Jobs by Wage Level

What portion of jobs are low-, middle- and high-wage?

Jobs by Wage Level

Definition: 
Jobs by wage level refers to the distribution of jobs by low-, middle- and high-wage occupations. In the San Francisco Bay Area, low-wage occupations has a median hourly wage of less than $19; median wages for middle-wage occupations range from $19 to $29, and high-wage occupations have a median hourly wage above $29.

Strong economic growth has expanded Bay Area employment opportunities in recent years. But not everyone in our region’s workforce of 2.7 million has equal access to these opportunities. Monitoring employment in low-, middle- and high-wage occupations over time helps reveal the types of jobs being created or lost. Adding jobs in middle-wage occupations is crucial to increasing economic opportunity for our region’s low-wage workers.

Regional Performance
The Bay Area’s workforce has become more skewed towards high- and low-wage jobs over the years.

In 2015, jobs in middle-wage occupations represented less than one-fifth of our region’s employment, having declined in both relative and absolute terms since 2001. Diminishing middle-wage employment has meant increased job polarization, leaving fewer options for upward mobility for low-income workers. Many of the middle-wage jobs lost have been in occupations specific to manufacturing, which accounted for nine percent of overall jobs in 2015. Meanwhile, job numbers have been more positive for middle-wage occupations such as executive administrative assistants that spread across multiple industries.

In recent years, the majority of regional job gains have been in high-wage jobs. While the number of low-wage jobs has grown in absolute terms, the overall share has declined. Since 2001, the Bay Area has added 2.5 high-wage jobs for every low-wage job. Growth in high-wage occupations such as software developers and information system managers is a clear reflection of the tech boom. The tech sector also has supported growth in high-wage business support occupations such as accountants and human resource managers.

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Historical Trend for Share of Jobs by Wage Level

Local Focus
High-wage jobs are increasingly concentrated in Silicon Valley and San Francisco.

The change in jobs across wage levels has not been evenly spread across the Bay Area. A disproportionate share of high-wage jobs were created in Silicon Valley and San Francisco, the epicenters of recent economic growth. To a lesser extent, this trend also has been seen in the East Bay, where high-wage jobs now outnumber low-wage jobs. While each of these subregions has seen gains in high-wage technology jobs, job growth in the East Bay has been more pronounced in education and health service occupations.

Because many low-wage occupations, such as janitors or retail salespeople, are location-specific, the distribution of low-wage jobs largely has been proportionate to total employment. Yet contrary to the regional trend, the North Bay has seen its share of low-wage jobs grow. In fact, low-wage jobs account for the largest share of North Bay employment.

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Historical Trend for Share of Jobs By Wage Level by Subregion



National Comparison
Washington, New York and the Bay Area have the most uneven distribution of jobs by wage level.

In 2015, less than one-fifth of the jobs in Washington, New York and the Bay Area were in middle-wage occupations, making their share of middle-wage jobs smallest among the large metro areas. Because the Bay Area skews towards high-wage tech and business services occupations, our region has the largest share of high-wage jobs among its peers. Meanwhile, Washington and New York have a different type of skew — towards low-wage jobs.

While all peer metro areas have larger shares of low- and high-wage jobs than middle-wage jobs, Miami, Atlanta, Dallas and Houston have more even distributions of jobs by wage level. Miami and Atlanta’s large service sector workforce means its median wage is relatively low, and therefore many consumer service occupations are classified as middle-wage. In Texas metros, the oil and gas industry has created jobs in related middle-wage occupations, such as technicians and transportation operators.

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Metro Comparison for 2015 Share of Jobs by Wage Level

 
Sources: 

California Employment Development Department OES (2001-2015)

Bureau of Labor Statistics OES (2001-2015)

American Community Survey (2014-2015)

Image: iStockPhoto (#506473594)

Methodology Notes: 

Jobs are determined to be low-, middle- or high-wage based on the median hourly wage of their occupational classification in the most recent year. Low-wage jobs are those that pay below 80% of the regional median wage. Middle-wage jobs are those that pay between 80% and 120% of the regional median wage. High-wage jobs are those that pay above 120% of the regional median wage. Regional median hourly wages are estimated from the American Community Survey and are published on the Vital Signs Income indicator page. For the national context analysis, occupation wage classifications are unique to each metro area. A low-wage job in New York, for instance, may be a middle-wage job in Miami. For the Bay Area in 2015, the median hourly wage for low-wage occupations was less than $19.41 per hour. For middle-wage jobs, the median ranged from $19.41 to $29.12 per hour; and for high-wage jobs, the median wage was above $29.12 per hour.

Occupational employment and wage information comes from the Occupational Employment Statistics (OES) program. Regional and subregional data is published by the California Employment Development Department. Metro data is published by the Bureau of Labor Statistics. The OES program collects data on wage and salary workers in nonfarm establishments to produce employment and wage estimates for some 800 occupations. Data from non-incorporated self-employed persons are not collected, and are not included in these estimates. Wage estimates represent a three-year rolling average.

Due to changes in reporting during the analysis period, subregion data from the EDD OES have been aggregated to produce geographies that can be compared over time. West Bay is San Mateo, San Francisco, and Marin counties. North Bay is Sonoma, Solano and Napa counties. East Bay is Alameda and Contra Costa counties. South Bay is Santa Clara County from 2001-2004 and Santa Clara and San Benito counties from 2005-2015.

Due to changes in occupation classifications during the analysis period, all occupations have been reassigned to 2010 SOC codes. For pre-2009 reporting years, all employment in occupations that were split into two or more 2010 SOC occupations are assigned to the first 2010 SOC occupation listed in the crosswalk table provided by the Census Bureau. This method assumes these occupations always fall in the same wage category, and sensitivity analysis of this reassignment method shows this is true in most cases.

In order to use OES data for time series analysis, several steps were taken to handle missing wage or employment data. For some occupations, such as airline pilots and flight attendants, no wage information was provided and these were removed from the analysis. Other occupations did not record a median hourly wage (mostly due to irregular work hours) but did record an annual average wage. Nearly all these occupations were in education (i.e. teachers). In this case, a 2080 hour-work year was assumed and [annual average wage/2080] was used as a proxy for median income. Most of these occupations were classified as high-wage, thus dispelling concern of underestimating a median wage for a teaching occupation that requires less than 2080 hours of work a year (equivalent to 12 months fulltime). Finally, the OES has missing employment data for occupations across the time series. To make the employment data comparable between years, gaps in employment data for occupations are ‘filled-in’ using linear interpolation if there are at least two years of employment data found in OES. Occupations with less than two years of employment data were dropped from the analysis. Over 80% of interpolated cells represent missing employment data for just one year in the time series. While this interpolating technique may impact year-over-year comparisons, the long-term trends represented in the analysis generally are accurate.