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January 22, 2004
Jobs Added Often Lower-Paying than Those Lost

In almost every state, the industries adding jobs pay less than the industries cutting jobs, according to a report by the Economic Policy Institute.

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The study found that, between November 2001 and November 2003, 32 states showed a wage gap of 25 percent or more between shrinking and expanding industries; in 16 states, that gap was 33 percent or more.

"As trends go, this is not the direction anyone would want to see our economy going," says Jeffrey Chapman, one of the analysts who examined data from the Department of Labor. "Jobs are shifting from high-paying industries to industries that pay less--and often far less."

The analysis also identifies a number of states where this shift toward lower wages in new jobs combines with declines in the number of jobs. These states, which still have fewer jobs than at the end of the recession, include:

  • New Hampshire, where growth industries pay 35 percent less than shrinking industries;
  • Delaware, with a wage gap of 43 percent;
  • Colorado, with jobs down 2 percent since the end of the recession and the wage gap at 35 percent;
  • West Virginia, with 1.7 percent fewer jobs and a 33 percent wage gap.

Other studies have predicted a wage gap between the jobs gained and those lost. In 2003, the Conference of Mayors released a report predicting the U.S. economy will recoup the more than 2.3 million jobs lost between 2001 and 2003, but the added jobs will have lower wages than the jobs lost during the economic downturn.

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