Middle-income jobs have been on the decline in the United States over the past few decades. This is not just an observation that people have noticed — data from the Federal Reserve shows that the percentage of jobs in the U.S. classified as middle wage has dropped from 25 percent in 1985 to approximately 15 percent today.
This has important implications not only for individuals but for the economy as a whole. When fewer middle-wage jobs are available, it means that there is less upward mobility because there are less jobs that can act as segues or stepping stones between low- and high-wage positions. In addition, middle-wage jobs go hand in hand with higher income inequality, as the percentages lost by these jobs have been gained in low- or high-wage positions.
Despite middle-wage positions enduring cuts from the financial crisis as well as outsourcing, there are still many such jobs available across the country. In fact, a recent trend has been the recreation of jobs in that wage category, many of which require some amount of training or skill and are bolstered by the presence of strong labor unions. However, there is a lot of regional variance in the creation rate of middle-wage jobs; overall, around a quarter of new positions being created are considered middle wage, but the number drops below 15 percent in states like New York, and down to 10 percent in Mississippi.
One question for economists is how middle-wage positions are defined. While some studies look at the education or experience required to obtain a job, most studies look at the actual hourly wage of a position, with jobs that pay between $13.84 and $21.13 classified as middle wage for the purposes of a recent study undertaken by EMSI, an Idaho-based economics firm.
Using EMSI’s numbers, let’s take a look at the five states that are proportionally making the most new middle-wage positions.
The first stop on our list is Arizona, where 34 percent of new jobs created in the last three years are considered middle wage. With more than 150,000 jobs created since 2010, that translates to over 50,000 positions created in the category. This is certainly good news for a state that has been dogged by high unemployment levels that have persisted at ratios above the national average, though they have been on the decline.
Next up, we travel to Michigan, where 35 percent of new positions in the last three years pay a middle wage. Michigan has seen a recent resurgence of sorts in its economy, despite having one of the worst economies in the country during the early parts of the millennium. The strength of unions in the state has contributed somewhat to the rise of middle-wage positions, as has the revitalization of some parts of the auto industry. Still, with Detroit’s bankruptcy not set to bring good tidings to that metro area, there is much work to be done before the state is once again healthy.
3. North Dakota
Staying in the Midwest, we travel to North Dakota, a state in which 36 percent of new jobs created since 2010 are considered middle wage. The Dakotas have seen a significant boost to their economies with the upsurge of the oil industry in America, profiting not only from the actual production of energy sources but also from the transportation of the commodity. With one of the lowest unemployment rates in the country, North Dakota’s job creation has driven wages higher because workers are in demand, one explanation for the rising wage rates.
Another Midwestern state in which 35 percent of new positions in the last three years have been middle wage is Iowa. This Corn Belt state has profited from the rise in prices in the agriculture sector, which has in turn translated to higher wages for workers in the industry. It’s certainly not a bad deal for those living in the state — places like Iowa and North Dakota present perfect opportunities for those looking for work that pays above minimum wage but does not require an extensive educational background.
The top spot on our list goes to Wyoming, where 45 percent of new positions created during the last three years are classified as middle wage. This is quite an achievement, considering that the rate is nearly double the national average. However, one thing to keep in mind is that a high number of middle-wage positions can represent not only a lack of low-wage job creation but also of high-wage job creation, as well. Take Wyoming’s percentage with a grain of salt — it may just be that having too many middle-wage jobs could turn out to be just as problematic as having too few.