1 in 4 Jobs in the US Are Low-Paying

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A new report finds that America has a higher percentage of low-paying jobs than other developed countries.

It’s not always good to be No. 1. The United States has the dubious distinction of having a higher percentage of low-paying jobs than any other country in the Organisation for Economic Co-operation and Development, which includes 34 developed countries.

That’s according to a research note by economists Ellen Zentner and Paula Campbell of Morgan Stanley, citing information from the 2014 OECD Employment Outlook report, which tracks employment and labor trends in each member country.

According to The Huffington Post, the OECD defines low-paying as a job that earns less than two-thirds of a country’s median income. More than 25 percent of jobs in the U.S. qualify as low-paying, compared with an average of 16 percent in OECD countries, HuffPo said.

The median annual income in the U.S. was $35,080 in 2013, Business Insider said. Using the OECD definition, a low-paying job would earn less than $23,390.

According to HuffPo:

The ranking reflects America’s problem with income equality. Even though the U.S. has one of the highest household median incomes in the world (about $44,000 compared to roughly $10,000 worldwide), there’s a wide gulf between those making much more than the median income and those making much less.

Zentner and Campbell said manufacturing jobs used to drive job creation numbers in America. Now, most new jobs created are lower-paying positions. So the U.S. will most likely remain in the top spot when it comes to providing low-paying jobs.

“Since the labor market recovery began in early 2010, we estimate that roughly 65 percent of net new jobs created have been concentrated in low-wage-paying industries,” the Morgan Stanley research note said.

HuffPo said the Morgan Stanley economists blame income inequality for stifling U.S. economic growth.

Low-income Americans aren’t able to spend enough to boost the greater economy. Wages will need to rise so that households can buy more things.

“Stronger growth in wages and salaries is essential,” wrote Zentner and Campbell. “It would help households spend more broadly across the income spectrum.”

Are you surprised that 1 in 4 jobs in the U.S. are considered low-paying? Share your comments below or on our Facebook page.

Stacy Johnson

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