What is happening to middle-wage jobs in the District?

Middle-wage jobs lost a lot of ground during the great recession, but they are making a comeback across the nation.  Yet high-wage and low-wage jobs are growing faster than the middle-wage jobs, suggesting that over time, the job market will be more polarized.

Is the job market in the District becoming more polarized?  To see this, we looked at employment and wage data by occupation for years 2005 through 2014 (BLS just released the 2014 data on March 25).  We then grouped the data by wage level (low, middle, or high).  Middle-wage occupations have median salaries that fall within the 25th and 75th percentiles of the annual wages paid in the District.  We define occupations with median wages below the 25th percentile as low-wage, and occupations with median wages above the 75th percentile as high-wage.

This grouping exercise reveals interesting things about our city. First, a low-wage job in the District pays a lot (but might not buy much): In 2014, the District’s 25th percentile of the annual wages, at $37,440, was greater than the U.S. median wage of $35,540.

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Second, middle-wage jobs–the bulk of positions in professional and business service areas, health, and education–have grown through the recession, but they are no longer the engine of District’s economy.  These jobs never went away, but their growth declined with the recession, and never really boomed.  Occupations that pay low-wages—these include positions in retail, food services, grounds maintenance, and personal services—have more than recovered from the losses during the recession.  These jobs have been the biggest source of increase in employment since the official end of the recession.  Between 2011 and 2014, the District added about 21,000 low-wage jobs, easily reversing the loss of 7,500 jobs in this category during the recession.  Finally, high-paying jobs increased rapidly during the recession, first due to federal hiringand then with population growth, but the growth in these occupations have also slowed down.

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The composition of middle-wage occupations could change over time.  Middle-wage occupations are changing either because these occupations are no longer needed in the District economy, or because these jobs are no longer middle-wage.  Between 2013 and 2014, middle-wage jobs declined by 9,700, partly because there were fewer accountants, property, real estate, and community association managers, fundraisers, counselors, and legal secretaries.  Another part of the decline was that some occupations typically considered to pay middle-level wages transitioned into low-level wage occupations. For example, office and administrative support workers (about 2000 of them in the District) made the permanent transition to low-wage workers around 2012.  Of course, some office and administrative support workers still get paid a middle-level wage, but if one were to look for a job in this occupation, chances are his or her salary would be less than $37,400.

The interactive graphs show the number of jobs paying middle-wages and the number of occupations that could be considered middle-wage under each major occupation category.

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What exactly is this data? We used BLS Occupation Employment Statistics to construct a series of low-, middle-, and high-wage occupations.  Low-wage occupations are defined as occupations with annual median salaries below the 25th percentile of wages for the entire city in the same year.  High-wage occupations are defined as occupations with annual median salaries above the 75th percentile.  Middle-wage occupations lie in between.

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