APRIL 2015 LOW-WAGE CALIFORNIA: 2014 CHARTBOOK The Workers Their Families The Jobs The Industries Future Job Trends
SECTION 1 The Context: Growing Inequality and Stagnant Wages in California Growing Inequality Higher Productivity, Stagnant Wages
Growing Inequality Like the rest of the country, California has seen a steep growth in inequality since the late 1970s. Workers in the bottom and the middle of the wage distribution saw their earnings decline in real terms, after adjusting for inflation, while high-wage workers saw their earnings rise. Real wages for the median worker (in the 50 th percentile) declined by 5 percent. Change in Real Wages in California, 1979 2014 47% 35% 17% 6% -6% -12% -10% -5% -5% -1% 10 th 20 th 30 th 40 th 50 th 60 th 70 th 80 th 90 th 95 th Wage Percentiles Source: Authors analysis of Center for Economic and Policy Research s data extract of the Current Population Survey, Outgoing Rotation Groups, 1979 2014. Wages do not include tips, overtime pay, or commission. Section 1 The Context: Growing Inequality and Stagnant Wages in California page 2
Higher Productivity, Stagnant Wages California workers have become more productive, but their wages and benefits have stagnated. Between 1979 and 2013, productivity increased by 89 percent, but median hourly compensation (wages plus benefits) for nonsupervisory/production workers increased by only 3 percent, adjusting for inflation. Growth of Real Median Compensation and Productivity in California, 1979 2013 Cumulative Percentage Change Since 1979 Productivity Median Hourly Compensation 89% 3% 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 Source: Economic Policy Institute analysis of unpublished total economy data from Bureau of Labor Statistics, Labor Productivity and Costs program; employment data from Bureau of Labor Statistics, Local Area Unemployment Statistics; wage data from the Current Population Survey; and compensation data from the Bureau of Economic Analysis, State/National Income and Product Accounts public data series, 1979 2013. Section 1 The Context: Growing Inequality and Stagnant Wages in California page 3
SECTION 2 California s Low-Wage Jobs Problem How Do We Define Low Wage? Number and Percent of Low-Wage Workers in California, 2014
How Do We Define Low Wage? This report defines a low-wage worker as someone who earned less than two-thirds of the median hourly wage for full-time workers, which is a widely used metric. 1 California s median hourly wage for full-time workers was $20.44 in 2014, and two-thirds of that wage is $13.63. Therefore, this report considers any individual who earned less than $13.63 per hour in 2014 to be a low-wage worker. Definition Low-wage worker = earned less than $13.63 per hour in 2014 The Sample California workers, ages 18 64, who were not self-employed For More Documentation See Data and Methods for more details 1 Boushey H., Fremstad S., Gragg R., and Waller M. (2007) Understanding Low-Wage Work in the United States. The Mobility Agenda and Center for Economic and Policy Research. Source: Authors analysis of Center for Economic and Policy Research s data extract of the Current Population Survey, Outgoing Rotation Groups, 2014. Section 2 California s Low-Wage Jobs Problem page 5
Number and Percent of Low-Wage Workers in California, 2014 One of every three California workers earns low wages 33 percent of California workers earned less than $13.63 in 2014 This percentage is up from 30 percent in 2000 That translates into 4,771,000 low-wage workers Source: Authors analysis of Center for Economic and Policy Research s data extract of the Current Population Survey, Outgoing Rotation Groups, 2000 and 2014. Section 2 California s Low-Wage Jobs Problem page 6
SECTION 3 Profile of Low-Wage Workers Age Education Changes in Age and Education Over Time Race, Ethnicity and Nativity Gender Rates of Low-Wage Work
Age The large majority (95 percent) of California s low-wage workers are adults, not teens. The average age for low-wage workers is 35, compared to 40 for all workers. Age Distribution of California Workers, 2014 11% 15% 24% 55 64 34% 40 54 19% 30 39 24% 20 29 40% 18 19 25% 5% 2% Low-Wage Workers All Workers Source: Authors analysis of Center for Economic and Policy Research s data extract of the Current Population Survey, Outgoing Rotation Groups, 2014. Teens aged 16 17 make up 0.6 percent of the overall workforce under age 65, and 1.5 percent of the low-wage workforce under age 65. Section 3 Profile of Low-Wage Workers page 8
Education California s low-wage workers are less educated than the overall workforce, but more than 45 percent have some college experience or higher, and about one in ten has a bachelor s or advanced degree. Educational Distribution of California Workers, 2014 Less than High School High School Some College Associate's Degree Bachelor's Degree Advanced Degree Low-Wage Workers 24% 30% 27% 7% 10% 3% All Workers 12% 22% 21% 9% 23% 12% Source: Authors analysis of Center for Economic and Policy Research s data extract of the Current Population Survey, Outgoing Rotation Groups, 2014. Section 3 Profile of Low-Wage Workers page 9
Changes in Age and Education Over Time California s low-wage workers are older and more educated than ever. Between 1979 and 2014, the share of teenagers declined by more than half, while the age group with the biggest growth was 35 64 year olds. Over the same time period, the percentage with less than a high school degree declined, while the percentage with some college experience or a college degree increased. Age and Education Distribution of Low-Wage California Workers, 1979 2014 Age Education 8% 13% 35 64 25 34 32% 44% College and Advanced Degrees 31% 35% 20 24 24% Some College 18 19 26% High School 32% 33% 28% Less than High School 25% 16% 5% 1979 2014 29% 20% 1979 2014 Source: Authors analysis of Center for Economic and Policy Research s data extract of the Current Population Survey, Outgoing Rotation Groups, 1979 2014. Estimates in this chart do not perfectly match estimates in previous slides due to the use of a different wage variable to allow for comparability over time (wages for this chart exclude tips, commissions, and overtime). Section 3 Profile of Low-Wage Workers page 10
Race, Ethnicity, and Nativity Workers of color constitute the majority of California s workforce. This is especially true for the state s low-wage workers: for example, 56 percent are Latino/a, compared to 39 percent for all workers. A higher proportion of California s low-wage workforce is foreign born (40 percent) as compared to the proportion of all workers (33 percent). Race and Ethnicity of California Workers, 2014 Latino/a Black Asian White Other Low-Wage Workers 56% 6% 11% 26% All Workers 39% 5% 16% 39% Percent of California Workers Who are Foreign Born, 2014 Low-Wage Workers 40% All Workers 33% Source: Authors analysis of Center for Economic and Policy Research s data extract of the Current Population Survey, Outgoing Rotation Groups, 2014. Section 3 Profile of Low-Wage Workers page 11
Gender Overall, half of California s low-wage workers are women, but there is significant variation across demographic groups. For all groups except Latinos, women make up a disproportionate share of low-wage workers. Percent Women, by Race/Ethnicity, Among California s Low-Wage Workers, 2014 All Low-Wage Workers 51% Asian 57% Latina 48% Black 51% White 55% Source: Authors analysis of Center for Economic and Policy Research s data extract of the Current Population Survey, Outgoing Rotation Groups, 2014. Section 3 Profile of Low-Wage Workers page 12
Rates of Low-Wage Work It is also useful to examine the proportion of low-wage workers within major demographic groups (i.e., the of low-wage work). Rates of low-wage work are above average among young workers, women, Latino, black, and foreign-born workers. Workers without a college degree also have higher rates of low-wage work. Share of Low-Wage Workers within Major Demographic Groups in California, 2014 18 19 87% 20 29 54% Age 30 39 26% 40 54 24% 55 64 23% Gender Male Female 30% 36% White 22% Race/ Ethnicity Black Latino/a Asian 23% 38% 48% Other 36% Country of Birth U.S. Born Foreign Born 30% 40% Less than High School 65% High School 45% Education Some College Associate's Degree 28% 42% Bachelor's Degree 14% Advanced Degree 7% Average: 33% Source: Authors analysis of Center for Economic and Policy Research s data extract of the Current Population Survey, Outgoing Rotation Groups, 2014. Section 3 Profile of Low-Wage Workers page 13
SECTION 4 The Families of Low-Wage Workers Family Income Workers Share of Family Income Family Poverty Level Family Structure
Family Income Even when combining the wages of all workers in the family, the median family income of California s low-wage workers was about $29,000 in 2013, half of the state s overall median. Adjusted for inflation, low-wage workers families have seen their incomes decline by 12 percent since 2000 (compared to a 3 percent decline for all families). Family Income of California Workers, 2000 2013 $64,800 $63,000 $33,100 $29,100 2000 2013 2000 2013 Low-Wage Workers Families All Workers Families Source: Authors analysis of Center for Economic and Policy Research s data extract of the Current Population Survey, Annual Social and Economic Supplement, 2000 2013. Wages are in constant 2014 dollars. Section 4 The Families of Low-Wage Workers page 15
Workers Share of Family Income Low-wage workers earnings make up a majority (61 percent) of their family s income. Moreover, 42 percent of low-wage workers are the sole earner in their family (similar to the workforce as a whole). Average Share of Family Income Earned by California Workers, 2013 Low-Wage Workers 61% 70% All Workers Source: Authors analysis of Center for Economic and Policy Research s data extract of the Current Population Survey, Annual Social and Economic Supplement, 2013. Section 4 The Families of Low-Wage Workers page 16
Family Poverty Level Low-wage workers are much more likely to live in families with incomes below the Federal Poverty Level (FPL) as compared to the overall California workforce. Almost 60 percent of low-wage workers live in families under 200 percent of the FPL. Family Poverty Level of California Workers, 2013 13% 28% 42% 400% + 200 400% 14% 19% 31% 150 200% 100 150% 26% Low-Wage Workers 9% 9% 10% All Workers <100% Source: Authors analysis of Center for Economic and Policy Research s data extract of the Current Population Survey, Annual Social and Economic Supplement, 2013. Section 4 The Families of Low-Wage Workers page 17
Family Structure Close to half (40 percent) of low-wage workers are married and 43 percent have children. Family Structure of California Workers, 2013 Married without Children Married with Children Single without Children Single with Children Low-Wage Workers 17% 23% 40% 20% All Workers 23% 30% 35% 12% Source: Authors analysis of Center for Economic and Policy Research s data extract of the Current Population Survey, Annual Social and Economic Supplement, 2013. Section 4 The Families of Low-Wage Workers page 18
SECTION 5 Profile of Low-Wage Jobs Wages and Earnings Full-Time/Part-Time Status Full-Year/Part-Year Status Union Membership Employee Benefits Other Dimensions of Job Quality
Wages and Earnings The median wage for low-wage workers was $9.97 an hour in 2014, almost half the median for all California workers. Median annual earnings for low-wage workers were $15,300 in 2014, and only $9,200 for part-time workers. But even when working full time, median earnings for low-wage workers only reached $20,400. Median Hourly Wages in California, 2014 Median Annual Earnings in California, 2013 $18.36 Overall Low-Wage Workers All Workers $15,300 $35,600 $9.97 Part Time Low-Wage Workers All Workers $9,200 $12,200 Low-Wage Workers All Workers Full Time Low-Wage Workers All Workers $20,400 $43,800 Source: Authors analysis of Center for Economic and Policy Research s data extract of the Current Population Survey, Annual Social and Economic Supplement 2013 and Outgoing Rotation Groups, 2014. Wages are in constant 2014 dollars. Section 5 Profile of Low-Wage Jobs page 20
Full-Time/Part-Time Status Low-wage workers are almost twice as likely to work part time (defined as less than 35 hours per week) compared to the overall California workforce. Low-wage workers also have double the rate of involuntary part-time work compared to the overall workforce (14 percent compared to 7 percent). Full-Time/Part-Time Status for California Workers, 2014 Full-Time 60% Part-Time 40% Voluntary 26% Full-Time 76% Part-Time 24% Voluntary 17% Involuntary 14% Involuntary 7% Low-Wage Workers All Workers Source: Authors analysis of Center for Economic and Policy Research s data extract of the Current Population Survey, Outgoing Rotation Groups, 2014. Full-Year/Part-Year Status Not only are low-wage workers more likely to work part time, they re also more likely to work part year (less than 50 weeks) compared to the overall workforce. The result is that only 54 percent of low-wage workers have full-time, full-year jobs. Full-Year/Part-Year Work for California Workers, 2013 22% 12% 54% Full-Time, Full-Year Full-Time, Part-Year Part-Time, Full-Year 7% 12% 10% 71% 12% Part-Time, Part-Year Low-Wage Workers All Workers Source: Authors analysis of Center for Economic and Policy Research s data extract of the Current Population Survey, Annual Social and Economic Supplement, 2013. Section 5 Profile of Low-Wage Jobs page 21
Union Membership Low-wage workers are less likely to be members of a union compared to the overall California workforce. Percent of California Workers Who are Union Members, 2014 Low-Wage Workers 8% 16% All Workers Source: Authors analysis of Center for Economic and Policy Research s data extract of the Current Population Survey, Outgoing Rotation Groups, 2014. Section 5 Profile of Low-Wage Jobs page 22
Employee Benefits Low-wage workers are half as likely as the overall California workforce to receive health insurance or pension benefits from their employer. Since 1980, the share of low-wage workers with health insurance benefits has fallen by half, and the share with pension benefits has fallen by almost one-fourth. Percent of California Workers with Employer-Sponsored Health or Pension Benefits, 2013 Employer-Sponsored Health Insurance Low-Wage Workers All Workers 23% 54% Employer-Sponsored Pension Low-Wage Workers All Workers 25% 51% Source: Authors analysis of Center for Economic and Policy Research s data extract of the Current Population Survey, Annual Social and Economic Supplement, 2013. Section 5 Profile of Low-Wage Jobs page 23
Other Dimensions of Job Quality Lack of Paid Sick Days Only 29 percent of California s low-wage workers had access to paid sick days in 2012 (prior to passage of California s paid sick leave legislation), compared to 67 percent of the overall working population (statistics are for full-time workers only). 1 Unpredictable and On Call Schedules In a national sample of early career workers in 2011, the large majority of low-wage workers had fluctuations in their work hours (70 percent for full-time workers and 85 percent of part-time workers), and close to half received one week or less advanced notice of scheduling changes. 2 In a 2013 survey of California grocery store workers, 47 percent reported that their schedule varied from week to week at least some of the time, and 25 percent reported that they had to be available for on call shifts at least some of the time. 3 Wage Theft A 2008 survey of very low-wage workers in Los Angeles (median wage of $8.06 in 2008 dollars) found rampant wage theft: 30 percent were paid less than the minimum wage in the previous work week; 79 percent of those who worked overtime were not paid the legally required overtime rate; and 71 percent did not receive any pay when they worked before or after their regular shift. Workers with violations lost an average of $2,070 to wage theft, out of total annual earnings of $16,536. 4 1 Milli J. (2014) Access to Paid Sick Days in California. Institute for Women s Policy Research. 2 Lambert S., Fugiel P., and Henly J. (2014) Precarious Work Schedules among Early-Career Employees in the US: A National Snapshot. EINet. 3 Jayaraman S. (2014) Shelved: How Wages and Working Conditions for California s Food Retail Workers Have Declined as the Industry Has Thrived. Food Labor Research Center, University of California, Berkeley. 4 Milkman R., Gonzalez A., and Narro V. (2010) Wage Theft and Workplace Violations in Los Angeles Institute for Research on Labor and Employment, University of California, Los Angeles. Section 5 Profile of Low-Wage Jobs page 24
SECTION 6 A Closer Look at Low-Wage Industries and Occupations Industries Rates of Low-Wage Work, by Industry Major Occupations Rates of Low-Wage Work, by Major Occupations Top Ten Detailed Low-Wage Occupations Self-Employed Workers
Industries Low-wage workers are employed throughout California s economy, but retailers and restaurants alone account for 28 percent of the state s low-wage workers. (Industry is a category that describes businesses.) Distribution of California s Low-Wage Workers Across Industries, 2012 2013 Retail Trade Restaurants and Other Food Services Educational Services Administrative and Business Services Personal Services and Non-Profits Agriculture, Forestry, and Fishing Durable Manufacturing Non-Durable Manufacturing Construction Outpatient Health Care Services Community, Family, and Child Care Services Finance, Insurance, and Real Estate Grocery Stores Transportation, Warehousing, and Utilities Wholesale Trade Arts, Entertainment, and Recreation Professional, Scientific, and Management Services Hospitals Public Administration Nursing and Residential Care Facilities Accommodation Information and Communication Mining 0% 5% 5% 5% 4% 4% 4% 4% 4% 3% 3% 3% 3% 2% 2% 2% 2% 1% 6% 6% 6% 14% 14% Source: Authors analysis of American Community Survey IPUMS, 2012 and 2013, 1-year samples. Section 6 Closer Look at Low-Wage Industries and Occupations page 26
Rates of Low-Wage Work, by Industry California industries that have high rates of low-wage work include key parts of the service sector (such as restaurants, retail, hotels, and home care and child care services), as well as key parts of the goods-producing sector (such as agriculture and non-durable manufacturing). Share of California Workers That Earn Low Wages Within Industries, 2012 2013 Agriculture, Forestry, and Fishing Restaurants and Other Food Services Grocery Stores Community, Family, and Child Care Services Nursing and Residential Care Facilities Retail Trade Accommodation Administrative and Business Services Personal Services and Non-Profits Arts, Entertainment, and Recreation Non-Durable Manufacturing Wholesale Trade Outpatient Health Care Services Construction Transportation, Warehousing, and Utilities Educational Services Durable Manufacturing Finance, Insurance, and Real Estate Information and Communication Hospitals Mining Public Administration Professional, Scientific and Management Services 52% 51% 51% 50% 50% 50% 49% 43% 41% 32% 31% 29% 25% 24% 22% 20% 17% 15% 14% 13% 12% Average: 33% 71% 68% Source: Authors analysis of American Community Survey IPUMS, 2012 and 2013, 1-year samples. Section 6 Closer Look at Low-Wage Industries and Occupations page 27
Major Occupations Low-wage workers are employed in all major occupations, but three groups office and administrative support, sales, and food preparation and serving occupations account for 41 percent of California s low-wage workers. (Occupation is a category that describes jobs.) Distribution of California s Low-Wage Workers Across Occupations, 2012 2013 Office and Administrative Support Sales and Related Occupations Food Preparation and Serving Occupations Transportation and Material Movement Production Occupations Personal Care and Service Occupations Building and Grounds Cleaning Farming, Fishing, and Forestry Education, Training, and Library Occupations Construction and Extraction Healthcare Support Occupations Management, Business, and Science Occupations Installation, Maintenence, and Repair Protective Service Healthcare Practitioner and Technical Occupations Arts, Entertainment, Sports, and Media Commmunity and Social Services Business Operations Specialists Financial Specialists Computer and Mathematical Operations Life, Physical, and Social Science Occupations Architecture and Engineering Occupations Legal Occupations 4% 4% 4% 3% 3% 2% 2% 2% 1% 1% 1% 1% 1% 0% 0% 0% 9% 8% 7% 7% 13% 14% 14% Source: Authors analysis of American Community Survey IPUMS, 2012 and 2013, 1-year samples. Section 6 Closer Look at Low-Wage Industries and Occupations page 28
Rates of Low-Wage Work, by Major Occupations California occupations that have high rates of low-wage work include service jobs (such as food preparation workers, home care workers, and janitors), as well as jobs in the goods-producing sector (such as farm workers and warehouse workers). Share of California Workers That Earn Low Wages Within Occupations, 2012 2013 Farming, Fishing and Forestry Food Preparation and Serving Occupations Personal Care and Service Occupations Building and Grounds Cleaning Transportation and Material Movement Healthcare Support Occupations Production Occupations Sales and Related Occupations Office and Administrative Support Construction and Extraction Installation, Maintenence, and Repair Protective Service Education, Training and Library Occupations Arts, Entertainment, Sports, and Media Commmunity and Social Services Life, Physical, and Social Science Occupations Business Operations Specialists Healthcare Practitioner and Technical Occupations Management, Business, and Science Occupations Financial Specialists Legal Occupations Computer and Mathematical Operations Architecture and Engineering Occupations 49% 48% 47% 45% 35% 31% 28% 26% 24% 21% 20% 13% 12% 11% 10% 8% 7% 6% 4% Average: 33% 68% 67% 63% 79% Source: Authors analysis of American Community Survey IPUMS, 2012 and 2013, 1-year samples. Section 6 Closer Look at Low-Wage Industries and Occupations page 29
Top Ten Detailed Low-Wage Occupations Top Ten Low-Wage Occupations in California, 2012 2013 Ranked by Number of Low-Wage Workers Retail Sales Workers 504,600 Cooks and Food Preparation Workers 267,800 Material Moving Workers 253,100 Personal Care Aides, Childcare Workers, and Other Personal Care and Service Workers 252,700 Customer Service Representatives and Other Information and Record Clerks 234,000 Janitors, Maids, and Pest Control Workers 225,800 Waiters, Waitresses, Bartenders, and Other Food and Beverage Serving Workers 197,300 Agricultural Workers 191,200 Construction Trades Workers 169,800 Material Recording, Scheduling, Dispatching and Distributing Workers 160,900 Ranked by Percent of the Occupation that is Low Wage Agricultural Workers 82 Textile, Apparel, and Furnishings Workers 79 Cooks and Food Preparation Workers 76 Cafeteria Attendants, Dishwashers, and Hosts and Hostesses 75 Personal Care Aides, Childcare Workers, and Other Personal Care and Service Workers 71 Grounds Maintenance Workers 68 Retail Sales Workers 66 Animal Care and Service Workers 65 Personal Appearance Workers 63 Janitors, Maids, and Pest Control Workers 63 Source: Authors analysis of American Community Survey IPUMS, 2012 and 2013, 1-year samples. Data in the first table are rounded to the nearest 100. Section 6 Closer Look at Low-Wage Industries and Occupations page 30
Self-Employed Workers A separate analysis of self-employed workers in California shows that 43 percent earn low wages. The top five industries for low-wage self-employed workers are construction, landscaping services, beauty salons, building services, and child day care services. Percent of Self-Employed Workers in California Who Earn Low Wages, 2013 Part 43% Time 40% Top Five Industries Construction Landscaping Services Beauty Salons Building Services Child Day Care Services Source: Authors analysis of Center for Economic and Policy Research s data extract of the Current Population Survey, Annual Social and Economic Supplement, 2013. Section 6 Closer Look at Low-Wage Industries and Occupations page 31
SECTION 7 Future Employment Trends Employment Projections: Industries Employment Projections: Occupations Employment Projections: Educational Requirements
Employment Projections: Industries Official employment projections to 2022 do not show a significant change in California s industry mix, meaning that our state s low-wage jobs problem will continue into the foreseeable future. Industry Distribution of California Employment, 2012 2022 Industry Employment Share (%) 2012 2022 projected 2012 2022 Percentage Point Change Farm Workers, Logging, and Mining 2.6 2.6-0.1 Construction 3.6 4.2 0.6 Durable Goods Manufacturing 4.8 4.0-0.8 Nondurable Goods Manufacturing 2.9 2.4-0.5 Wholesale Trade 4.2 4.2 0.0 Retail Trade 9.7 9.6-0.1 Transportation and Warehousing and Utilities 3.0 3.0 0.0 Information 2.7 2.7 0.0 Professional and Business Services 18.5 19.5 1.0 Educational Services (Private) 2.1 2.2 0.2 Health Care and Social Assistance 11.3 12.5 1.2 Arts, Entertainment, and Recreation 1.6 1.6 0.0 Accommodation and Food Services 8.3 8.6 0.4 Other Services 3.5 3.3-0.2 Self-Employed 6.7 6.3-0.4 Government (Federal, State, and Local) 14.6 13.2-1.4 Source: California Industry Employment Projections, Employment Development Department, Labor Market Information Division, 2012 2022. Section 7 Future Employment Trends page 33
Employment Projections: Occupations Low-wage occupations (shown in red) top the list of projected job growth in California between 2012 and 2022. Top Ten California Occupations with Largest Projected Employment Growth, 2012 2022 Occupation Net Employment Growth 2012 2022 Median Wage 2012 2013 Low-Wage Occupations { Not Low-Wage Occupations Low-Wage Occupations { Personal Care Aides Food Preparation and Serving Workers Retail Salespersons Laborers and Freight, Stock, and Material Movers Waiters and Waitresses Registered Nurses General and Operations Managers Secretaries and Administrative Assistants Cashiers Restaurant Cooks { 200,300 76,400 59,700 51,800 44,200 42,900 41,900 37,300 34,800 33,700 $9.40 $9.33 $11.63 $11.85 $11.23 $41.98 $35.10 $18.83 $9.25 $9.79 Source: California Industry and Occupation Employment Projections, Employment Development Department, Labor Market Information Division, 2012 2022. Median wage from authors analysis of American Community Survey IPUMS, 2012 and 2013, 1-year samples. Wages are in constant 2014 dollars. Section 7 Future Employment Trends page 34
Employment Projections: Educational Requirements Official projections also show no significant change by 2022 in the distribution of employment by occupations required education for an entry-level job. Percent of California Occupations by Entry-Level Educational Requirements, 2012 2022 Master's Degree and Higher 4% 4% Bachelor's Degree 19% 20% 2012 2022 Associate's Degree 4% 4% Some College, No Degree 6% 6% High School Diploma or GED 37% 36% Less than High School 29% 30% Source: California Occupation Employment Projections, Employment Development Department, Labor Market Information Division, 2012 2022. Section 7 Future Employment Trends page 35
SECTION 8 The Impact of Low-Wage Jobs Economic Insecurity for Families Other Effects of Low Wages The Public Cost of Low-Wage Work
Economic Insecurity for Families Low-wage workers families are more likely to have children receiving free or reduced-price school lunch, to have a higher than recommended rent burden, to have a family member enrolled in Medi-Cal, and to live below the Federal Poverty Line. Economic Insecurity Measures for California Families, 2012 2013 Proportion of households with children that receive free or reduced-price lunch 47% 69% Proportion of households that pay more than 30 percent of their income in rent 37% 54% Low-Wage Workers All Workers Proportion of workers with a family member enrolled in Medi-Cal 17% 28% Proportion of workers with family income below Federal Poverty Line 10% 26% Source: Authors analysis of American Community Survey IPUMS, 2012 and 2013, 1-year samples, and Center for Economic and Policy Research s data extract of the Current Population Survey, Annual Social and Economic Supplement, 2013. Section 8 The Impact of Low-Wage Jobs page 37
Other Effects of Low Wages Low-wage jobs have other negative effects on the lives of workers and their children, both in the near and long term. Low wages have been shown to negatively affect the health of workers. All else equal, low wages (and in turn poverty) result in increased rates of high blood pressure and high levels of stress, as well as shorter life expectancy. 1 Parents earnings affect the future earnings and work hours of their children. All else equal, children from low-income families earn less and work fewer hours as adults. These effects are most pronounced when family income is low during the prenatal period and first five years of the child s life. 2 Parents earnings affect the academic outcomes of their children. Multiple randomized studies have shown that an increase in family income results in young children doing better in school and completing more years of school. 3 The reverse is also true, suggesting there are negative effects on the educational attainment of children from low-income families. 1 Leigh J. and Du J. (2012) Are low wages risk factors for hypertension? European Journal of Public Health, Volume 22, Number 6, Pages 854-859. Also Waldron, H. (2007) Trends in Mortality Differentials and Life Expectancy for Male Social Security-Covered Workers, by Average Relative Earnings. U.S. Social Security Administration; Office of Policy. ORES Working Paper No.108. 2 Duncan G., Ziol-Guest K. and Kalil A. (2010) Early-Childhood Poverty and Adult Attainment, Behavior, and Health. Child Development, January/February 2010, Volume 81, Number 1, Pages 306-325. 3 Duncan G., Morris P. and Rodriguez C. (2011) Does money really matter? Estimating impacts of family income on young children s achievement with data from random-assignment experiments. Developmental Psychology, Volume 47, Number 5, Pages 1263-1279. Also Clark-Kaufman E., Duncan G. and Morris P. (2003) How welfare policies affect children and adolescent achievement. American Economic Review, Volume 93, Number 2, Pages 299-303. Section 8 The Impact of Low-Wage Jobs page 38
The Public Cost of Low-Wage Work The families of low-wage workers are more likely to have to rely on public assistance programs to make ends meet. From 2007 2012, the average annual expenditures of TANF, EITC, Medicaid, CHIP, and Food Stamp programs for low-wage workers families in California was $14.3 billion. Average Annual Expenditures by Public Assistance Programs for Low-Wage Workers Families in California (in Millions), 2007 2012 $4,025 $3,953 $3,719 $1,739 $866 TANF EITC Medicaid Adults Medicaid Children Food Stamps Source: Authors analysis of Current Population Survey, Annual Social and Economic Supplement, 2007-2012, and program administrative data. Expenditures are in constant 2014 dollars. Section 8 The Impact of Low-Wage Jobs page 39
SECTION 9 Where Low-Wage Workers Work The Geography of Low-Wage Work
The Geography of Low-Wage Work California s low-wage workers are concentrated in Southern California, with 51 percent working in that region. By contrast, the San Joaquin Valley region has the highest rate of low-wage work (44 percent of its workforce). For more geographic breakdowns, see the Interactive Maps. Where California s Low-Wage Workers Work, 2012 2013 Economic Regions Percent of CA s Low-Wage Workers in the Region Percent of CA s Entire Workforce in the Region Percent of the Region s Workers that Earn Low Wages Southern California 51 48 37 Bay Area 16 23 25 San Joaquin Valley 11 9 44 Southern Border 9 9 33 Greater Sacramento 5 6 32 Central Coast 4 3 40 Northern Sacramento Valley 1 1 41 Northern California 1 1 40 Central Sierra 0 0 36 Source: Authors analysis of American Community Survey IPUMS, 2012 and 2013, 1-year samples. Economic Region definitions are taken from the California Economic Strategy Panel, formerly a part of the California Employment Development Department. The analysis follows the EDD region definitions, with two exceptions due to data limitations. Trinity County is included in the Northern Sacramento Valley region, and San Benito County is a part of the Central Coast region. Section 9 Where Low-Wage Workers Work page 41
Institute for Research on Labor and Employment University of California, Berkeley 2521 Channing Way Berkeley, CA 94720-5555 (510) 642-0323 laborcenter.berkeley.edu UC Berkeley Center for Labor Research and Education Founded in 1964, the Center for Labor Research and Education (Labor Center) at the University of California, Berkeley, works on the most pressing economic challenges affecting working families in California and communities across the country. The Labor Center provides timely, policy-relevant research on labor and employment issues for policy makers and stakeholders, and conducts trainings for a new, diverse generation of worker leaders. Low-Wage Work in California: 2014 Chartbook is the first edition of an ongoing resource with a wide range of information about low-wage workers, their families, and their jobs. The chartbook will be updated annually as new U.S. Census Bureau data becomes available. Low-Wage Work in California: 2014 Chartbook was researched and written by: Annette Bernhardt, Senior Researcher at the UC Berkeley Center for Labor Research and Education, and Visiting Professor at the UC Berkeley Sociology Department Ian Perry, Research and Data Analyst at the UC Berkeley Center for Labor Research and Education Lindsay Cattell, Researcher at the UC Berkeley Goldman School of Public Policy