Nov 13, 2019 - Economy

Where low-wage workers are being left behind

Adapted from Brookings; Map: Axios Visuals 
Adapted from Brookings; Map: Axios Visuals 

Today's low-wage workers are concentrated in southern and western states and are often locked out of moving up economically because they can't afford to live in cities that offer better-paying jobs.

Why it matters: Low-wage and entry-level workers are more likely to be negatively affected by automation in the workforce and less equipped to weather an economic downturn, research suggests.

The impact: "My sense is a lot of people see what's happening around them — the move to self-service kiosks in retail and fast-food restaurants, the move to automation in warehouses," said Martha Ross, fellow at Brookings' Metropolitan Policy Program. "They feel replaceable and undervalued. They see technology as a threat."

What's happening: The share of low-wage workers varies widely between cities, according to a Brookings Institution analysis of data from across 373 U.S. metro areas.

  • The report defines "low-wage" workers to include all civilian 18- to 64-year-olds who worked at some point during the last year and who are currently in the labor force. The definition excludes some students and self-employed workers because they have different earning dynamics than wage workers.

High concentrations of low-wage earners are in the South and West.

  • In Las Cruces, N.M., and Jacksonville, N.C., low-wage workers make up 62% of the workforce.
  • In these places — like Yuma, Ariz., (57%) and McAllen, Texas, (56%) — low-wage workers tend to be Latino or Hispanic, caring for children and less educated.

Low-wage earners are less concentrated in the Mid-Atlantic, Northeast and Midwest.

  • California, Md., had the lowest share with 30%, followed by Rochester, Minn., (31%), Bismarck, N.D., (32%) and Hartford, Conn., (32%).
  • In these places, low-wage workers tend to be white and more likely to have a high school diploma or some post-high school education.

Yes, but: "Even in the most productive regional economies like San Jose, there are still millions of people who are struggling," Ross said. "We can't just look at 'left-behind' regions versus 'superstar' regions. There are plenty of left-behind people in superstar regions."

By the numbers: More than 53 million people — 44% of all workers aged 18-64 — are low-wage earners.

  • More than half are in their prime working years (25–54 years old). This age group is also most likely to be raising children (43%).
  • Low-wage earners are disproportionately female (54%).
  • About a third live below 150% of the federal poverty line, which is about $36,000 for a family of four.
  • About half of low-wage workers are either primary earners or contribute substantially to family expenses.

The most common jobs are retail workers, information or records clerks, food preparation, building cleaning and pest control workers.

Middle-wage jobs used to be the bedrock of upward mobility, allowing someone with a high school diploma and some training to get a job that paid enough to support a family.

  • But those middle-wage jobs evaporated quickly during the Great Recession and continue to dry up, per a recent McKinsey Global Institute report.
  • Fewer people are moving for work opportunities because they're discouraged by high costs, particularly housing, in job-rich cities.
  • Low-wage workers living in high-cost cities are likely to be limited to neighborhoods coping with poverty, unemployment and crime, per Brookings.

The big picture: Jobs and place are intrinsically linked. Education is often touted as the way to help people find better-paying jobs, but more training won't lead to higher-paying jobs if such jobs don't exist.

"If everyone got a bachelors degree, those low-wage jobs would not automatically become high-wage jobs."
— Martha Ross, Brookings Institution

The bottom line: There are not enough "good" jobs in enough places to help people escape low-wage work.

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