American Cities Where Wages Are Plummeting

flintThe average U.S. worker was paid $1,000 per week as of the fourth quarter of 2012. This is, according to the Bureau of Labor Statistics, a 4.7% increase from 2011.

In the vast majority of U.S. metropolitan areas, wages grew. In San Francisco, for one, the average wage grew by nearly 25%. In other cities, however, wages continued to fall. Eight cities had a decline of at least 1% weekly wages. In the Anniston-Oxford, Alabama area, wages fell by 2.4%. Based on the BLS’ quarterly census of employment and wages, these are the cities with the biggest declines in pay.

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One common criticism of the recovery is that even as unemployment has declined nationally, wage inequality has risen. According to a report by the National Employment Law Project, the increase in inequality is because many people who were unemployed during the recession have accepted lower-skill and lower-pay jobs than the ones they previously had in order to make ends meet.

One reason wages are falling in these cities may be that they are still experiencing the effects of continued high unemployment. While the U.S. unemployment had dropped to 7.8% by December 2012, it was much higher in the majority of these metro areas. In six of the 10 cities, the rate was at least 9%. In four of these metro areas, the rate was over 11%.

Several cities on this list had significant increases in the lower-paying leisure and hospitality industry. In Rocky Mount, North Carolina, leisure and hospitality was the only the job sector that grew between December 2011 and December 2012.

Two of these areas — Ocean City and Atlantic City — were hit hard by the hurricane. BLS chief regional economist Martin Kohli explained that businesses in a variety of sectors shut down for several weeks in November. Because the hourly weekly wage is affected by how many hours people worked in a week, he noted that the hurricane might explain a short-term-decline in average wage.

At the same time, these cities are losing jobs in typically higher-paying industries. In many of the metro areas with declining wages the number of people employed in professional and business occupations, for example, also fell. In the Kennewick-Richland-Pasco, Washington, metro area, the number of people employed in professional and business services fell by 7.9% between the end of 2011 and the end of 2012.

Many of these metro areas may also have a declining average wage because government programs are ending. For example, at the end of 2012 Kennewick lost many of the jobs created during the 2009 federal stimulus package.

Based on the BLS’ quarterly census of employment and wages, 24/7 Wall St. reviewed the 10 metropolitan areas with the biggest declines in average weekly wages between the fourth quarter of 2011 and the fourth quarter of 2012. 24/7 Wall St. also reviewed changes in employment by job sector and unemployment rates, both from the BLS, between December 2011 and December 2012.

These are the cities where wages are plummeting.

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