Econintersect: A report out last week from NELP (National Employment Law Project) was entitled "The Low Wage Recovery and Growing Inequality". The conclusion of the report was that there has been a dramatic shift of jobs out of the middle class and into the lower wage occupations. Looking back to 2001 the report finds that the effect transcends just the recovery from the Great Recession, but has been taking place over the past 10 1/2 years. The lowering of pay by economic and social processes in order to improve international competitiveness is called "internal devaluation".
Here are some of the conclusions from the NELP report:
- Lower-wage occupations were 21 percent of recession losses, but 58 percent of recovery growth.
- Mid-wage occupations were 60 percent of recession losses, but only 22 percent of recovery growth.
- Higher-wage occupations were 19 percent of recession job losses, and 20 percent of recovery growth.
- Since the first quarter of 2001, employment has grown by 8.7 percent in lower-wage occupations and by 6.6 percent in higher-wage occupations.
- By contrast, employment in mid-wage occupations has fallen by 7.3.
The three wage levels are defined as for median wages in 366 detailed occupations:
- Low-wage: $7.69 $13.83
- Mid-wage: $13.84 - $21.13
- Higher-wage: $21.14 - $54.55
The table below shows the low-wage occupations with the largest employmentn increases from Q1 2010 to Q1 2012:
Seven of the ten low-wage jobs with the largest employment gains have nothing to do with exports. On the other hand, nine of the fifteen mid-wage jobs could possibly have something to do with exports. See table below:
Editor's note: So, if internal devaluation has something to do with making exports more competitive, what has happened can not be called internal devaluation. It is more like internal decay.
- The Low Wage Recovery and Growing Inequality (Data Brief, NELP, August 2012)
- Internal Devaluation (Wikipedia)