifications. What’s more vexing for equity concerns is that, as with most everything we have written about in this space since last year, the issue is not one created by COVID-19 but a pre-existing condition made much worse by the virus.
The map below sets the stage for our whirlwind look at wages by showing a bit of the recent past. Trends for the 2008 to 2018 period were marked initially by the depth of the Great Recession, then by fairly strong production bounceback in most of the nation. Yet, middle-wage jobs declined in Georgia over those ten years, as in many Southern states.
For more local/metro evidence that this problem existed before and was made worse by COVID, consider the chart that follows. The 2015-2020 period was one defined almost exclusively by moderate recovery (2015-2017), with slower growth in the late 2010s and the pandemic coming in at the end of the time period. Economy-wide, jobs have shown a heathy increase, but that has only been because the 124,000 increase in high-wage and 52,000 gain in lower-wage jobs have canceled out a loss of 24,000middle-wage jobs.
Though middle-wage jobs have seen decline, wages in the then-still growing lower-wage jobs have been hit the hardest. Atlanta has done more poorly in relevant sectors than have most of the selected peer metros, as the change in wages among most of these low-wage occupations is lower in Atlanta than elsewhere. Exceptions are Truck Drivers and Office Clerks.
And what’s happened to equity in wages since that 2015 to early 2020 period—as you’d guess from events of the last year— were not good. The majority of job losses, as we know, have been in industries paying low and low-middle wages. Those jobs were in lower margin businesses (e.g. retail, food, travel and tourism) that often could not offer remote work options and were more quickly driven by their lower margins to layoff or let go employees more rapidly than sectors that more frequently pay higher wages. The charts below—the first from McKinsey’s Future of Work and the following two from the Opportunity Insights website—show that the performance deficits for middle and lower-wage jobs have been exacerbated by the pandemic, at the national, state, and local (metro area) level.
And, in another exhibit from McKinsey’s Future of Work report, we see something of great concern: Baseline projections indicate that the growth of high-wage positions, at the expense of middle and lower-wage slots, will continue.
Finally, a reminder: These wage differentials don’t just show up in economic mobility statistics. They permeate through and percolate into other regional quality-of-life indicators like neighborhood stability, housing diversity, transportation options. The map below shows that low-wage workers more typically live south of I-20 and that, while low-wage jobs are pretty much everywhere, there are concentrations north of I-20. We don’t want to sound like the Ghost of Christmas Future or something, but if these wage trends (i.e., more high-wage and low-wage jobs but zero or negative growth in middle-wage jobs) that we have discussed above are unaltered by economic and social conditions, policies and programs, the spatial mismatch illustrated on this map will get even more pronounced. And our housing and transportation problems, which are caused by and contributing to those wage gaps, will almost certainly get worse as well.
