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US suffers widest gap in employment rates in a decade
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The gap in employment rates between America’s highest- and lowest-income families has stretched to its widest levels since officials began tracking the data a decade ago, according to an analysis of government data conducted for The Associated Press.
Rates of unemployment for the lowest-income families — those earning under US$20,000 — have topped 21 percent, nearly matching the rate for all workers during the 1930s’ Great Depression.
US households with income of above US$150,000 a year have a jobless rate of 3.2 percent, a level traditionally defined as full employment. At the same time, middle-income workers are pushed into lower-wage jobs. Many of them in turn are displacing lower-skilled, low-income workers, who become unemployed or are forced to work fewer hours, the analysis shows.
“This was no ‘equal opportunity’ recession or an ‘equal opportunity’ recovery,” said Andrew Sum, director of the Center for Labor Market Studies at Northeastern University. “One part of America is in depression, while another part is in full employment.”
The findings follow the government’s tepid jobs report this month that showed a steep decline in the share of Americans working or looking for work. On Monday, US President Barack Obama stressed the need to address widening inequality after decades of a “winner-take-all economy, where a few do better and better and better, while everybody else just treads water or loses ground.”
“We have to make the investments necessary to attract good jobs that pay good wages and offer high standards of living,” he said.
While the link between income and joblessness may seem apparent, the data are the first to establish how this factor has contributed to the erosion of the middle class, a traditional strength of the US economy.
Based on employment-to-population ratios, which are seen as a reliable gauge of the labor market, the employment disparity between rich and poor households remains at the highest levels in more than a decade, the period for which comparable data are available.
In the first seven months of 2013, the employment rate was 73.5 percent for households with income above US$150,000 a year, against 33.8 percent for households making below US$20,000 — a gap of 39.7 percentage points, similar to the ratio in the most recent years after the recession. In contrast, the employment gap was 36.4 percentage points in 2005, at the height of the housing bubble.
“It’s pretty frustrating,” says Annette Guerra, 33, of San Antonio, who has been looking for a full-time job since she finished nursing school more than a year ago. She found that employers had become increasingly picky about an applicant’s qualifications in the tight job market.
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