Labor Market Trends and Outcomes: What Has Changed Since the Great Recession?
We describe trends in wages and labor force participation for the “working class” – whom we define as workers with high school or less education – compared to those with college or more. We compare cyclical peaks over the entire period 1979-2019, with particular focus on the Great Recession (2007-2010) and recovery (2010-2019). We also present results by gender and race. We find real wage growth in the latter period for all workers, but not enough to change the long-term trends of growing inequality and stagnant wages for the less-educated; and we also find that labor force participation continued to decline for the less-educated, even during the recovery. Gaps between whites and blacks also grew while Hispanics and Asians made more progress. We consider various explanations of these findings, and show that the early effects of the 2020-21 pandemic recession that hurt less-educated workers and those of color more than anyone else.
Co-author: Erica Groshen
Harry J. Holzer is the John LaFarge Jr. SJ Professor of Public Policy at Georgetown University' McCourt School of Public Policy, a Nonresident Senior Fellow at Brookings, and an Institute Fellow at the American Institute for Research in Washington DC. He is a former Chief Economist for the U.S. Department of Labor and a former Professor of Economics at Michigan State University. He was a founding faculty director of the Georgetown Center on Poverty and Inequality. He is a research fellow at IZA (The Institute for Labor Economics). He is also an affiliate of the Institute for Research on Poverty at the University of Wisconsin-Madison, and of the Stanford Institute on Poverty and Inequality.