Lower-Paying Jobs Grew at a Faster Rate than Higher-Paying Jobs in the Eighth District

Thursday, August 20, 2015
low paying industries

A study done earlier this year found that jobs in higher-paying industries were being added at a faster rate nationally than jobs in lower-paying industries. However, an article in the latest issue of The Regional Economist shows that the opposite has been true for jobs in the Eighth Federal Reserve District.1

National Perspective

In the earlier study, Business Economist and Research Officer Kevin Kliesen and Senior Research Associate Lowell Ricketts categorized industries as higher or lower paying via the median real wage of all private-sector industries in 2007. If the average real wage for a particular industry was higher than the overall median wage, the industry was considered higher paying. If below, then it was lower paying.

During the 5.5 years following the trough of the Great Recession, higher-paying industries added jobs at a rate of 9.9 percent. Lower-paying industries saw job growth of 8.9 percent.2

Around the Eighth District

In the more recent study, Economist Maximiliano Dvorkin and Research Associate Hannah Shell used county data from the Census Bureau’s Quarterly Workforce Indicators. They sorted industries into higher-paying or lower-paying categories based on whether the average monthly earnings of an Eighth District worker in that industry were above or below the median earnings across all industries in the District. Their analysis covered the period 2010-2013.

They found that lower-paying industries saw more rapid job growth in the District than higher-paying industries. Lower-paying industries grew 3.65 percent during this period. Higher-paying industries grew 2.15 percent.

Dvorkin and Shell concluded: “The discrepancy in growth rates in the District is different from the discrepancy in the nation, where Kliesen and Ricketts found that jobs in high-paying industries are growing at a faster rate than jobs in low-paying industries.”

Notes and References

1 The Eighth District consists of all of Arkansas and parts of Illinois, Indiana, Kentucky, Mississippi, Missouri and Tennessee.

2 It should be noted that the total number of jobs in lower-paying industries exceeded those in higher-paying industries by nearly 70 percent. Thus, while jobs in higher-paying industries grew faster than in lower-paying industries, 61 percent of the total number of jobs added were in lower-paying industries.

Additional Resources

Posted In Labor  |  Tagged maximiliano dvorkinhannah shelljob growthlower paying industrieshigher paying industries
Commenting Policy: We encourage comments and discussions on our posts, even those that disagree with conclusions, if they are done in a respectful and courteous manner. All comments posted to our blog go through a moderator, so they won't appear immediately after being submitted. We reserve the right to remove or not publish inappropriate comments. This includes, but is not limited to, comments that are:
  • Vulgar, obscene, profane or otherwise disrespectful or discourteous
  • For commercial use, including spam
  • Threatening, harassing or constituting personal attacks
  • Violating copyright or otherwise infringing on third-party rights
  • Off-topic or significantly political
The St. Louis Fed will only respond to comments if we are clarifying a point. Comments are limited to 1,500 characters, so please edit your thinking before posting. While you will retain all of your ownership rights in any comment you submit, posting comments means you grant the St. Louis Fed the royalty-free right, in perpetuity, to use, reproduce, distribute, alter and/or display them, and the St. Louis Fed will be free to use any ideas, concepts, artwork, inventions, developments, suggestions or techniques embodied in your comments for any purpose whatsoever, with or without attribution, and without compensation to you. You will also waive all moral rights you may have in any comment you submit.
comments powered by Disqus

The St. Louis Fed uses Disqus software for the comment functionality on this blog. You can read the Disqus privacy policy. Disqus uses cookies and third party cookies. To learn more about these cookies and how to disable them, please see this article.

Subscribe to
On the Economy

Get notified when new content is available on our On the Economy blog.

Email Alerts  |  RSS

About the Blog

The St. Louis Fed On the Economy blog features relevant commentary, analysis, research and data from our economists and other St. Louis Fed experts.

Views expressed are not necessarily those of the Federal Reserve Bank of St. Louis or of the Federal Reserve System.

Contact Us

For media-related questions, email mediainquiries@stls.frb.org. For all other blog-related questions or comments, email on-the-economy@stls.frb.org.