Low-Wage Additions Not Enough to Push Economy Forward
There has been a lot of hype about the number of private-sector jobs (over 250,000 jobs) added in the month of February. While the number of jobs added is impressive, it is important to analyze the types of jobs added to understand what it really means for our economy.
To help put things in perspective, Dent Research conducted an analysis that found the majority of newly created jobs are low-paying.
According to the analysis, 27% of the newly added private jobs “fell to industries that pay below an average hourly wage of $15.83. These jobs are typically in restaurants, gas stations, grocery and general merchandise stores.”
It’s nice to see the economy producing more jobs, but it’s important to understand that these low-level service jobs will not pay workers enough to increase their spending (which would help move the economy upward).
Rodney Johnson, index creator and Dent Research co-founder, comments: “The promising wage hike in January faded with the February report. The Fed wants consumers to go out, spend money and take on new debt. Consumers will resist major purchases when wage growth stalls.”
For a detailed explanation of The Dent Research Employment Index’s methodology, click here.