California Budget Project Report finds disturbing trends for middle and lower wage workers.
By Steven Bliss/California Budget Project
Earlier this month, the California Budget Project released our annual Labor Day report, taking a look at the latest employment and wage trends, what they mean for workers and their families, and some key implications for public policy. This new report shows that even after more than three years of job gains, California’s recovery from the Great Recession thus far has left many workers behind.
Uneven Progress: What the Economic Recovery Has Meant for California’s Workers finds that Californians continue to face a deeply challenging job market, with long-term unemployment down only slightly from a record high, much of the state still stuck in double-digit unemployment, and wages among low- and mid-wage workers still below where they were prior to the recession, after adjusting for inflation. Here are some key findings from the report:
- Even after three years of job growth, California has about 600,000 fewer jobs than it did prior to the recession, and unemployment remains high in many parts of the state. During the first half of 2013, most California counties — 34 out of 58 — had an average unemployment rate in the double digits.
- The share of unemployed Californians who have been seeking work for six months or longer is down only slightly from a record high and stands at 43.1 percent. In other words, more than two out of five unemployed Californians have been looking for a job for at least half a year. What’s more, many workers who do have jobs are unable to obtain full-time employment. Involuntary part-time employment — when workers cannot obtain a full-time schedule even though they want one — is currently a reality for more than 1.3 million workers, or 8.0 percent of all employed Californians.
- Compared to prior recoveries in California, the current recovery is more heavily reliant on service industry growth that typically pays lower wages. For example, the leisure and hospitality industry accounted for nearly one-quarter (24.4 percent) of total job growth between February 2010 and June 2013, a much larger contribution than this industry had made to earlier economic recoveries.
- Due to recent gains, high-wage workers — those at the 80th percentile of California’s earnings distribution — have seen inflation-adjusted hourly earnings nearly return to their 2006 level. Meanwhile, inflation-adjusted wages of low-wage workers (those at the 20th percentile) remain 5.9 percent below their pre-recession level, while those for mid-wage workers (with earnings exactly in the middle of the distribution) are 3.8 percent below the pre-recession level.
Uneven Progress highlights the importance of state policymakers taking actions to support workers and their families and foster broadly shared prosperity over the long term. These include raising the minimum wage, boosting support for child care and the CalWORKs Program, and reinvesting in education across the spectrum — early education, K-12 schools, and colleges and universities.
In the coming weeks, the CBP will issue additional analyses on California’s job market recovery and how the state’s workers and their families are faring. Stay tuned to this blog and our website, and be sure to join our email list to receive all the latest updates.