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Business and Labor

WNY Economy Adding Wrong Jobs, Keeping Average Wage Low

Wrong Track Employment in WNY

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(WNY) As the region slowly recovers from the recession, one thing to notice is that the private sector is adding jobs to the service-providing industries as opposed to the goods-producing. The first chart shows that since a peak in annual employment during 2008 (because of the recession), both areas of the private economy initially shed thousands of jobs into 2009. Whereas the service-providing industries reclaimed 2008 levels of employment as early as 2011, the goods-producing industries have yet to claw back to par.

Job growth centered in the service-providing industries is troublesome to labor and working families in WNY, because the difference between wages in these two areas of the economy is great. The second chart shows the average annual wages for these two areas of the economy – the goods-producing industries have a much higher average annual wage than the service-providing. As the private sector continues to grow more jobs in the service-providing industries, the average wage for the entire private sector is kept low – this is simple arithmetic.

Labor and working families should voice their concerns about the economy adding low-paying jobs. Any government policy or program that promotes job creation in the service-providing industries is worth reconsidering. Not enough of these jobs are going to pay a wage that can support a decent living standard for labor and working families.

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