Dina Smith sits down at the kitchen table with a small stack of bills every two weeks and asks herself the same question.
“What needs to be taken care of right this second?”
Her twice-monthly paycheck of about $350 means her options are usually limited to paying utilities and restocking a near-empty refrigerator. She’ll put off repairs to her broken-down 2001 Saturn – again – and try to find a few dollars for bus fare instead.
This is life today in one of the tens of thousands of Greater Cincinnati and Northern Kentucky households that survive on the paycheck of a low-wage breadwinner.
Now, their numbers are growing faster, putting more families at risk and slowing an already fragile economic recovery regionwide. Everyone feels the sting when households have less money for homes, furniture, cars, TVs, toasters, smartphones and new shoes.
It’s a legacy of the crash that families and the wider economy may suffer with for years.
A study by the National Employment Law Project finds that low-wage jobs, or those it defines as paying less than $14 an hour, have dominated the economic recovery, often at the expense of better-paying jobs.
The group’s Census-based research shows that low-wage jobs accounted for about 20 percent of job losses during the recession, but almost 60 percent of jobs gained during the recovery.
Mid-wage jobs, by contrast, accounted for 60 percent of recession losses, but only about 20 percent of recovery growth.
“It’s very challenging,” said Smith, who supports three sons in Cumminsville on the $9.80 an hour she earns working as a janitor. “We have to live paycheck to paycheck.”
Life ‘more precarious’ for low-wage workers
Low-wage jobs always have been an important part of the economy, whether they’re fast-food jobs that give teenagers their first taste of the working world, or entry-level jobs for adults who want to learn a trade or bring in some extra money for their family.
The difference now is that those jobs increasingly are supporting families, rather than supplementing the income of a better-paid breadwinner.
Since the recession, the number of households with one wage earner has climbed almost 6 percent, according to the U.S. Census. At the same time, the median income of households with one wage earner has fallen almost 4 percent.
So as more families have become reliant on one income, the value of that income has dropped.
“Their lives are more precarious,” said Randy Albelda, an economics professor at the University of Massachusetts, Boston, who has studied the expansion of low-wage jobs. “When a large number of people supporting families can’t do it, then you have a problem.”
The trend toward more low-wage breadwinners has helped fuel the national debate over raising the minimum wage, which is $7.95 in Ohio and $7.25 in Indiana, Kentucky and other states tied to the federal minimum wage.
Albelda’s latest research found that as many as 20 million people, about half the low-wage workers in America, are household breadwinners. She defined low-wage breadwinners as primary earners who make less than $11 an hour, or about $23,000 a year.
She estimated that between 10 and 14 percent of adult workers now earn a low wage and rely on those earnings to support a household, the biggest share since at least the 1980s.
The instability of low-wage jobs often creates as many problems as the low pay, Albelda said. Benefits typically are minimal, or non-existent, and layoffs or reduced hours are common as employers try to shave costs.
That’s certainly been Smith’s experience. She once worked full eight-hour days, but those hours have been cut to less than five since the recession.
If she misses work because of illness, as she did a few weeks ago, she doesn’t get paid. If her car breaks down, as it did last month, she’s dependent on the bus.
Smith, 43, has considered looking for a job with more hours, but after eight years with the same company, she fears starting over elsewhere will leave her more vulnerable to layoffs. She’s also thinking about taking on a second job, something she’s done in the past.
“A lot of janitors I know work two or three jobs. I’ve been there, done that,” Smith said. “We should be able to work one job, a respectable job, to live.”
Smith doesn’t receive food stamps or other public assistance, and she moved out of public housing and in with a friend because she felt the neighborhood was getting too rough for her 14-year-old son. Her daughter lives on her own, but her other sons, ages 20 and 18, still live at home.
Smith pays utilities and groceries; her friend pays the rent. She’s the only one in her household with a steady job and knows her family can’t survive on her income forever, especially if her hours get cut again.
“I may end up having to sleep in a car, and I don’t want to do that,” she said.
Competition greater for low-paying jobs
Smith, who has a high school diploma, is in some ways a typical low-wage worker. According to Albelda’s study, more than 54 percent are women, 43 percent are minorities and more than 90 percent don’t have a college degree.
During the recession, however, more educated workers slipped into the ranks of low-wage earners, which created problems not only for them, but for the less-educated workers they sometimes displaced.
“It’s a bit more competitive now,” said Chris Janson, Cincinnati metro market manager for the Robert Half staffing agency. “We’ve got folks willing to take less than they’re worth. They’re willing to do it for a limited time, until something better comes along.”
Janson said starting pay for some of those temporary jobs is between $10 and $15 an hour, although he said salaries are beginning to creep up and more options are becoming available to workers as the economy improves.
How much it will improve – and how long it will take wages to reach pre-recession levels – is a question economists have been wrestling with for years. Some fear lower pay and fewer benefits will become the new normal, because the labor pool is large and companies have learned to get by with less.
“This recession was an opportunity for a lot of employers to clear out a lot of people,” Albelda said. “It’s workers on demand now. In industry, they call it just-in-time inventory. So this is just-in-time workers.”
Growing uncertainty in the job market means households would be better off with a second wage earner, regardless of how much the primary wage earner is making. The Economic Mobility Project of the Pew Charitable Trusts has found that many families now require at least two incomes to match or exceed the household income of the previous generation.
“Mobility is increasingly a family enterprise,” said Diana Elliott, a research officer at Pew. “Families need those second earners’ money to move them up the income ladder.”
The impact of more low-wage breadwinners isn’t limited to the breadwinners’ families. If paychecks cover little more than rent, utilities and groceries, the broader economy doesn’t benefit much.
“People have to make a lot of very tough choices,” said Leslie Mendoza Kamstra, spokeswoman for the Service Employees International Union Local 1, which represents janitors, such as Smith, and security officers. “It’s not a high school kid. It’s someone supporting a family.”
Low-paying jobs have been part of Smith’s life since she started working more than 25 years ago. There was a time, she said, when those jobs were more plentiful, the hours were more reliable and the pay was better.
Today, Smith said, that stability is gone. Finding a new job, or a second job, may be the only way she can continue to support her family.
But she said that’s no easy task, either.
“It’s hard to find one job,” she said. “There’s so many people out here looking.” ■
More households survive on one (shrinking) income
Households with one wage earner in 2007: 43.3 million
Households with one wage earner in 2012: 45.8 million
Percent change since 2007: +5.8 percent
Median income of households with one wage earner in 2007: $45,082
Median income of households with one wage earner in 2012: $43,335
Percent change since 2007: –3.9 percent
Source: U.S. Census
Low-paying jobs rebound faster from recession
Share of job losses in recession
Low-wage jobs – 21 percent
Mid-wage jobs – 60 percent
High-wage jobs – 19 percent
Share of job gains in recovery
Low-wage jobs – 58 percent
Mid-wage jobs – 22 percent
High-wage jobs – 20 percent
Definitions: Low-wage jobs are defined as median hourly wages of $7.69 to $13.83, mid-wage jobs are $13.84 to $21.13, and high-wage jobs are $21.14 to $54.55.
Source: National Employment Law Project analysis of U.S. Census data
What is the minimum wage?
Ohio: $7.95 for non-tipped employees; $3.98 for tipped employees
Kentucky: $7.25 for non-tipped employees; $2.13 for tipped employees
Indiana: $7.25 for non-tipped employees; $2.13 for tipped employees
Federal: $7.25 for non-tipped employees; $2.13 for tipped employees
Source: U.S. Department of Labor