The market forces behind the fall of sectors that used to earn above-average pay.
Changes in the labor market have upended myriad jobs that used to pay well, dragging down wages and leaving millions of American workers feeling misled and frustrated.
To illustrate this dynamic, The Washington Post isolated five industries that provided an above-average weekly paycheck in the 1990s but now pay less than an average wage.
These downgraded jobs have one thing in common: They don’t require a college degree. The share of workers with only a high school education is rising in all five jobs, according to labor analytics firm Burning Glass Technologies.
The careers used to provide less-educated workers an avenue to the middle class, but not anymore. And the well-paying jobs of today are often in fields such as health care and finance, which require additional education and training.
Although these five job categories pay significantly less than they did in the 1990s, most have expanded hiring. They have also reduced union participation. Here’s a deeper look at the forces that brought them down.
Warehousing and distribution
Employment at warehouses has soared, rising from 515,000 in 2000 to 1,032,000 today. Warehouses have become critical links in the online retail and global supply chains that ship items from all over the globe to offices and homes. Yet annual pay for warehouse workers (excluding managers) has fallen from a peak of about $42,500 in 2000 to about $38,000 now, adjusted for inflation.
Diane Swonk, chief economist at professional services network Grant Thornton, says it’s the result of a highly paid industrial sector transforming into a business dominated by lower-paying retail firms. The large decline in union jobs and rise of temporary workers have also lowered pay. Companies see workers as easy to replace, she says, so there is little reason to raise pay to keep them around.
Motion picture and sound recording
Online piracy laid waste to the music industry. It can be blamed for most of the revenue lost during the era we examined, according to a 2017 Journal of Economic Perspectives paper from University of Minnesota economist Joel Waldfogel, author of “Digital Renaissance: What Data and Economics Tell Us about the Future of Popular Culture.”
But there’s another, less apocalyptic reason the digital revolution has slashed music and movie wages.
Digitization made music and movies far cheaper to produce, distribute and promote, Waldfogel writes. It broke the stranglehold of movie studios and music labels, which were once the only institutions that could afford the $1 million cost of bringing an album to market in 2010 or the $106 million it cost to produce a major film in 2007.
At the same time, employment in the music and motion-picture industries has expanded. The new jobs pay less than when gatekeepers ruled the Earth, despite the industry producing an ever-increasing number of well-reviewed movies and albums.
Repair and maintenance
Of all repair workers, those who fix, install and maintain refrigerators, chain saws, televisions and assorted household goods have seen their wages fall fastest.
The internet is a likely culprit. The Wall Street Journal reported in 2015 that repair workers were being squeezed by frugal customers and the rise of a YouTube-enabled “do-it-yourself” repair ethic. The trend appears to be continuing: Home Depot’s latest earnings hit an all-time high.
And when they can’t fix it themselves, they’re more likely to simply buy one of today’s relatively cheap new appliances rather than call the repair shop. Appliance prices have fallen 21 percent since 1992, Commerce Department figures show.
Vehicle and parts dealers
The auto industry, long a bedrock of middle-class U.S. jobs, has been hit by two distinct forces: foreign competition and the internet, which dragged down pay across the industry.
Companies such as Advance Auto Parts have struggled to keep up with the low prices and convenience of online retailers like Amazon.com. Prices for car parts have fallen since the end of 2014, according to government data.
The rise and fall of sawyers and other wood-product factory workers tracks closely to the U.S. housing bubble and subsequent mortgage crisis.
Lumber mills bled jobs and slashed paychecks as the housing market collapsed. Wages are now beginning to recover, but there are far fewer woodworkers around to earn them.
U.S. lumber-related industries have been hammered by the cheap Chinese imports that flooded into the United States from 1990 to 2007. Wood products and furniture were at the epicenter of the shock, suffering more than almost any other industries, according to MIT economist David Autor and his collaborators.