WASHINGTON – The gap in employment rates between the highest- and lowest-income families in America has stretched to its widest levels since officials began tracking the data a decade ago, according to an analysis of government data conducted for The Associated Press.
Rates of unemployment for the lowest-income families — those earning less than $20,000 — have topped 21 percent, nearly matching the rate for all workers during the 1930s’ Great Depression.
U.S. households with income of more than $150,000 a year have an unemployment rate of 3.2 percent, a level traditionally defined as full employment.
At the same time, middle-income workers are increasingly pushed into lower-wage jobs. Many of them in turn are displacing lower-skilled, low-income workers, who become unemployed or are forced to work fewer hours, the analysis shows.
“This was no ‘equal opportunity’ recession or an ‘equal opportunity’ recovery,” said Andrew Sum, director of the Center for Labor Market Studies at Northeastern University. “One part of America is in depression, while another part is in full employment.”
The findings follow the government’s tepid jobs report this month that showed a steep decline in the share of Americans working or looking for work. On Monday, President Barack Obama stressed the need to address widening inequality after decades of a “winner-take-all economy.”
The data are the first to establish how the link between income and joblessness has contributed to the erosion of the middle class, a traditional strength of the U.S. economy.
Last year the average length of unemployment for U.S. workers reached 39.5 weeks, the highest level since World War II. The duration of unemployment has since edged lower to 36.5 weeks.
Economists call this a “bumping down” or “crowding out” in the labor market, a domino effect that pushes out lower-income workers, pushes median income downward and contributes to income inequality. Because many medium-skilled jobs are being lost to globalization and automation, recent U.S. growth in low-wage jobs has not come fast enough to absorb displaced workers at the bottom.
Low-wage workers are now older and better educated than ever, with especially large jumps in those with at least some college-level training.
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