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California’s low-wage workers now earn less than in 1979: Study

In the last 35 years, California’s high-wage workers have seen steady pay rise but their counterparts receiving low wages, about 4.8 million or one-third of the state’s workforce, earned less in inflation-adjusted dollars in 2014 than they did in 1979, said a study by UC Berkeley.

Between 1979 and 2013, the productivity of California workers increased by 89 percent, but median hourly compensation (wages plus benefits), adjusted for inflation, increased only 3 percent.
Between 1979 and 2013, the productivity of California workers increased by 89 percent, but median hourly compensation (wages plus benefits), adjusted for inflation, increased only 3 percent.

Based on U.S. Census Bureau data, UC researchers found that low-wage workers, defined as those earning hourly wages of $13.63 or less, have seen steady declines in their inflation-adjusted buying power.

This low-wage workforce, nearly three-quarters nonwhite and concentrated in two industries — retail trade, and restaurants and other food services — has also become older and more highly educated.

Teens made up 5 percent of low-wage workers in 2014, down from 16 percent in 1979, and 48 percent of low-wage earners in 2014 had attended some college, compared to 39 percent in 1979. The analysis also showed that 40 percent of the state’s low-wage workers in 2014 were foreign-born.

“We found that low-wage workers in California are older and more educated than they were 30 years ago, and yet they’ve seen stagnant and even declining wages,” said Annette Bernhardt, a visiting UC Berkeley professor. “The story of growing inequality is not just about the top 1 percent, it is also about the millions of low-wage workers and their families who struggle with economic insecurity every day.”

In 2013, the median income of low-wage workers’ families was $29,100, compared to $63,000 for all California families, a gap that has widened since 2000.

From 2007 to 2011, families of low-wage workers received $14.3 billion in annual support from public-assistance programs such as the Earned Income Tax Credit, Medicaid and food stamps. The study also found that the top occupations of California’s low-wage workers are retail sales workers; cooks and food preparation workers; material-moving workers; and personal care and childcare workers. About half of them are in Southern California.

The researchers published their analysis in chart form in Low-Wage Work in California: 2014 Chartbook.

 

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