The nation has recaptured jobs lost during the downturn and unemployment has moved steadily lower — but the gap between rich and poor continues to widen.
That’s because job gains during the recovery have come largely in sectors that pay less than fields in which jobs were lost, contributing to $93 billion less in pay, according to a study released Monday by the United States Conference of Mayors.
Between 2008 and 2009, the U.S. economy lost 8.7 million jobs, with manufacturing and construction disproportionately hit. The average wage in the sectors in which jobs were lost was $61,637, according to the study, prepared by Jim Diffley, an economist with IHS Global Services in Philadelphia.
As the economy recovered, it added more jobs in lower-paying areas, including hospitality, health care and social assistance and administration. The wages in those sectors is only $47,171 per year.
That 23 percent wage gap is nearly double that experienced coming out of the 2001 recession and is a driver in the growing income rift between households in many parts of the country.
“Reports sound so cheery and give the impression that things are back to normal,” said Aurora resident Carol Murphy. “But I don’t know what my new normal is.”
Murphy, 58, was a project coordinator at advertising firm BBDO making $50,000 a year. She survived wave after wave of layoffs and salary freezes until BBDO lost its Chrysler account and the ax fell on her in 2012.
Despite an intense job search, she hasn’t found anything comparable in pay and now makes $10 an hour part-time doing office work for a gun shop. Her income is now about $10,000 a year.
In 261 out of the 357 metro areas studied, households making less than $35,000 a year outnumbered those making $75,000 or more a year, and the mayor’s conference has made rising income inequality a top focus.
Colorado, for the most part, is doing better than the national averages. The top income tier, households making $75,000 or more, outnumber those making $35,000 or less in every metro area except for Pueblo and Grand Junction.
Another way to measure the growing income gap is by comparing the average rate of change against the median or middle point. When the average grows faster than the median, wealth is concentrating at the top.
From 2005 to 2012, the average income in the U.S. rose 14 percent, from $62,556 to $71,317. Median incomes rose 11.1 percent, from $46,242 to $51,371.
In Greeley, that concentration towards the top happened at a much faster pace. Average income rose 22.5 percent over the period studied, while the median income rose 13.5 percent.
In Colorado Springs, the average rose 14.6 percent and the median 8.2 percent, while in metro Denver, average incomes rose 15.4 percent and the median 11.9 percent, closer to the national trend.
Boulder and Pueblo were the two metros where the median outpaced the mean, indicating a tide that is lifting all boats, although different ends of the income spectrum dominate in each city.
“All things being equal, more equality is better,” Diffley said. “All things are not equal.”
Some of the widest income gaps are in parts of the country that are considered prosperous, such as Washington, D.C.; San Jose, Calif.; and Bridgeport, Conn.
And other seemingly prosperous areas hide deeply entrenched pockets of poverty.
“There is a disconnect between low unemployment and an average family being able to afford to live in Santa Fe,” said Javier Gonzales, mayor of the New Mexico capital city.
In Santa Fe, the unemployment rate this spring dipped below 5 percent, much better than the statewide average of 6.5 percent.
The city, home to highly-paid scientists and creative types, also has neighborhoods where household incomes average below $13,000 a year and most children never graduate high school, Gonzales said.
Aldo Svaldi: 303-954-1410, asvaldi@denverpost.com or twitter.com/aldosvaldi
