Employment Disparity between the Higher and Lower Income Groups in the U.S.

A study on unemployment rates for different income brackets was recently released by Northeastern University’s Center for Labor Market Studies.

http://www.clms.neu.edu/publication/documents/Labor_Underutilization_Problems_of_U.pdf

The study points out that the poor are suffering from depression level unemployment.

Boeing CEO Jim McNerney also mentioned this study in his speech entitled “Maintaining a Competitive Edge in Today’s Global Economy” at Northwestern University.

From his speech:

The Center analyzed the labor conditions faced by income-grouped U.S. households during the fourth quarter of 2009.

In the face of one of the worst economic environments in memory, those in the highest income groups had nearly full employment levels, with just a 3.2 percent unemployment rate for households with over $150,000 in income and a 4 percent rate in the next-highest income group of $100,000-plus.

The two lowest-income groups — under $12,500 and under $20,000 annually — faced unemployment rates of 30.8 percent and 19.1 percent, respectively.

http://www.boeing.com/news/speeches/2010/mcnerney_100219.html

It seems to be obvious that people in lower income brackets are faring much worse than the higher end of the spectrum in this downturn.

One thing to keep in mind is that in the U.S. labor-based manufacturing industries have been replaced by service sectors to a considerable extent. This may be one of the reasons behind unemployment disparity between the two groups. Why and how has industry shift happened? The underlying problems go much deeper than what it may appear to be.