Middle Class Jobs Are Being Replaced By Burger-Flipping, Retail Sales, And Other Lousy Low-Pay McJobs

Aaron Task, Yahoo! Finance
Sep. 4, 2012, 3:08 PM

There's been a lot of talk in recent years about the "hollowing out" of the American middle class.

A new study by the National Employment Law Project (NELP) confirms the troubling trend.

NELP broke down jobs into low/ middle/and high-wage groups based on median incomes. Looking at the period from early 2008 through the first quarter of 2012, the study found:
"High-wage" occupations accounted for 19% of the jobs lost during the Great Recession and 20% of the jobs gained during the recovery.
"Mid-wage" occupations suffered 60% of job losses during the recession but only 22% of the growth during the recovery.
"Low-wage" occupations accounted for 21% of the losses and a whopping 58% of the growth.

In other words, NELP found what many Americans already know: The market for middle class jobs has shrunk and most of the jobs that have been created during the recession are in low-income areas like retail and food services.

"In short, America's good jobs deficit continues," NELP said in a summary of the study. "Policymakers have understandably been focused on the urgent goal of getting U.S. employment back to where it was before the recession…but our findings underscore that job quality is rapidly emerging as a second front in the struggling economy."

Beyond the recession itself, several factors are contributing to these trends:
Globalization, which has sent manufacturing jobs overseas
The bursting of the housing market, which crushed the construction industry
Deep cuts in state and local governments, which accounts for 485,000 mainly mid-wage jobs lost since February 2011

Last week at Jackson Hole, Fed Chairman Ben Bernanke said the employment situation is a "grave concern" but denied there has been a "substantial structural change" in the economy to account for it. Edward Lazear, former top economic adviser to President George W. Bush, made a similar argument in the WSJ today.

But if you look at the long-term trend of rising income inequality and the shorter-term trend described in the NELP study it's pretty clear something "structural" is going on — and not just with the American economy but the larger American experience.