Chicago Sun-Times: Low-wage workforce grows 30% as the number of jobs shrinks

By Francine Knowles, Business Reporter

Low-wage workers in Chicago are better educated, older and rely more on that income these days to meet basic needs than 10 years ago.

And there are substantially more of them.

That’s according to a new report released by Chicago-based Women Employed and Action Now Institute that shows nearly one in six low-wage workers here last year held a college degree.

The report, authored by Marc Doussard, assistant professor in the University of Illinois at Urbana-Champaign’s Department of Urban and Regional Planning, defines low-wage workers as those making $12 an hour or less.

The report revealed the share of payroll employees ages 18 to 64 working in low-wage jobs rose from 23.8 percent in 2001 to 31.2 percent last year. That’s a more than a 30 percent rise in the proportion of such workers.

Meanwhile the share of households with a low-wage earner that got all income from low-wage earnings rose from 45.7 percent to 56.7 percent. That’s evidence more people are relying more on those dollars to meet basic needs rather than for disposable income.

The report is “compelling evidence that as the number of jobs shrinks, people are forced to chase lower and lower paying jobs,” Doussard said. “I think this is a wake up call, and I think we need to acknowledge that low-wage jobs used to be the exception to the rule of an economy that produced a lot of mid- and higher-wage job opportunities. Increasingly low-wage jobs are the rule. This is not something that happens on the margin of the economy.”

He added while the Great Recession has contributed to more low-pay jobs, it’s the continuation of a trend.

“A lot of jobs were lost in the recession, and when you have more people chasing fewer jobs, people are forced to settle for lower-wage work,” he said. “But if you look at the business cycle before the recession from 2001 through 2007, that was also characterized by really anemic job growth.”

The report showed that the percent of low-wage workers age 30 and older rose from 54 percent in 2001 to 57.4 percent last year. And last year only 6 percent of such workers were under age 20, compared with nearly 11 percent in 2001.

“I think people often think that low-wage workers are teenagers or they’re just in the low-wage labor force for a short time, and then they’ll move on to something else or that perhaps they have very low educational levels,” said Anne Ladky, executive director of Women Employed. “There’s a lot of mythology out there about low-wage workers. We feel it’s important to get the facts out there and help people understand the magnitude of the problem and how many adults are struggling making $12 an hour or less.”

Amie Crawford and Ricardo Hardin are among Chicagoans struggling in such low-wage jobs. Hardin, who holds a bachelor’s degree in business management and an associates in criminal justice, has only been able to land a job as a shoe salesman making $8.25 an hour, he said.

“I’m having a hard time keeping afloat,” said Hardin, age 30. “It’s rough. I met a couple of college people besides myself with degrees on my job.

“I had great expectations. I thought I would be able with my degree to at least make anywhere from $45,000 to $50,000 a year and I wouldn’t have to worry about making ends meet. At this point it’s not working as I thought it would be.”

Crawford worked 35 years as an interior designer, where her salary in recent years was $50,000 a year. She moved to Chicago nearly a year ago after her husband moved here and she thought she’d be able to find a job in her field making a similar salary. But she’s since separated from her husband, and after months of looking for work, she was only able to land a job making $8.25 an hour at a quick-service restaurant in the Loop.

“The biggest impact it’s having is I’m having to draw from my retirement savings to make ends meet on a no-frills budget,” and that’s something that she can’t do indefinitely, said Crawford. “If my situation doesn’t change, I’ll have to move and maybe live with my sister. The prospects aren’t good if something doesn’t change.

“I think people think that people that work in {low-wage} jobs, that that’s their choice, and if they wanted to do something else to make more money or get a better job, they could just do that, and that’s certainly not the reality.”

Among steps the report recommends policymakers take to address the problem are raising the state’s minimum wage, which is currently $8.25 an hour, and adopting living-wage ordinances. The report adds “legislation that strengthens collective bargaining rights, paid sick time, enforcement of anti-discrimination and fair labor standards laws and efforts by employers to improve scheduling and promote training and mobility… are also crucial.

Amie Crawford 56 years old holds an associate degree interior design has previously worked thcapacity making $50000<br />
year.  Now sheAmie Crawford, 56 years old, holds an associate degree in interior design, and has previously worked in that capacity making $50,000 a year. Now she cannot find a job in that field and makes $8.25 an hour at a quick service restaurant. | Al Podgorski~Chicago Sun-Times