US adds 227,000 jobs. But are they well-paid?

The US economy is creating more jobs at slightly higher pay. But the averages can be deceiving.

Damian Dovarganes/AP
In this photo taken Tuesday, a UPS worker loads packages in Los Angeles. US employers added 227,000 jobs in February to complete three of the best months of hiring since the recession began.

America's job engine is starting to crank up speed. For the third month in a row, the United States has produced more than 200,000 new jobs per month. At this slow but steady pace, the economy will recover all the jobs it lost during the Great Recession by December 2013.

But are they good-paying jobs?

Take a snapshot of the economy, and the trends don't look bad. In February, employment grew by 227,000, helped by growth in almost every sector: from low-paying to high-paying positions, the Department of Labor reported Friday. And wages trended up 0.1 percent between January and February.


Private employment companies echo the view.

"The news is solid," says Jim John, chief operating officer of, a career networking website based in King of Prussia, Pa., that brings together employers and job seekers. "Our sweet spot [of jobs posted] is between $55,000 and $85,000 in salary. And we're seeing jobs posted in a very nice distribution across that spread."

The larger picture, however, is more sobering. The share of income going to labor instead of capital is at or near 60-year lows. Almost all the income gains since the recovery has gone to the top 1 percent of earners, according to a new report by Emmanuel Saez, an economist at the University of California at Berkeley.

A continued recovery should help alleviate the first trend, but not push labor's share of income back near previous highs. "The modest pickup so far is because the upswing has only just started," writes Paul Ashworth, chief US economist with Capital Economics in Toronto, in an e-mail. "We’ll get a modest cyclical rebound, but globalization and technological advances are still driving a strong downward structural trend."

Employment growth may have even less impact on the second trend – the income gains of the top 1 percent. It's tempting to see this as the rich getting richer and the poor getting poorer, but the picture is more nuanced than that.

For one thing, the top 1 percent took the biggest hit of any group during the Great Recession, according to Mr. Saez' report. Their real income fell by 36.3 percent compared with everyone else, who saw income fall an average 11.6 percent. The main reason: the stock market's crash, which caused a dramatic fall in realized capital gains for the rich. Since then, however, the top 1 percent have begun to recover.

In 2010, their income grew 11.6 percent; everyone else's rose 0.2 percent – a trend that probably continued in 2011, the report says. "Based on the US historical record, falls in income concentration due to economic downturns are temporary unless drastic regulation and tax policy changes are implemented and prevent income concentration from bouncing back."

That happened during the Great Depression; it hasn't happened this time.

Not all the rich have benefited evenly. While the shares of the top 1 percent and the top 2 to 5 percent have climbed since the late 1970s, the share of the 6 to 10 percent group (earning from $108,000 to $150,000 in 2010) has not moved up much at all.

While other lower-paid jobs are snapping back, "we're not seeing the six figure jobs or that 20-year veteran [middle manager] coming back," says Mr. John. "This recession has lasted a lot longer than anyone had predicted. [It] has sensitized companies to the fact that you're going to need to continue managing your expenses incredibly carefully." 

So the ranks of the near-rich are not poised to grow as fast as they once did.

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