Jobs created in the U.S. since the 2008 Great Recession and financial crisis pay on average 23 percent less in earnings, compared to the jobs which were lost, according to a new report.
The average annual salary in biggest sectors where jobs were lost – mainly manufacturing and construction — during the 2008-2009 crisis was $61,637, according to the report by the United States Conference of Mayors (USCM), which represents cities with populations of more than 30,000.
Job gains through the second quarter of 2014 in comparable sectors showed average wages of $47,171, indicating $93 billion in lower wage income, the report said.
Under a similar analysis conducted by the Conference of Mayors during the 2001-2002 recession, the wage gap was only 12 percent compared to the current 23 percent.
The means the wage gap has nearly doubled from one recession to the next, according to the new report
“While the economy is picking up steam, income inequality and wage gaps are an alarming trend that must be addressed,” said U.S. Conference of Mayors President Sacramento Mayor Kevin Johnson.
The report focuses on income inequality, suggesting that middle-income households will continue to fall behind as higher income levels grab a greater share of income gains.
In 2014, median household income is projected to increase by 2.5 percent in nominal dollars, and then by 3.8 percent per year from 2015 through 2017. But average (mean) income is expected to rise faster, 2.7 percent in 2014 and by 4.1 percent through 2017.
Faster growth in mean income, compared to median income, demonstrates growing income inequality, the report states.
“Unless policies are developed to mitigate these trends, income inequality will only grow larger in the future,” according to Jim Diffley, director of US Regional Economics at IHS and author of the report.