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Letter from the Editor

March 2015 - MN Economic Trends

A Look at Wages

We've been hearing a lot lately about wages. By almost every measure, the U.S. job market has steadily improved since the recession ended nearly six years ago. Wages, though, have been the one exception, barely keeping up with inflation. Economists have struggled to explain why.

Mustapha Hammida explores wages from a slightly different angle in this issue of Trends. He looked at how wages for Minnesotans who left their jobs and found new jobs during the recession compare with the wages of people who left jobs and found new work after the recession.

Based on his research, post-recession workers had a better chance than workers during the recession of seeing gains in hourly wages when they moved to new jobs. That was especially true for low-wage workers. People who left low-paying jobs after the recession had a better than 85 percent chance of earning at least equal wages in their new jobs. For people in high-paying jobs, the odds of finding comparable wages after the recession were considerably lower at 55 percent.

The study examined a fairly narrow time frame. As more data become available, Hammida will revisit the topic to see if people who were out of work for longer periods during and after the recession had similar wage outcomes.

His story isn't the only one that touches on wages in this issue. John Clay looked at DEED's new Cost of Living tool and how it can help business owners decide how much to pay employees and help workers decide whether their pay is enough to meet basic living expenses. Our intern, Kaite DeMartelaere, examined barriers that low-wage workers face in finding and keeping employment.

Ellen Bendewald looked at a feature on DEED's job bank that enables employers to designate job openings as "veteran-friendly." Finally, Dave Senf wrote about some of the gaps in data that make it difficult to grasp the size of the freelance or "solopreneur" economy in Minnesota.

Monte Hanson

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