Mayors’ report sees more jobs, less pay
An economic report recently released by the Washington, D.C.-based U.S. Conference of Mayors (USCM) gives local government officials cause for both optimism and concern. On one hand, the study forecasts that the U.S. economy is finally set to begin adding new jobs. However, those jobs will pay, on average, almost 18 percent less than the ones lost during the recent recession, the report predicts.
Detroit Mayor Kwame Kilpatrick, chair of USCM’s Council for Investment in the New American City, says the trend of lower-paying jobs threatens the strength of the American middle class and, by extension, the vitality of cities across the nation. He is calling for extensive dialogue between cities, the federal government and the private sector to find ways to create jobs with higher wages in metropolitan areas. “If cities are not doing well, then the country doesn’t do well,” he says. “It’s not the 50 states that drive the American economy, it’s the 319 metros.”
The report, conducted by Waltham, Mass.-based Global Insight, says that job growth will begin at a modest pace in the latter part of 2003 and pick up steam next year. By the end of 2004, the roughly 2.4 million net jobs that were lost from the start of 2001 to the end of second-quarter 2003 will have been recovered. In 2005, another 2 million net jobs will be added, the study estimates. However, the average annual wage of new jobs created during the next two years is projected to be $35,855. That is a sizeable decline from the average annual wage of $43,629 of the jobs lost from 2001 to 2003.
Much of the pay discrepancy can be explained by the troubles in the manufacturing sector. Durable manufacturing lost the most net jobs of any sector from first-quarter 2001 to the end of second-quarter 2003, and non-durable manufacturing suffered the second most; the average annual salaries of jobs lost in the sectors were about $43,000 and $40,600, respectively. Unfortunately, “many of these jobs are not expected to return during the recovery,” the report says. “The non-durable sector is expected to continue to lose jobs throughout the forecast period while expected job gains in durable manufacturing will be minimal.”
The sectors that will be generating the most net jobs through the end of 2005 will not pay as much as the manufacturing categories, according to the report. The leading job-generating sectors will be — in order — administration and support, health care and social assistance, and accommodations and food; the average annual salaries of jobs produced in those sectors will be approximately $26,200, $37,400 and $14,745, respectively.
Kilpatrick says that rebuilding the nation’s infrastructure would be an effective way to create more high-paying jobs. The Reston, Va.-based American Society of Civil Engineers released a report earlier this year that said the nation’s infrastructure is in poor shape and in need of a $1.3 trillion investment to bring it up to par.
“With a significant investment in infrastructure, particularly in urban areas around this country, you can bring back a lot of those higher-wage jobs, those construction jobs, architectural jobs, technology jobs,” Kilpatrick says, adding that he is optimistic about the future creation of higher-paying positions. “It’s an opportunity for us to plan,” he says. “There are a lot of things we can do, but it takes some serious dialogue and some serious engagement on the part of the public and private sectors.”