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NY Fed: High-wage jobs fully recover as low-wage jobs start to trend down — again

·Reporter
·2 min read

The New York Fed said Tuesday that employment among high-wage workers now appears to have fully recovered from the pandemic. But low-wage jobs are tilting in the other direction, appearing to see job losses yet again after last year’s partial recovery.

A new report on economic inequality looks at employment by wage group, defining “high wage” work as annual income above $85,000 and “low wage” work as income below $30,000.

High-wage workers appear to have actually gained employment relative to pre-pandemic levels in February 2020.

By comparison, low-wage workers remained 14% below pre-pandemic levels with employment actually trending down — again.

Middle-wage groups, meanwhile, remain slightly below where they were in February 2020.

A report from the New York Fed on economic inequality details differences in employment levels among low, high wage workers. (Source: New York Fed)
A report from the New York Fed on economic inequality details differences in employment levels among low, high wage workers. (Source: New York Fed)

The report also notes that job shortfalls were also different across demographic groups.

While December levels of employment were 5% below pre-pandemic levels overall, shortfalls were 7% for those with only a high school education and 6% for Blacks and Hispanics.

The New York Fed pointed to the virus’s disproportionate impact of the virus on high-contact jobs like leisure and hospitality and retail, many of which are low-income jobs. With an inability to work remote, firms chose to lay them off in the teeth of the pandemic.

NEW YORK, NEW YORK - FEBRUARY 07: A waiter at Baby Brasa carries a tray of food during a snow storm on February 07, 2021 in New York City. The pandemic continues to burden restaurants and bars as businesses struggle to thrive with evolving government restrictions and social distancing plans made harder by inclement weather. (Photo by Alexi Rosenfeld/Getty Images)
NEW YORK, NEW YORK - FEBRUARY 07: A waiter at Baby Brasa carries a tray of food during a snow storm on February 07, 2021 in New York City. The pandemic continues to burden restaurants and bars as businesses struggle to thrive with evolving government restrictions and social distancing plans made harder by inclement weather. (Photo by Alexi Rosenfeld/Getty Images)

The Bureau of Labor Statistics notes that while nearly 60% of workers in high-wage jobs are reported to have teleworked, less than 10% of workers in low-wage jobs were able to do the same.

Rising virus cases and cold weather limiting the ability of restaurants to operate outside may explain the return of a decline in low-wage employment.

The report adds nuance to the January jobs report, which showed non-farm payroll gains of 49,000 with the unemployment rate declining to 6.3%.

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Brian Cheung is a reporter covering the Fed, economics, and banking for Yahoo Finance. You can follow him on Twitter @bcheungz.

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