Submitted by Mark Hanna
Courtesy of MarketMontage. View original post here.
Some pretty interesting data in this graph via Conversable Economist, especially in the light of the rancor that is raised each time the idea of a higher wage floor is brought forth. Among the major developed “high wage” countries, the U.S. has the highest share of workers doing “low wage” work.
If you are wondering what the definition of “low wage” is, he cites – those that involve earning two-thirds or less of the median hourly wage: that is, those earning less than about $10/hour.
It is pretty staggering to think that a quarter of all work in the U.S. is at $10/hr or less – that is about $22K or less, if fully employed on a 40 hour week.
I’ve written many times over the past 3-4 years how the recession has really hollowed out the middle class – as those jobs were eradicated what has come back has been lower wage work, and to a lesser degree higher wage work. [Feb 3, 2011: Jobs Coming Back but the Pay Stinks!] [Sep 2, 2010: NYT- New Jobs Mean Lower Wages for Many] [Sep 4, 2009: Job Seekers Across America Willing to Take Substantial Pay Cuts] But the bona fide mid level wage jobs have been decimated. As an example:
- Bernhardt’s analysis of the first seven months of 2010 found that 76% of jobs created were in low- to mid-wage industries — those earning between $8.92 to $15 an hour, well below the national average hourly wage of $22.60.
This is quite ominous long term, and it seems like it is not as recent of a development as I thought per this chart; things already sucked as of 2009.
On the plus side, this argues that perhaps some (not a ton) of work will find its way back to U.S. shores as we’re becoming the “cheap labor” center among developed countries. But it also argues that massive government assistance is not a temporary situation, but something that is going to be a consistent situation as a greater share of Americans can no longer subsist on wages offered by employers. [Nov 5, 2010: USA Today: Anti-Poverty Programs Surpass Cost of Medicare in US] [May 25, 2010: 1 in 5.5 Dollars of American Income Now Via Government; All time High] There are of course a lot of other implications but I thought it was interesting to pass this along – I doubt many people would know this. I didn’t!
Disclosure Notice
Any securities mentioned on this page are not held by the author in his personal portfolio. Securities mentioned may or may not be held by the author in the mutual fund he manages, the Paladin Long Short Fund (PALFX). For a list of the aforementioned fund’s holdings at the end of the prior quarter, visit the Paladin Funds website at http://www.paladinfunds.com/holdings/blog
