Clark County wage gap has grown since 2002

Clark County’s economy continues to show some signs of progress, as employers expand payrolls and the jobless rate heads downward.

But strong job growth has yet to translate to fatter wallets, according to a new analysis by Scott Bailey, regional labor economist for the state Employment Security Department.

The median hourly wage for jobs in Clark County ($20.05 in 2013, adjusted for inflation) has remained flat even as the economy has recovered lost jobs and added more after the end of the Great Recession. Meanwhile, the make-up of jobs in the county significantly shifted from 2007 to 2013, with more than 700 middle-income positions vanishing and with more than 1,000 lower-income jobs going away. (Clark County has seen strong recovery in employment since mid-2013, after experiencing major job losses in the economic crash.)

As part of that shift, the county saw a net increase of more than 1,100 jobs paying $26 or more per hour. The influx of high-wage jobs is a positive development. However, there aren’t enough of those jobs to significantly boost the county-wide median hourly wage, Bailey said. And the addition of those jobs doesn’t necessarily mean existing workers improved their lives by catapulting themselves into a higher income bracket. That’s because many of the new high-wage jobs belong to corporate managers who relocated to Clark County when PeaceHealth moved its headquarters to Vancouver and as Fisher Investments has expanded its campus in Camas.

“On the plus side, we’ve had an influx of new jobs that pay very well,” Bailey said in an email to The Columbian. “Many of these are in traded-sector services such as corporate headquarters or finance. When they spend their income locally, there is a multiplier effect that helps create jobs in retail and consumer services.” The downside: The people who held the middle-wage and lower-wage jobs that were lost, “many of whom worked in construction or manufacturing,” according to Bailey, “are generally not the ones being hired for the higher-wage jobs.”

Still, that’s hardly the only issue in play. Clark County’s flatlining median hourly wage (half of all jobs in the county paid more; half paid less) is part of a decadelong trend, according to Bailey. After rising steadily in the 1990s, Bailey wrote in his analysis, the median has increased by about 1 percent since 2002.

It’s a pattern that is playing out nationally.

Behind that decadelong trend, experts say, are factors shaped by broader government policies and market forces. Those factors include: loss of bargaining power over pay because of the decline in private-sector unions; increased automation of routine jobs, which has reduced the need for labor; and the off-shoring of U.S. manufacturing jobs. “The jobs in apparel, furniture, shoes, and other wage-sensitive products that the United States has lost to China are unlikely to return,” according to one study, “The Rise of China and the Future of U.S. Manufacturing,” co-authored by five economists in September. One of the authors of that study, David Autor, a professor of economics at the Massachusetts Institute of Technology, has also called attention to a diverging U.S. economy in which demand for highly educated workers grows as the demand for middle-skill positions slumps. As a result, Autor wrote in another analysis, “The Polarization of Job Opportunities in the U.S. Labor Market,” workers who don’t obtain an education beyond high school “face a contracting set of opportunities.”

‘Wage disparity’

In Clark County, the increase in high-wage jobs, and the decrease in middle- and lower-income positions, echo the bifurcating economy described by Autor.

During the recovery, “higher-wage jobs came roaring back” in the county, according to Bailey’s analysis, conducted on a full-time equivalent basis (two half-time jobs equals one full-time equivalent). From 2007 to 2013, the county experienced a net gain of 1,113 jobs paying $26 or more per hour. That was despite losing 600 construction jobs and 300 manufacturing positions in this high-wage range.

During that same period, the county experienced a net loss of 743 middle-wage jobs (positions paying $16 to $25.99 per hour), with big losses in construction and manufacturing. The number of lower-wage jobs (positions paying no more than $16 per hour) “fell the most steeply in the downturn,” according to Bailey, although it also grew “the most quickly in the recovery.” The upshot: The county saw a net loss of 1,028 lower-wage jobs during the six-year period. That net loss was felt most heavily, Bailey wrote, in retail trade and construction.

Meanwhile, the county’s flat median hourly wage isn’t the only indication that the economic recovery isn’t being broadly felt in people’s wallets. A comparison of changes in the county’s average hourly wage, as opposed to its median hourly range, tells another part of the story.

The average hourly wage is typically higher than the median because a small number of high earners can push up the average figure. The county’s average hourly wage ($26.21 in 2013, adjusted for inflation) increased by 28 percent from 1990 to 2002, Bailey’s analysis shows, and then by 5 percent from 2002 to 2013. The faster growth of the average versus the median hourly wage indicates “wage disparity has increased,” Bailey wrote.

Even demographics aren’t having their expected upward pressure on the median hourly wage. “Most workers enjoy higher wages as they grow older, due to becoming more skilled and sometimes better educated,” according to Bailey. “With the aging of the baby-boomers, the workforce has shifted towards a greater proportion of workers in their prime earning years. One would expect the median wage to increase purely due to these demographic trends.”

Autor, the MIT economist, says improving K-12 education to prepare more people for higher education is one possible strategy for boosting incomes. Another is to offer continual learning and retraining programs for all workers. Yet another: investing in research-and-development and infrastructure projects “that will have broadly distributed benefits across the economy.” He adds, “The return of the classic manufacturing job as a path to a middle-class life is unlikely. But it may be that various service jobs grow into attractive job opportunities, with the appropriate complementary investments in training, technology, and physical capital.

“Perhaps these could be the shadows of what is yet to come.”