Minnesota job growth tainted by low wages

  • Article by: ADAM BELZ , Star Tribune
  • Updated: September 8, 2012 - 9:31 PM

The traditional middle class is finding it harder to find jobs that will help support a household.

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Janice Aanenson graded some papers at home for one of three part-time jobs she holds after being laid off as a college administrator.

Photo: Glen Stubbe, Star Tribune

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The Minnesota job market's gradual recovery from the Great Recession has come with a pronounced shift in the type of work available, with a growing share of openings in the lowest-paying positions.

Almost 36 percent of vacancies today pay a median wage of $10 an hour or less, according to a Star Tribune analysis of state data. Meanwhile, the portion of jobs that pay $10 to $25 an hour has dropped sharply, from nearly two-thirds of openings a decade ago to 43 percent now.

The labor data shows that while the state's economy has resumed growing, recovering more than half the jobs it lost to the recession, it is also changing in ways that work against the traditional middle class.

"There are, I would say, a preponderance of lower-end jobs," said Jane Samargia, director of the employment services firm HIRED, which works with 10,000 people a year in the Twin Cities. "It's still a buyer's market."

Janice Aanenson was earning upwards of $45 per hour as an administrator at Capella University when she was laid off in February 2011. She has been piecing together a living and is now working three part-time jobs.

Middle-income openings are scarce, she said. Employers are looking to hire either low-wage workers or specialists and top executives at high wages.

"I've gone to looking for the $15 to $20 an hour jobs, and they're just not there," said Aanenson, who's 49 and lives in Brooklyn Park. "The $7.50 to $9 an hour jobs, those are a dime a dozen. But how do you make a living in the middle class when you have a house and everything else?"

While the August jobs report released Friday showed that slow job growth persists across the country, that has not necessarily brought higher pay, according to the National Employment Law Project. Lower-wage occupations constituted 21 percent of jobs lost in the recession, but have accounted for 58 percent of jobs added in the recovery.

At the same time, there also has been marked growth in the portion of vacant jobs that pay quite well, a sign of both the vibrancy of the information economy and the bargaining power of skilled workers. Jobs that pay a median of at least $25 per hour in today's money have grown from 4 percent of vacancies in 2002 to 19 percent in 2012.

Most of the best-paid, high-demand jobs are technical, such as computer systems analysts, software developers, computer user support specialists, mechanical engineers, industrial engineers and construction managers.

"Technology cuts both ways. It removes some of those middle jobs," Samargia said. "On the other hand, because use of technology for so many things has increased, you need to know how to use it, and you need to know how to use the latest thing, and you need to analyze what's needed."

It's a long-term trend, and it's driven not just by the elimination of middle managers but by the decline in construction and manufacturing jobs in the state, said Larry Wohl, who teaches economics at Gustavus Adolphus College in St. Peter. A fifth of jobs in those two sectors has been erased in the past decade.

"I would think the traditional, really good blue-collar occupations are going to be manufacturing and construction," Wohl said. "If manufacturing is just a smaller piece of the puzzle, and that's where a lot of those middle-income jobs were coming from, then that's the question, is whether or not those jobs are ever coming back."

Jobs building homes and products have been replaced by jobs in the service sector, which often cannot be exported but don't pay as well.

The five jobs with the most openings in Minnesota are retail sales, combined food prep and serving, heavy and tractor-trailer truck driving, nursing assistants, and waiters and waitresses.

Those five categories account for 11,434 openings in the state, and only truck drivers fall squarely in the middle-income bracket, earning a median wage of $17 per hour. Retail and food service positions pay a median between $7 per hour and $8 per hour, pay that puts workers below or close to poverty level, depending on the size of their household.

Aanenson thinks some of the jobs that are disappearing are middle manager positions in which people mentor and help younger employees develop into leaders.

"They're not hiring people to help the young folks be successful," she said. "Those jobs are not there."

Adam Belz • 612-673-4405

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