Newly unemployed workers usually come out swinging, expecting to equal the wages they lost and shunning lower-paid work. Six months later, he said, that impulse is beaten out of most folks.
“It completely evaporates after they exhaust their unemployment insurance,” he said.
The McLeans met at a house party in Duluth, got married and moved to the Twin Cities in 1974, when their oldest son was an infant.
Bob had a two-year degree in mechanical design and landed a job at what is now Seagate Technology, where he worked for 27 years. Once the couple’s three boys were old enough, Liz earned a couple of two-year computer degrees for herself and landed a job she loved, working on the IT help desk at Fabcon, a concrete company in St. Paul.
Bob, 65, lost his job first, in January 2009. It wasn’t a huge surprise — he was among the oldest in his department, he said. He took a year of severance, went to the state’s dislocated worker program, rewrote his résumé, took classes in computer-assisted design programs and started looking for jobs.
A month later, Liz lost her job. She worked stints on the IT help desk at Pella Corp. and Mystic Lake Casino. Now she works for a company that sells books to colleges. It’s interesting work in a good department, but then, “every job since I got laid off at that other place has been lower in pay,” she said.
Bob McLean worked a three-month contract at another manufacturer, which wasn’t renewed. Now he drives a school bus in Chaska. The job starts early and ends late. Bob wishes it paid more, but he gets a kick out of the slow-moving kindergartners with their giant backpacks.
“They’re harmless, but it’s hard to control them on a bus,” he said.
There’s a good reason people who lose their jobs take lower-paid positions: That’s what’s available.
The median hourly wage in the United States fell 2.8 percent from 2009 to 2012 after factoring in inflation, according to analysis by the National Employment Law Project. Some 43 percent of all U.S. job growth in the recovery years of 2011 and 2012 was in the generally low-wage categories of food services, retail and temp agencies.
This is not unusual after a recession, according to research by the Federal Reserve Bank of Atlanta, but it’s also a long-term trend.
The economy has for decades been disproportionately shedding middle-skill jobs that command middle-income wages, researchers at Duke University and the University of British Columbia have shown. The most recent decade was the worst of three bad ones in a row for the middle class. Between 2000 and 2011, the economy shed 11 percent of its middle-skill jobs, according to the researchers’ analysis, while low-level employment increased 16 percent.
“We’re just seeing more of what we’ve been seeing over the last 20 years, but it accelerated over the recovery,” said Mike Evangelist, an analyst for the National Employment Law Project. “The real net job growth has been in these lower-wage occupations, in retail and food services, so I think those jobs are indicative of what’s available.”
That is part of the reason why people like Bob McLean, who used to earn good money, are earning less. And it helps explain why one in six people in the Twin Cities surveyed by Country Financial in 2013 said they will never recover from the recession.
A tactical shift
Bruce Hanson is more optimistic than that, but he understands the feeling.