The Non-Working Jobs Market

Jun 16, 2017

by David Levine, President/CEO

In her article for the Financial Times this week, Sarah O’Connor shed light on the odd performance of the US labor market.  While employment is increasing — and this year more people in the developed world have jobs than before the financial crash in 2007 — it is also true that too many employed people are earning too little in the way of income.  

This intersection of low-income rates and high employment rates is striking and goes against conventional wisdom. According to Organization for Economic Cooperation and Development (OECD) data, low incomes are defined by the share of working-age people living on less than 50 percent of the median income.  For the US, while it has a national unemployment rate below 5 percent (3.1 percent in Fairfax County), its average low-income rate for working households is at almost 12 percent.

To put that in perspective against other developed countries, O’Connor notes that the US has “Finnish levels of employment but Greek levels of low income.”  In Fairfax County, 45 percent of all jobs pay less than $50,000 per year.  That equates to about 300,000 jobs in the retail, construction, healthcare and education sectors within the County.

Put differently, these jobs are not lifting households out of relative poverty. Too many working households just cannot sustain themselves on their low incomes. They struggle with expenses, including expenses for their housing, transportation, childcare and even food.  

We see their struggles every day here at GSH.  We do what we can to help them.