Low paying jobs the new norm

By Charles Dundley

During 2013, more than 2.1 million jobs were added to payrolls in the United States. The fact that millions of adults landed new jobs, some after struggling through a long period of unemployment, is good news. However, many of these jobs pay less than the average annual wage American workers make.

A job isn’t always a step up
According to Bloomberg, “Occupations paying below-average wages accounted for more than half of last month’s U.S. payroll increase, a dynamic that may restrain consumer spending and the economic recovery.” In addition to paying less, employers are also hiring more part-time and contingent workers, also referred to as contractors.

Average hourly wages that American workers earned as of May 2013 was $23.89. However, in the hospitality, restaurant, amusement park and casino industries, the average hourly wage Americans earned as of 2013 was $13.45. People working in the retail industry made an average of $16.63 an hour, while temporary workers were paid an average of $15.74.

Desperation may be driving the decision to accept low paying jobs. Economist Heidi Shierholz says that, “Low-quality jobs are always available but go unfilled when there are other jobs.” She continues, “At a time like this, workers have to settle for anything they can get.”

Not only are low paying more readily available than higher paying jobs, lower paid workers are sometimes the first to be released when the economy starts to head south. In fact, during the recession 21% of the jobs that were lost were jobs that paid $13.83 an hour or less.

A downside to accepting low paying jobs, especially if a worker previously worked a higher paying job, is that it could take years to catch up to a previous, much better income level. In fact, some specialists say that if a worker falls behind in their income by 20% or more a year, they may never reach the point where they’re earning the higher wages they once brought home. If a worker in near retirement age, accepting a low paying job could also negatively impact a worker’s chances of saving enough money for retirement.