Georgia’s Middle Class Workers Left Out of Recovery

wes blogIndustries in Georgia that pay a middle-class wage fell furthest during the Great Recession but are faring the worst during the economic recovery. Georgia’s mid-wage industries comprised 52 percent of private sector job losses during the recession, but only 15 percent of gains during the recovery. Cuts to state and local budgets worsen the problem by adding public sector job losses on top of the mid-wage shortfall in the private sector.

Those are the key findings of a new report from the Georgia Budget and Policy Institute, “Bad Times for Good Jobs: Georgia’s Shrinking Middle Class Opportunity.”

The new research documents how Georgia’s improving employment picture in recent years is leaving behind industries critical to the state’s middle class. It divides state-level data for 97 industries into three wage categories, low-, mid- and high-wage, based on how much each industry pays an average worker. The report compares employment trends in those categories during the Great Recession from 2007 to 2010 to the economic recovery from 2010 to 2013. The analysis reveals:

  • The recession hit workers in mid-wage industries hardest and they are faring the worst in the recovery. Georgia’s mid-wage industries accounted for 52 percent of private sector job losses during the recession, but only 15 percent of gains during the recovery. Georgia’s private sector held about 138,100 fewer jobs in mid-wage industries in 2013 than in 2007 before the recession began.
  • Low- and high-wage industries account for most of Georgia’s job growth in the recovery. Low- and high-wage industries in Georgia have recovered the jobs they lost during the recession, unlike mid-wage industries. Low- and high-wage industries account for a combined 85 percent of Georgia’s net job growth from 2010 to 2013, split about evenly between the two.
  • State and local government budget cuts caused additional job losses in the public sector. Government professions, such as teachers and police officers, are a historical source of middle-class jobs with decent wages. But Georgia’s state and local governments employed 35,700 fewer workers in 2013 than they did in 2007. About 54 percent, or 19,400, of these lost jobs are due to layoffs among education workers employed by local governments.

Lawmakers could confront these trends through three strategies. One, they can make sure that Georgia’s workforce is as well-educated and trained as possible. More skills mean more ability for workers to grab jobs in the few higher-wage fields that are growing in Georgia, such as health care, computer programming and business services. A well-trained workforce is also a proven way for states to attract additional good-paying employers to relocate or invest.

Two, lawmakers could explore ways to better target Georgia’s business subsidy programs toward employers that pay at least a middle-class wage. Georgia spends hundreds of millions each year on various tax credits, state contracts and grants to businesses. Some of these are available to low-wage employers.

Lastly, lawmakers should look at giving those Georgians stuck in low-wage jobs a raise. Options include raising Georgia’s minimum wage and passing a state-level Earned Income Tax Credit, which is a highly effective wage subsidy only available to families who work.

Our country offers the promise that hard work and determination will be rewarded with the opportunity of economic success. But workers and their families cannot thrive if the economy fails to provide sufficient chances to make a living. For Georgians in poverty, an economy without mid-wage job opportunities means fewer ladders into the middle class. And for those already considered in the middle, it means a greater likelihood of one day sliding backwards.

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