Few Middle-Class Jobs Are Added to US Economy

In the years since the recession, income inequality has been exacerbated by the replacement of middle-class with low-income jobs. According to Labor Department data, the total number of workers earning the minimum wage or less has increased over 100%. In a similar study, the Royal Bank of Scotland found that roughly half of the jobs created in the United States in the past three years have been low-paying jobs.

Some of the strongest job growth has been in in leisure and hospitality, which added 43,000 jobs, 38,100 of which were at bars and restaurants. Retail jobs also increased, growing by 27,700. While growth in these areas is perhaps a sign of stronger consumer spending, these jobs are mostly low-wage and low-benefit. Given the amount of Americans currently working in low-paying jobs the administration has pledged to increase the minimum wage.

In President Obama’s State of the Union speech last February, he said:

“We know our economy is stronger when we reward an honest day’s work with honest wages, but today, a full-time worker making the minimum wage earns $14,500 a year. Even with the tax relief we’ve put in place, a family with two kids that earns the minimum wage still lives below the poverty line. That’s wrong. That’s why, since the last time this Congress raised the minimum wage, nineteen states have chosen to bump theirs even higher.”

The White House has argued that increasing the wage to $9 an hour from its current $7.25 and pegging it to inflation would decrease poverty, and both the president and his 2012 campaign opponent Republican Mitt Romney have supported the idea of adjusting the minimum wage to keep up with inflation.

Michigan State Senator Bert Johnson, who is running for the 13th U.S. congressional district, introduced a minimum wage increase for the state of Michigan on Thursday. The bill would raise the state’s minimum wage to $10 an hour by 2015 and peg it to the United States Department of Labor’s inflation rate.

In New York, the General Industry Minimum Wage Act states that employers must pay all employees at least $7.25 per hour.

If you have questions about the General Industry Minimum Wage Act or other employment-related legal matters, contact us today.