Job gains have now started to spread across middle and higher wage companies as the employers are gaining more confidence in the economic recovery of the nation. July was the second straight month when employment growth in higher-wage industries such as business services, construction and manufacturing has outpaced increases in low wage sectors such as fast food outlets.
Over the past two months, mid- and high-wage industries have added 257,000 jobs, while those with lower pay added 210,000, according to the research firm’s analysis of Labor Department data. The development marks a shift from last year, when many economists and worker advocates lamented that payroll advances were concentrated in low-paying sectors, such as restaurants and home health care.
Overall, employers added 209,000 jobs in July, Labor said Friday, the sixth straight month of 200,000-plus gains. More jobs in higher-wage industries would be a boon for the economy, raising average pay and bolstering consumer spending. In the past year, job increases in low-wage industries still substantially exceeded those in higher-wage sectors, but the disparity is narrowing, says UBS economist Drew Matus.
UBS defines low-wage industries as those whose average hourly pay is below the 2012 U.S. median of $18.50 an hour. Matus says low-paying jobs, such as retail cashiers and waiters, are typically the first to be added in a recovery as consumers begin shopping again. Then, as companies’ earnings rise and they expand into new markets, accountants and marketing directors are hired.