Low-wage workers struggle to find middle-pay jobs

Many of the next-tier positions no longer exist, which helps widen the gap between the richest Americans and the rest of the country
Associated Press
Mar 13, 2014

For years, many Americans followed a simple career path: Land an entry-level job. Accept a modest wage. Gain skills. Leave eventually for a better-paying job.

The workers benefited, and so did lower-wage retailers such as Wal-Mart: When its staffers left for better-paying jobs, they could spend more at its stores. And the U.S. economy gained, too, because more consumer spending fueled growth.

Not so much anymore. Since the Great Recession began in 2007, that path has narrowed because many of the next-tier jobs no longer exist. That means more lower-wage workers have to stay put. The resulting bottleneck is helping widen a gap between the richest Americans and everyone else.

"Some people took those jobs because they were the only ones available and haven't been able to figure out how to move out of that," Bill Simon, CEO of Wal-Mart U.S., acknowledged in an interview with The Associated Press.

If Wal-Mart employees "can go to another company and another job and make more money and develop, they'll be better," Simon explained. "It'll be better for the economy. It'll be better for us as a business, to be quite honest, because they'll continue to advance in their economic life."

Yet for now, the lower-wage jobs once seen as stepping stones are increasingly being held for longer periods by older, better-educated, more experienced workers.

The trend extends well beyond Wal-Mart, the nation's largest employer, and is reverberating across the U.S. economy. It's partly why average inflation-adjusted income has declined 9 percent for the bottom 40 percent of households since 2007, even as the top 5 percent have fully recovered from the recession that began late that year, according to the Census Bureau.

Research shows that occupations that once helped elevate people from the minimum wage into the middle class have disappeared during the past three recessions dating to 1991.

One such category includes bookkeepers and executive secretaries, with average wages of $16.54 an hour, according to the Labor Department. Since the mid-1980s, the economy has shed these middle-income jobs — a trend that's become more pronounced with the recoveries that have followed each subsequent recession, according to research by Henry Siu, an economist at the University of British Columbia, and Duke University economist Nir Jaimovich.

That leaves many workers remaining in jobs as cashiers earning an average of $9.79 an hour, or in retail sales at roughly $10.50 — jobs that used to be entry points to higher-paying work. Hourly pay at Wal-Mart averages $8.90, according to the site Glassdoor.com. Since the Great Recession, the share of U.S workers employed by the retail and restaurant sector has risen from 16.5 percent to 17.1 percent.

"It really has contributed to this widening of inequality," Siu said.

The shift has injected new pressures into the economy. Older and better-educated retail and fast food workers have become more vocal in pressing for raises. Labor unions helped launch protests last year against such employers as Wal-Mart, McDonald's and Burger King.

Fewer teenagers are staffing cash registers, prepping meals or stocking shelves, according to government data. Replacing them are adults, many of whom are struggling with the burdens of college debt or child rearing. Some are on the verge of what was once envisioned as retirement years.

They are people like Richard Wilson, 27, in Chicago. More than 2½ years ago, a Wal-Mart store manager spotted Wilson cleaning the cafeteria at Liberty University in Lynchburg, Va.

A double major in biblical studies and business communications, Wilson had $3,000 in tuition due and had maxed out on student loans. He said the recruiter suggested that a management job could eventually be within reach for him because, "Wal-Mart is where people's dreams become a reality."

Wilson first worked at a Wal-Mart near college before returning to his Chicago hometown without a degree but with $50,000 in student debt and another job at a boutique Wal-Mart specializing in groceries.

Today, Wilson earns $9.45 an hour at that Wal-Mart and lives on the city's western edge with his grandmother. He boards a bus most mornings at 3:30 a.m. and arrives for his 5 a.m. shift in the more upscale neighborhood of Lakeview East. He has applied for promotions. So far, no success.

If he had the money for a ring and a wedding, Wilson said he would propose to his girlfriend.

Last year, 17.4 million Americans between ages 25 and 64 earned less than $10.10 an hour, the minimum wage proposed by President Barack Obama (The current federal minimum is $7.25.) That's equal to an income of nearly $19,000 for a full-time employee — less than half the median pay of a U.S. worker.

The share of Americans in their prime earning years who earn the equivalent of $10.10 an hour or less, adjusted for inflation, has risen to 13.4 percent from 10.4 percent in 1979, according to government data analyzed by John Schmitt, a senior economist at the progressive Center for Economic and Policy Research.

Nearly a third of low-wage employees last year had had some college education. An additional 10 percent had graduated. By contrast, in 1979 less than 25 percent of low-wage employees had college experience. Most had not completed high school. For millions of lower-wage workers, more schooling hasn't led to higher pay.

"Where you start out in terms of wages helps to predict where you move over time," Schmitt said.

That principle has become an alarming reality for many. Only 5.5 percent of people with jobs at the fast food chain Wendy's will earn more than $70,000 in today's dollars at that company, based on a review last year of 8 million resumes by the analytics firm Bright.com.

Just 8 percent of Home Depot employees will be so fortunate. For Macy's, 9.4 percent. By contrast, more than a quarter of Amazon staffers will exceed $70,000 a year. The ratio is even better for Verizon and AT&T workers. A majority of Ford employees will achieve that income at least once in their career. Just 10 percent of Wal-Mart workers will.

Wal-Mart promotes itself as a source of opportunity, and in some cases, that's proved true. Over 11 years, for example, Tonya Jones rose from staffing a checkout line to managing a section of a Wal-Mart supercenter in Hendersonville, Tenn. Jones, 41, said her pay exceeds $15 an hour — enough with scholarships, including one from Wal-Mart, to help put her daughter through college.

Asked whether she represents an average Wal-Mart worker, Jones said opportunities at the company boil down to personal choices.

"I want to be No. 1," she said. "I am very competitive."

That said, the data show why it's harder now for workers to rise into higher-paying fields despite an economic recovery now nearly 5 years old. About 1.9 million office and administrative support jobs were lost to the Great Recession, according to government data. That includes 714,370 executive secretaries with annual incomes averaging $50,220. And 252,240 fewer bookkeepers with average incomes of $36,640.

By comparison, the number of lower-wage jobs increased: The Labor Department says restaurants added 777,800 jobs since the recession began, general merchandise stores 345,600.

"You see adults moving into these relatively generic services (jobs) that don't require expertise, just dexterity, attention and showing up," said MIT economist David Autor. "You want people to be in jobs that have good trajectories. I can imagine you only get so efficient as a checkout clerk or a stocker."

Wal-Mart customer service manager Janet Sparks of Baker, La., trained as a bookkeeper. She owned a video rental store and worked for an accountant, a nuclear power plant, a McDonald's and a bank before joining Wal-Mart about eight years ago.

Sparks, 53, said Wal-Mart once offered a path to the middle class with merit raises of up to $2 an hour. The company ended those raises, while making more employees eligible for bonuses based on a store's overall performance. It also introduced what's called "optimal scheduling" to match employees with expected sales. It can mean that workers whose shift ended at 11 p.m. might have to begin their next shift at 7 a.m., Sparks said.

Sparks said the erratic schedule makes it hard for employees to earn additional income from a second job. She joined Wal-Mart in 2005 with the expectation that the since-cancelled merit pay raises would eventually let her clear $21 an hour. She instead received smaller raises and now earns $12.40.

Wal-Mart said it began to change its bonus system in 2006. It now pays bonuses of up to $2,500 to some employees based on their store's performance.

And it says its scheduling system considers the preferences and availability of employees and gives them three weeks' notice of their work calendars.

Other retailers have also adopted optimal scheduling. Starbucks was sued by a former employee over its system, according to Massachusetts court records. Starbucks said on its corporate site that the "goal" of optimal scheduling "was to provide the most working hours to those partners who were available to do so."

Retail industry executives argue that stronger economic growth would make it possible to pay higher wages. The economy grew just 1.9 percent last year, well below its post-World War II average of 3.2 percent.

"For generations of Americans, it was an entry-level wage that got you into a position in which you could gain skills and experience and then get connected to the workforce and move up," said Matthew Shay, CEO of the National Retail Federation. "The problem now is the economy is not growing rapidly enough to create those other opportunities."

Simon's suggestion that many Wal-Mart employees might be better off leaving for other jobs surprised Wal-Mart cashier Joanna Lopez. A 26-year-old single mother, she owns no car and lives with her church pastor near Fremont, Calif. She collects food stamps and receives insurance through California's version of Medicaid.

Lopez started at Wal-Mart as a temp in August 2011, after being unable to land a hospital job with her associate's degree. Her pay has risen from $8 an hour to $9.20, after she moved from part time to full time. The suggestion by a Wal-Mart executive that some employees might be staying too long offended her.

"To me, that's an utter humiliation," Lopez said. "How can you sit there and have management say that we should find other jobs because this place is 'no bueno?'"

Wal-Mart spokeswoman Katie Cody said that its employees have "endless opportunities for advancement" and that "management is not saying that people should find other jobs."

"But when the economy is doing well, people tend to move around more," Cody said. "If people were moving around more, that would be a better indicator that the economy is doing well, which is good for our customers, our associates and our business."



Why do we subsidize medical research? Technology? Engineering?

And I don't recall demanding everything. I just get tired of people only caring about STEM fields. Yes, those fields are important, but not anymore important than many others. Sorry, but I don't want to live life like a robot. It's bad enough that you can hardly ever talk to a real person on the phone anymore when you call a business.
There are those things that save lives. And then there those things that make lives worth living. Both are important. Even ancient man realized that.
We are losing the very thing that makes us civil and human. Not everyone needs to be a mathematician, or an engineer, or a nurse. It's almost to the point where we need people to teach us how to properly communicate with one another again, how to have healthy relationships with others, how to solve problems and handle conflicts. We need to encourage great thinking of all sorts.


Scientific and technological knowledge grow at an exponential rate but humankind's emotional intelligence and ability to cope remains constant. Thus, in order to function in today's society people have to have STEM skills but a cursory reading of comments herein demonstrate that people's social skills, and emotional health are imperiled.

So I agree with you the arts, parks, music as well as spirituality are important to preserve and promote to bring some meaning to our lives and appreciation of our humanity.


Time Magazine did a cover story in their February 24, 2014 edition entitled "The Diploma that Works: Inside the six year high school." The article details P-Tech Model schools. Students pursue an emphasis on STEM courses and graduate with an associates degree and a job.

The story underscores the facts that most high schools are not preparing students for jobs and too many unqualified people pursue college degrees that really don't lead to employment.


My question: why are we Democrats even engaging in conversation with conservatives about job growth, unemployment or the economy? Over the past 10 years, they have been wrong about nearly everything in those 3 categories. The only thing they have proven they can do is to make things worse. Their arrogance is matched only by their ineptitude.

Do they really expect us to forget that we lost millions of jobs during the Great Recession that was a direct result of their economic policies? Where do they think all the unemployed/underemployed people came from? We lost 7.5 million jobs in America during the Recession. Since then, we've gained 6.5 million of them back under Obama.

Do the math. Since 2007: 7.5 million fewer jobs under Republicans. 6.5 million more jobs under Democrats. No amount of hot air can explain away those numbers, kids....


Re: "Great Recession,"

No economy continues growing exponentially forever.

The boom and bust of credit expansion and the Fed Resv. has been at it again.

"Buffett Calls Fed History’s Greatest Hedge Fund":


Per usual: You're far too focused on politics and not enough on central bank policies.

"Do the math":

Lowest labor force participation rate in over 30 yrs.

Feb. 1979: 63.8

Feb. 2014: 63.0

1979; who was POTUS??


The Big Dog's back

contangonut never answers questions and always changes topics.


Re: "never,"


Do you need to go outside piddles?


So how many more years does Obama have to be in office before liberals quit complaining about income inequality? He has been in office 6 years and 2 of them he had a completely Democrat Congress. In those two years all he managed to do is pass the ACA, a bill that come to find out will now cost the taxpayers over a trillion dollars in the next ten years rather than bring money into the treasury as the Democrats tried to convince the public. Yup, sounds like the Dems are doing great job.

Darwin's choice

" Please also provide scientific evidence and/or results from research studies that support your viewpoint."

Steve P

Highest poverty rate in over 20 years, highest number of people on welfare/food stamps and the lowest median family income at the end of 2013, yet another obzo miracle. Source New York Times, hardly a conservative source.

The Big Dog's back

So when you Cons tanked the country you put a bunch more people in poverty. Are you braggin'?

The Big Dog's back

When you CONS tanked the country the 1st time, Great Depression, you put a bunch of people in poverty then. Are you proud?


Re: "When,"


You REALLY need to go outside don't you lil' piddles?


Steve P you know. "Figures don't lie but liars figure." Wonder what will be said if SSI gets dinged. If things do not change watch out.


Yes obama and the dim controlled Senate, and for his first 2 years had the house alsao and accomplished what? Passed obamaScare and told the repubes that "we won" and then went golfing and spent $900 billion on 'stimulus' that wasn't as 'shovel ready' as he thought it was. Is that the change you were "hoping" for? We don't have to go back to see what this president and congress can do. We do need change and half of that "change" will come in the '14 elections.

Remember when obama said "We are the change we have been waiting for." ?... he lied. It was bush's 3rd and now bush's 4th term. Kept the bad, expanded the bad and made it worse (like extending and expanding the Patriot Act, NDAA, drones, and more)

Steve P

piddle did the seat drop down on you again when you were drinking? The poverty rate, welfare, rate increased under the liar in chief, median household income went down, reading comprehension not you strength, typical far left wackado.

The Big Dog's back

Next thing you right wingnuts will be saying is 9/11 and the Great Recession happened under Obama. Oh wait, you already have.


Here is an article that backs everything Steve P mentioned. If you don't like that is from Forbes simply click on the links provided in the article to see where the data originated.

Median Income

New income data from the Census Bureau reveal what a great job Barack Obama has done for the middle class as President. During his entire tenure in the oval office, median household income has declined by 7.3%.

In January, 2009, the month he entered office, median household income was $54,983. By June, 2012, it had spiraled down to $50,964. That’s a loss of $4,019 per family, the equivalent of losing a little less than one month’s income a year, every year. And on our current course that is only going to get worse not better.



Obama has failed the poor as well as the middle class. Last year, the Census Bureau reported more Americans in poverty than ever before in the more than 50 years that Census has been tracking poverty. Now The Huffington Post reports that the poverty rate is on track to rise to the highest level since 1965, before the War on Poverty began. A July 22 story by Hope Yen reports that when the new poverty rates are released in September, “even a 0.1 percentage point increase would put poverty at the highest level since 1965.” But a consensus survey of experts across the political spectrum indicates the poverty rate could soar from the current 15.1% to as high as 15.7%. “Poverty is spreading at record levels across many groups, from underemployed workers and suburban families to the poorest poor,” Hope Yen reports.


Recession and Recovery

Yes, the recession technically ended more than 3 years ago. But the point is that what we are suffering today is the worst economic recovery since the Great Depression. And no Obama apologists cannot say that the recovery is so bad because the recession was so bad, because the American historical record is the worse the recession the stronger the recovery, as the American economy has always before snapped back to its world leading economic growth trend line. That even happened after the Great Depression (once Roosevelt was gone). Check out for yourself the historical record of American recessions and recoveries at www.nber.org.


This article is a year and a half old and things have not gotten better, you can look up the facts on your own if you believe otherwise.


And a recent article on the number of folks out of the work force that are under retirement age...


The Hero Zone's picture
The Hero Zone

What I am about to say isn't a gripe against the possible causes, simply things to consider as we wonder about this "gap".

Technology and advancement are a bit of an ouroboros. We make tools to help us do things easier/better/faster/cheaper. Those new tools help us make even better tools which help us make even better tools. Those same tools also make it so more people can do more tasks that otherwise they couldn't. This is a wedge that will continue to be driven as more jobs become "unskilled" due to the technology in use. Meanwhile the jobs that serve the technology will continue to be in demand and consume the "skill" that was required before on the other end of the device.


Even the President has lamented that ATMs and automatic ticket dispensers at airports are contributing to unemployment.

Increasing litigation/demands against workplaces that offer strenuous or possibly unsafe conditions is a big deterrent in employing people to do a great many jobs that otherwise need doing. This too is a cycle. The more safe and compliant things become the less of a need for the imposing forces to exist, even if the dangerous jobs aren't shed in response to the requirements.

EPA, etc.
The more in terms of quantity and onerous the regulations are that stem behavior, the less of it will be seen. There is no use in lamenting the loss of industry in the U.S. when our laws and regulations all but forbid it. When the EPA wants to regulate roadside ditches by claiming them to be navigable waterways, when the EPA seeks to control every facet of life because a court ruled that CO2 (what we exhale and is intrinsic to our life, plants', and our planet's) is a pollutant, etc. what motivation is there to spend money or invest in any major project?

So where do these three aspects leave us? With many jobs that don't "require" high amounts of skill nor a need to pay a bonus for it being hazardous or especially laborious. Less risk, less reward. It is a constant. I'm not necessarily advocating for the dissolving of the above entities, but if you want to employ more people in (for example) a coal mine just take away the machinery, for one.

You'll need thousands of people to do the same job. The pay goes up because if you drop the safety standards you will need to give them hazard pay (or in a Swiftian way always need new employees...). Drop the environmental regulations and the same mine will continue to grow and need more and more people to work harder and harder.

Seems like a mix for increased pay, but at what cost if not monetarily?

It's funny how we are making ourselves obsolete.

Dr. Information

Brother I tell ya. The liberals on here who think that every person working, works hard, shows up to work…etc, etc, etc. If I could only tell you the countless small business owners I know that say otherwise.

Its really simple. If you do not like your job, its up to YOU to change it. Period.
If you want more money, you need to get a better job, that is up to you. Period.

People have nothing else to blame but themselves. Period.


In Huron County prior to the elections Janesville, CVG, & Norwalk Furniture were on their way out. That helped to push H.C. unemployment up.


For over twenty years, I have written US Congress men and women asking them to STOP foreign aid. Over five years ago, I sent a letter to to the General Accounting Office asking for a list of the previous ten years showing how much foreign aid was sent to which countries, what it was for and who proposed it. Funny, I never recieved an answer.

If we stopped giving away trillions of dollars to other countries
and used a small portion of it to house homeless people and aid Native Americans, the Federal Government would save money and increase jobs at home. Teach the homeless to be security, clean rooms, bookkeeping, maintenance and etc. This may provide a
chance for some to improve their lives.

Before some of you point to Indian run casinos as a cure-all, research how much they pay in state taxes in some states. I lived
in Arizona for 7 years. The governor at that time wanted to take 40% of their profits in taxes. The Indians fought to keep it down very little.

In addition, I have lived in Minnesota for 5 years. We traveled, shopped and ate in the Soiux Indian reservations. I was ashamed of how we have treated these people. They lived in shacks.

If you do not believe me, on your next vacation, drive into the reservations and see for yourselves. Take time and talk to the
Indians, ask them how much help the government has given them
after stealing their land.

I am tired of seeing our brave young service men and women being
cripled and killed fighting wars to "defend" a country who hates
us, has no means of making their own people help defend their own
country, then pleads for billions of dollars to rebuild their countries. Of course our rich politicians can't right checks fast
enough. Put a stop to this damn foreign aid.

Oh by the way, why is it our government is so willing to ship out our soldiers, then turn their backs on them and their families after they are permanently wounded or killed? Someone please explain that to