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Economic recovery drives growth in low-paid jobs

Mitchell Hartman Nov 11, 2014
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Economic recovery drives growth in low-paid jobs

Mitchell Hartman Nov 11, 2014
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The October 2014 employment report from the Bureau of Labor Statistics showed the U.S. economy is continuing to deliver steady job growth and lower unemployment, even as consumer demand and business activity remain lackluster compared to previous recoveries.

And signs increasingly point to a solid finish to the year. Outplacement firm Challenger, Gray & Christmas reports that retailers and shippers—including both brick-and-mortar and online operations—added 180,600 jobs in October, more than any previous October on record. That’s an increase of 13 percent from 2013.

Employment in the transportation sector has been going up all year in tandem with the recovery of consumer spending.

“We’re seeing a huge demand for truck drivers,” said Michael Gritton of Kentuckiana Works, the regional workforce development agency in Louisville, Kentucky, which has become a logistics hub for the Midwest.

Nationwide, the U.S. economy has added more than 35,000 truck drivers since October 2013, according to data from the Bureau of Labor Statistics.

Gritton points out that the cost of commercial-driver training is high—as much as $5,000—and it’s not easy to find government funding or student loans to cover the cost. But a typical course only takes four to six weeks. Starting pay is typically in the $15/hour range (though it can rise to nearly double that with experience).

Other service sectors in which jobs are now consistently growing are also low-pay, explains economist Paul Edelstein at IHS.

“We’re seeing a big shift towards the leisure and hospitality sector, restaurants and bars, where the wages aren’t very good,” said Edelstein. Employment in leisure and hospitality has increased by 380,000 in the past year.

Daycare is another low-paid occupation that is now adding jobs consistently (nearly 19,000 since October 2013), driven by the overall expansion of the economy. As more parents become two-income households again, they need to pay someone else to watch the kids.

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