THIN IN THE MIDDLE
Metro Atlanta has lagged many other U.S. metros in job growth in mid-wage occupations. Here’s a sampling of growth rates from 2010 through 2014.
Atlanta, .2 percent
Charlotte, 6.0 percent
Chicago, -.6 percent
Dallas, 7.9 percent
Houston, 9.4 percent
Minneapolis, 5.5 percent
U.S., 2.0 percent
Source: Atlanta Regional Commission
Mike Carnathan, who runs the research division of the Atlanta Regional Commission, recently crunched wage data across the 29-county metro area.
What he found was worrisome.
“The only category where wages are growing are high-wage occupations,” Carnathan said. “Wages are declining in low-wage occupations. And it’s an absolute blood bath in middle-wage occupations.”
Metro Atlanta, he added, does significantly worse than peer cities, such as Charlotte and Dallas, when it comes to wage stagnation for the region’s core middle class workers.
A metro Atlanta worker earned, on average, $57,168 in 2014, nearly ten grand better than the U.S. average of $47,230, according to the Bureau of Labor Statistics.
But the trend within that number isn’t encouraging.
Between 2010 and 2014, according to the ARC, earnings were flat for middle-income workers. In fact, they declined in current dollars by $70 over that time period.
Part of the problem is that Atlanta isn’t creating enough middle-income jobs — administrators, construction workers, cops, librarians, maintenance men and teachers — to fuel competition for workers and boost higher wages.
High-wage jobs, including doctors, architects and lawyers, grew 11.2 percent between 2010 and 2014. Low-wage jobs – burger flippers and home health workers – increased 14.9 percent, the ARC reports.
Middle-wage jobs rose a measly .2 percent.
‘It elevates poverty’
“This stagnation is hurting our overall growth as people are not able to spend sufficiently. It elevates poverty and hurts our upward mobility,” said Larry Mishel, president of the liberal-leaning Economic Policy Institute in Washington.
“Between the high unemployment we’ve had until recently and the falling or stagnant wages, it puts a tremendous squeeze on families’ ability to get by.”
By contrast, middle-wage jobs in Charlotte grew 6 percent between 2010 and 2014. In Dallas-Fort Worth they rose 7.9 percent.
“We are struggling to create an economy that works for everybody,” Carnathan said. “If you’re seeing people who are working hard and still falling behind, that’s a problem we need to address.”
Middle-class wage stagnation has many causes: Globalization, which shipped decent-paying manufacturing jobs overseas. Minimum wages that rarely rise. The decline of wage-bargaining unions. Government policies that curtail overtime pay. Anxious workers unwilling to seek higher wages.
“Wage stagnation is the premier economic challenge of our time,” said Mishel. “And it’s a good way to understand what’s making Americans feel so ornery.”
That’s been evident in a political season charged with anger and economic insecurity, as many people struggle to hold on to what they’ve got and many are prevented from getting what they once thought they would have.
One obvious mismatch of reality and hope has been in home ownership.
Housing dreams dashed
During the housing boom, virtually anyone with an income could get a mortgage and own a home, said John Hunt, president of ViaSearch, a Marietta-based real estate research and consulting company, speaking at a recent conference.
“Ten years ago, if you had a 520 credit score and you just got out of San Quentin, we’d put you in a house. With cash back.”
During the choppy housing recovery since the bubble burst, the pendulum has swung to the other side.
People of modest means have been squeezed from many directions: limited choices, higher prices, more hoops to jump through and not enough money as prices rose faster than incomes.
First, the pool of affordable homes was drained as commercial buyers bought thousands of homes in metro Atlanta.
“They went to the banks and the banks were happy to get rid of them,” said Eugene James, regional director of Metrostudy, a research and consulting company. “I don’t think we’ve ever seen anything like that.”
Most have been rented out and few resold.
So the market came out of the recession with record lows in the number of homes for sale, he said. “That has helped drive up home prices.”
New construction has resumed, but mostly in the higher price brackets.
That’s natural enough, said Douglas Duncan, chief economist for Fannie Mae, speaking at a recent conference of the Economic Forecasting Center at Georgia State. Higher-price homes are where builders saw the demand.
“The incomes at the middle and high end have been appreciating much faster than those at the low end,” he said. “So it’s reasonable for builders to build at the higher levels…”
In the past four years, the average sale of a single family home in Georgia went from $162,220 to $247,000, according to developer Frank Norton, president of the Norton Agency.
“Affordable housing is evaporating across the entire state,” he said.
Compounding the squeeze, lenders remain cautious in a state that was riddled with small bank failures stemming from the real estate bust.
The upshot, according to Norman: “There is a shortage of workforce housing. Affordable housing is a teacher married to a teacher and buying a house. It’s a fireman married to a clerical worker and buying a house.”
Or renting a townhouse a long way from work.
Jason Newman of Norcross works in a Brookhaven restaurant. He likes the job. But he laughed at the idea of living anywhere nearby.
“Nobody I know at the restaurant lives anywhere in the area,” he said.
The area around the restaurant has some nice condos. But owners pay monthly mortgages of $1,200 or more, he said.
Newman and his family live in a $740-a-month town home.
Working closer to home is also also a non-starter, he said.
“Where I am living, anything close by really doesn’t pay anything more than $9 an hour. As you get closer to the city of Atlanta, the pay rate goes up.”