America needs high employment numbers to spark a robust housing recovery, but most of the positions coming back online post-recession are low-wage jobs, the National Employment Law Project said.
The advocacy group, which focuses on national employment issues, released a report saying low-wage occupations grew 2.7 times faster than jobs in the mid- to higher-wage categories from a period stretching from the first quarter of 2010 through 1Q 2012.
Lower-waged occupations are those paying anywhere from $7.69 to $13.83 per hour.
Mid-waged occupations pay roughly $13.84 to $21.11, while higher-waged positions pay anywhere from $21.14 to $54.55.
“The recovery continues to be skewed toward low-wage jobs, reinforcing the rise in inequality and America’s deficit of good jobs,” said the study’s author Annette Bernhardt. “While there’s understandably a lot of focus on getting employment back to pre-recession levels, the quality of jobs is rapidly emerging as a second front in the struggling recovery.”
The industries responsible for adding 1.7 million jobs over the past two years included food services, retail and employment professions.
Better paying jobs in manufacturing, finance, insurance and real estate failed to grow fast enough to make up for losses in the recession. Professional and technical services also realized jobs growth, but failed to maintain the pace of low-waged industries.
For the housing market, the quality of jobs percolating throughout the economy is a key factor in deciding whether there are enough potential buyers to maintain homeownership.
To break it down, a person making $10 an hour — in the lower waged category — brings in roughly $20,800 a year. A person in the mid-range — even at the low point of say $14 — makes roughly $28,000 per year.
Neither salary would put a person in the position of easily affording a home. Two low-income earners leads to an annual income of roughly $41,000.
The latest National Association of Home Builders/Wells Fargo Housing Opportunity Index noted that 73.8% of all homes sold in the second quarter were affordable to families earning the median income of $65,000.
That home affordability level is lower than in the first quarter when 77.5% of homes were considered within reach of median-income earners.
However, if a median income earner is defined by a person making at least $65,000 for homebuying purchases, a market recovery dominated by low wage positions (in the $20,000 range) is mostly bad news for housing.
kpanchuk@housingwire.com
