New York Times - October 1, 2000
Low-Wage Jobs Leading Gains in Employment
By STEVEN GREENHOUSE
New York City's rebounding economy has produced a record number of jobs, but a new study shows that the number of low-wage jobs, those paying less than $25,000 a year, is growing much faster than the number of middle- or high-wage jobs.
The study, to be released tomorrow, found that while the city had added thousands of high-paying Wall Street and Silicon Alley jobs in recent years, the fastest job growth had been among low-wage service employees, like restaurant workers, security guards, day care workers and home attendants for the elderly.
Since 1993, when job growth in New York City began rebounding after the national recession of 1991- 92, the number of jobs paying less than $25,000 a year has climbed 22 percent, nearly four times as much as jobs paying $25,000 to $75,000, according to the study. And the number of low-wage jobs has risen twice as much as jobs paying more than $75,000.
The study, conducted by the Working Group on the New York City Low Wage Labor Market, a team of economists from government agencies and nonprofit groups, focuses on some largely overlooked cracks in the city's economic boom. It notes, for instance, that many jobs created in the last decade do not pay enough to support a family. It also found that for the city's low-wage workers, the median wage dropped by 2 percent from 1989 to 1999, after taking inflation into account.
"Despite the strong pace of private-sector job growth," the study said, "an alarming number of families in New York City are unable to earn enough to achieve an acceptable standard of living."
Some economists for New York State criticized the study, saying it was too harsh and overlooked some gains of recent years.
The study is intended to analyze conditions and recommend ways to improve the lives of low-wage workers in New York. It says that compared with the nation as a whole and many other states, the city's job growth has been concentrated among low-wage workers, and that their earnings have risen more slowly.
Mark Levitan, the study's chief author and a senior policy analyst with the Community Service Society of New York, said several factors accounted for those trends. Over the last five years, he said, about 200,000 people in New York have left the welfare rolls and entered the labor market. And as in Los Angeles, the nation's other major gateway, he said, there has been a huge influx of unskilled immigrants seeking jobs.
"We have a lot of people coming into the labor market with not a lot of skills," Mr. Levitan said.
In decades past, many unskilled workers moved into manufacturing or government jobs, which typically pay considerably more than low-end service-sector jobs. But factory jobs have declined faster in New York than in the nation as a whole, while the number of government jobs has remained flat for a decade.
The study found that when measured from 1989, the peak of the city's last business cycle, growth in low- wage jobs had accounted for virtually all the city's increase in employment. From 1989 to 1999, the number of under-$25,000 jobs climbed by 16 percent, to 590,000, the study said.
Suggesting that the city's economy is taking on something of an hourglass shape, the study found that from 1989 to 1999, the number of jobs paying $25,000 to $50,000 declined by 4 percent, as did those paying $50,000 to $75,000. During the same time, there was a tiny increase in the number of jobs paying more than $75,000 a year, as the job boom at Wall Street's securities firms was offset in large part by cuts at commercial banks.
The study, based on data from the federal Bureau of Labor Statistics, found that of the 3.5 million jobs in the city in 1999, 590,000, or about 17 percent, paid less than $25,000 a year and that 1.8 million, or roughly 51 percent, paid $25,000 to $50,000. The study said 463,000 jobs, or 13 percent, paid $50,000 to $75,000, and 641,000, or 18 percent, paid more than $75,000.
Several New York State officials criticized the study for focusing on the decade from the 1989 business cycle peak to 1999, another high point. These officials argued that it was fairer to measure from 1993, when the local economy began to rebound.
Stephen Kagann, chief economist for Gov. George E. Pataki, said that the study painted an unjustifiably harsh picture, and that since the turnaround year of 1993, there had been across-the-board growth in the city's low-, medium- and high-wage jobs. Low-wage jobs account for 105,000 of the 311,000 jobs created in the city from 1993 to 1999, or 34 percent.
Mr. Kagann acknowledged that median wages for the city's low- wage workers might have declined over the last decade, as has been the case in much of the nation, but he said many of those workers moved to higher-paying jobs. Pointing to the unusual strength in the city's economy over the last year, he noted that the number of New Yorkers below the official poverty line fell last year and that wages for low-wage workers had begun rising, after accounting for inflation.
"New York City is having its strongest growth on record," Mr. Kagann said. "Employers are very hungry for people. What hungry employers do is they bid up wages."
Whatever year one measures from, the dishwashers, janitors and other New Yorkers who earn less than $25,000 say they can barely make ends meet.
William Cotto, a full-time security guard at an office building at Broadway and 68th Street, said his $7-an- hour pay was so meager that he worked 20 hours a week as a janitor to support his wife and four children.
"It's very hard," said Mr. Cotto, who lives in Harlem. "I barely have any money in my pocket. If I buy clothes for one kid one week, then I have to wait for the next week to buy clothes for one of my other kids."
Mr. Cotto, who has no health insurance, said he had fallen deeply into debt because of a $2,200 dentist's bill for removing a molar.
Andres Pulinario, a Dominican immigrant who works at a meatpacking plant in the Bronx, acknowledged that his $5.27-an-hour wage was far too little to support his family. To help pay the $510 rent for his Bronx apartment, he is forcing his 15-year- old daughter, Escarlin, to work 25 hours a week in a supermarket.
"Sure, I worry that it will hurt her in school, but what can you do?" said Mr. Pulinario. "Some months it's difficult trying to pay the rent on time."
Gloria Pye, a 58-year-old Bronx resident who earns $7.19 an hour providing home care for an Alzheimer's patient, is struggling to repay $3,000 in missed rent payments. She said she fell behind and was nearly evicted because of her low wages, the high costs of her prescription drugs for hypertension and diabetes, and being out of work for several months.
"I'm working 55 hours a week now," she said. "That's the only way I can make ends meet."
The study offers many recommendations intended to make it easier for low-wage workers to make ends meet, including extending health insurance to more uninsured workers and having the government do more to provide affordable day care and housing for low-wage workers. It also calls for improving job training for unskilled workers and providing bus service so workers living in the city can travel to better-paying jobs in the suburbs. The study also calls for raising the state's minimum wage to $6.75 an hour, considerably higher than the federal minimum of $5.15.
"This city is always going to have a significant low-wage service sector," Mr. Levitan said. "The question is: Is public policy going to provide these people with a way to make ends meet? We're always going to have people working in restaurants, caring for the aged, taking care of children and mopping floors. That's part of the modern urban economy. All we're saying is: Why can't these people live at a decent level? Why can't they have health insurance or decent housing?"
A little more than half of those earning less than $25,000 were born outside the United States, the study found. And more than 17 percent do not speak English well or do not speak it at all.
Two weeks ago, several nonprofit groups issued a study saying the federal poverty line, $14,150 for a household of three, did not come close to supporting a household of three in New York City. The study said a household of three in the Bronx needed $38,088 to cover a no- frills budget for housing, food, child care, health care, taxes, transportation and other basic costs.
In Queens, a basic budget for self- sufficiency would be $46,836 a year, that study said, and in the southern half of Manhattan, $74,232.
The new study on low-wage workers found a widening gap between rich and poor workers. From 1989 to 1999, average wages for workers in New York earning more than $75,000 annually jumped by 65 percent, after inflation is taken into account, while those earning under $25,000 experienced a 2.2 percent drop. For those in the least-skilled occupations, after- inflation wages fell by 14 percent.
Those earning at least $75,000 - about 18 percent of the city's work force - had 85 percent of the total increase in wages and salaries from 1989 to 1999.
"Clearly in this type of economy, skills are rewarded," said the chief economist for the Port Authority of New York and New Jersey, Eugene Spruck. "Those with the highest skills get the highest rewards. And the unskilled find that their real incomes are declining."
Calling the low-wage study too harsh, Mr. Spruck pointed out that employment in the New York region rose faster than in the nation last year and was at record levels.