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Monday, March 18, 2024
March 18, 2024

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In Our View: Pay Gap Nags at County

Steps needed to ensure job creation bolsters the faltering middle class

The Columbian
Published:

A new analysis of the region’s economy has provided some statistical confirmation for what we already suspected: The economic recovery has not dissipated the earnings gap between high-wage jobs and low-wage jobs in Clark County.

In that regard, Southwest Washington is much like most of the country. Even as employment rolls are expanding — steadily, if unspectacularly — questions abound regarding the types of jobs that are being created and what those jobs mean for the long-range prospects of the economy. As Columbian reporter Aaron Corvin surmised in a recent article: “Strong job growth has yet to translate to fatter wallets.”

That is the conclusion drawn from work conducted by Scott Bailey, regional labor economist for the state Employment Security Department. Bailey found that, while the number of jobs is increasing, the median hourly wage in Clark County has remained stagnant. That number, adjusted for inflation, was $20.05 in 2013, meaning that half the jobs paid above that number and half paid below that rate. Cutting to the chase, good-paying jobs have increased and poor-paying jobs have increased, but the vast middle class continues to disappear.

Bailey said, “On the plus side, we’ve had an influx of new jobs that pay very well. Many of these are in traded-sector services such as corporate headquarters or finance.” Yet, as the New York Times reported in April, “The American middle class, long the most affluent in the world, has lost that distinction. While the wealthiest Americans are outpacing many of their global peers … across the lower- and middle-income tiers, citizens of other advanced countries have received considerably larger raises over the last three decades.”

This has been the subject of much debate. One can hardly bring up the topic of economics without inviting an argument about the minimum wage and trickle-down economics and income redistribution. And while these discussions typically are presented as a philosophical conundrum that strikes at the heart of capitalism, it is difficult to argue that a declining middle class is good for the nation.

A recent Harvard Business School study found that the CEOs of Fortune 500 companies make 350 times as much as their average workers, by far the highest rate among advanced economies. And an analysis last year estimated that it takes the typical worker at both McDonald’s and Starbucks more than six months to earn what the CEO makes in one hour.

Despite an ongoing debate over the minimum wage, nobody is suggesting that the typical worker at McDonald’s or Starbucks should earn as much as the CEO, even as the Harvard study concluded, “The consensus that income gaps between skilled and unskilled workers should be smaller holds in all subgroups of respondents regardless of their age, education, socioeconomic status, political affiliation and opinions on inequality and pay.” Instead, the problem lies in a lack of opportunity for those workers, even the skilled and educated ones.

Because of that, the discussion about jobs and wages and economic recovery in this country should be redirected to focus on the need for middle-class jobs. Unemployment rates are largely meaningless if only high-wage jobs and low-wage jobs are being created. Reversing the trend will require investments in education and infrastructure, as well as support for the kind of small, local businesses that can provide a burgeoning middle class. And that is as true for Clark County as it is for anywhere else in the country.

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