Publications

California Employment by Income

March 3, 2016

Despite having the third highest rate of low-wage job creation in the nation, California could face a shortage of low-wage workers as housing costs push residents out in search of affordability. According to a trio of new studies, low- and middle-wage workers are leaving California even as large numbers of higher-wage earners continue to arrive. And all together, more people are moving out than moving in.

The report finds that many new jobs in California are in low-wage industries, and the post-recession period favored low-wage job growth over middle-wage and high-wage job growth throughout the state by a wide margin. However, when compared with the rest of the nation, the trend of low-wage job creation is not unique to California. Other large population states, such as Texas and Florida, also rank among the top ten in low-wage job growth during the post recession period. California has also been leading the nation in both middle-wage and high-wage job creation in the post-recession recovery, as California is home to numerous high-wage industries that are leading the country in high-wage job creation. Additionally, compensation in high-wage and middle-wage industries in California is growing faster than in the nation overall.

Given California's role as a leader in both tourism and technology, the state should expect to continue creating a mix of high-, middle- and low-wage jobs as businesses invest, construction picks up, consumers increase spending, and tourists continue to travel.

The report's main findings include:

  • Low-wage jobs are concentrated in a small number of high-level industries, such as Leisure and Hospitality, Retail, Healthcare, and Agriculture. High-wage employment, on the other hand, is represented by a larger variety of smaller industries.
  • Over the years, the share of employment in low-wage industries has risen in California and in the nation overall.
  • Low-wage job growth in California during the post-recession period ranked 3rd highest in the nation. However, California was not the only large state to rank high in low-wage job growth: Florida and Texas were also in the top 5.
  • California is home to some of the leading high-wage industries in the nation, including the Professional and Technical Services industry. California ranked 11th highest amongst all states in terms of post-recession job growth in this sector. Additionally, compensation in high-wage industries in California is growing faster than the nation overall.
  • California ranked 11th in terms of job growth in middle-wage industries from the 4th quarter of 2009 to the 4th quarter of 2014.

More information on California's employment by income compared to other states available at Compare50.org.