New study: Low-wage workers in Chicago are older, more educated

September 26, 2012

Quinn Ford

Low-wage workers in Chicago are older and more educated than they were a decade ago.

That’s according to a study released Wednesday by Women Employed and the Action Now Institute, two Chicago-based non-profits.

Using data from the U.S. Bureau of Labor Statistics and Bureau of Census, the study found the low-wage workforce accounted for about a quarter of all Chicagoland workers in 2001, but as of 2011, that portion is closer to a third of all workers.

The study also found the number of low-wage workers who have a college degree increased over the past decade, from 9.7 percent in 2001 to 16.2 percent in 2011.

Marc Doussard, an assistant professor of Urban and Regional Planning at the University of Illinois at Urbana-Champaign, authored the study.

He said the Chicagoland metropolitan area lost more than 150,000 jobs between 2001 and 2011, and that has led to highly educated workers settling for lower paying jobs.

“As the total number of jobs shrinks, you have more people chasing fewer jobs, and increasingly people who play by all the rules and do everything right, nonetheless end up as low-wage workers,” Doussard said

Doussard added that has led some lower-educated workers to drop out of the workforce altogether.

The report defines low-wage earners as those making $12 an hour or less and does not include workers who are self-employed.

Doussard noted the study strikes down the idea most low-wage workers are teenagers working for disposable income. He said 94 percent of those earning $12 an hour or less are 20 years or older and the wages are their primary source of income.

“Increasingly, low-wage workers are in households that depend on low-wage work for their income,” Doussard said.

Doussard added the numbers reflect a longer trend and not just the effects of the Great Recession. He said the “2000s boom”—what he described as the business cycle lasting from 2001 to 2007—was also marked by weak job growth, deunionization and an erosion of the value of the minimum wage.

As a result, Doussard said more people who fit the profile of “middle class” are settling for low-wage jobs.

“This is, I think, a disturbing reminder that an increasing amount of the population does everything right but doesn’t get the material rewards we expect from work, and that’s a problem,” Doussard said.