Households that earn less than $20,000 a year have an unemployment rate of 21 percent. This number largely contrasts to an unemployment rate of 3.2 percent for households that make more than $150,000 a year. Workers in the middle class have taken jobs that usually employ lower-skilled, low-income workers, displacing them as a result.
"This was no 'equal opportunity' recession or an 'equal opportunity' recovery," said Andrew Sum, director of the Center for Labor Market Studies at Northeastern University, to the Associated Press. "One part of America is in depression, while another part is in full employment."
Black workers in households earning less than $20,000 were the most likely to be unemployed, at 48.4 percent. In August, the overall African-American jobless rate climbed from 12.6 to 13.3 percent. Low-income Latinos and whites were just as likely to be unemployed, at 38 percent and 36.8 percent. This compares to 3.8 percent for low-income Asian-Americans.
Associated Press reports:
Economists call this a "bumping down" or "crowding out" in the labor market, a domino effect that pushes out lower-income workers, pushes median income downward and contributes to income inequality. Because many mid-skill jobs are being lost to globalization and automation, recent U.S. growth in low-wage jobs has not come fast enough to absorb displaced workers at the bottom.
Low-wage workers are now older and better educated than ever, with especially large jumps in those with at least some college-level training.
"The people at the bottom are going to be continually squeezed, and I don't see this ending anytime soon," said Harvard economist Richard Freeman. "If the economy were growing enough or unions were stronger, it would be possible for the less educated to do better and for the lower income to improve. But in our current world, where we are still adjusting to globalization, that is not very likely to happen."
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