Low-Wage Workers Feel Worse Off Now Than During Recession: Survey

WASHINGTON -- America's lower-income workers have posted the biggest job gains since the deep 2007-09 recession ? but few are bragging.

As a workforce sector, those earning $35,000 or less annually are generally pessimistic about their finances and career prospects. Many see themselves as worse off now than during the recession, a two-part Associated Press-NORC Center for Public Affairs Research survey of workers and employers shows.

The survey revealed that many people at the lowest rung in the workplace view their jobs as a dead end. Half were "not too" or "not at all" confident that their jobs would help them achieve long-term career goals. And only 41 percent of workers at the same place for more than a decade reported ever receiving a promotion.

Yet 44 percent of employers surveyed said it's hard to recruit people with appropriate skills or experiences to do lower-wage jobs, particularly in manufacturing (54 percent). While 88 percent of employers said they were investing in training and education for employee advancement, awareness and use of such programs among the lower-wage workers was only modest.

Although President Barack Obama made it a national goal to "equip our citizens with the skills and training" to compete for good jobs, the survey shows a U.S. workforce that has grown increasingly polarized, with workers and their bosses seeing many things differently.

Seventy-two percent of employers at big companies and 58 percent at small ones say there is a "great deal" or "some" opportunity for worker advancement. But, asked the same question, 67 percent of all low-wage workers said they saw "a little" or "no opportunity" at their jobs for advancement.

Through last month, the economy had recovered only about 5.7 million of the 8.7 million jobs shed in the deepest downturn since the Great Depression. Low-wage jobs are usually the first to come back following a recession. While the outlook clearly is improving, economic growth remains anemic and unemployment is a still-high 7.7 percent.

Ronald Moore, 48, of Lebanon, Ind., is among those who have seen their situation improve. He started his own home-inspection company three years ago after he couldn't find enough work as a truck driver. But "nobody was buying homes, so no one needed an inspection," he said. "It was pretty rough in the beginning." Now he operates a custom cabinet business, where business is starting to improve. Slowly.

To gauge the experiences and perspectives of lower-wage workers, the AP-NORC Center conducted two separate surveys. A sample of 1,606 workers earning $35,000 or less annually was surveyed last summer, while a companion poll of 1,487 employers of such workers was conducted from November through January.

Roughly 65 percent of the jobs the U.S. economy added since the recession officially ended in June 2009 have been lower-wage ones.

Despite those numerical gains, "lower-income households have been hit very hard and have not benefited as much from the recovery," said Mark Zandi, chief economist at Moody's Analytics. "Their real wages are going nowhere. And this is a group that has more debt, fewer assets, is less likely to own a home or stocks and with little capacity to absorb higher gasoline prices."

Economists also say low-wage workers were hit particularly hard by an increase in Social Security payroll taxes resulting from "fiscal cliff" negotiations late last year between Obama and Congress.

A degree of economic "self-righting" will happen as more middle-income and higher-income jobs come back and economic growth accelerates, said Robert Trumble, director of the Labor Studies Center at Virginia Commonwealth University. "But the situation we've been facing for the last half-dozen years or so has been tough. And the lower your income, the tougher it is."

"Some things are better. But there are still some things that are still hard," said Sarah Mueller, 33, of Palm Harbor, Fla., who found work as a Montessori teacher two years ago after working as a part-time and substitute teacher. "With student loans, people are still struggling ? I'm one of those people ? to pay back student loans that are astronomical," she said.

Seventy-four percent of lower-wage workers say it is "difficult" or "very difficult" for them and their families to get ahead financially. Half thought their financial situation was somewhat or much worse than in 2008.

Many worry a lot or some (71 percent) about being unable to pay their bills, unexpected medical expenses (70 percent), losing their job (54 percent) or keeping up with their mortgage or rent (53 percent).

Many reported stagnant (44 percent) or declining (20 percent) wages over the past five years.

Employers and workers tend to agree that employees themselves hold the bulk of the responsibility for helping workers to get ahead in their careers, but employers are more apt to place some of that responsibility on high schools and colleges.

Despite their many frustrations, 74 percent of low-income workers said they were very or somewhat satisfied with their jobs. Yet 90 percent of all workers said they were satisfied with their job, according to an AP-GfK poll conducted in September.

The surge in low-wage jobs seems to have escaped notice by employers, the survey suggests. Just 22 percent of them said their organization's lower-wage workforce grew over the last four years and only 34 percent expect it to increase in the coming four years.

Lower-wage workers are also pessimistic about the overall direction of the country, with 7 in 10 saying "wrong direction," above the 60 percent of all adults who said so in AP-GfK polling conducted at the same time.

"Lower-wage jobs are coming back first," said labor economist Heidi Shierholz of the Economic Policy Institute, a labor-leaning think tank. "But it's all bleak and it's all due to lack of demand for work to be done. We're still not getting more than just what we need to hang on," Shierholz said. "These last few months have looked better, but we cannot yet claim robust recovery by any stretch."

Lena Hughes, 31, of Indianapolis, a certified hospital nursing assistant, would agree.

"Everybody is struggling financially. It's hard to get jobs still," she said. "I don't think it's getting any better."

The surveys were sponsored by the Joyce Foundation, the Hitachi Foundation and NORC at the University of Chicago. The Joyce Foundation works to improve workforce development and education systems to assist job seekers who may lack skills or credentials. The Hitachi Foundation aims to expand business practices that improve economic opportunities for less well-off workers while benefiting business.

The worker survey was conducted online using the GfK KnowledgePanel and by telephone by interviewers from NORC from Aug. 1 through Sept. 6, 2012. The employer survey was conducted online and by phone by NORC from Nov. 12, 2012, through Jan. 31, 2013. The margin of sampling error for the survey of workers was plus or minus 2.9 percentage points; for employers, it was 4.5 points.

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Associated Press News Survey Specialist Dennis Junius and writer Stacey A. Anderson contributed to this report.

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