Americans at the top and bottom of the income scale are benefiting most from the jobs recovery while those in the middle are getting left behind.
Employees making above-average wages, like doctors and energy-industry workers, and those at the other extreme, including home-health aides and restaurant staff, have seen outsized gains in hiring since the jobs recovery began in February 2010, say economists at Wells Fargo & Co. and JPMorgan Chase & Co. Professions in the middle, such as financial services and specialty construction, aren’t faring as well.
Such a shortfall helps explain why income gains have yet to return to levels seen before the recession began and why consumer spending over the past two years has grown at the slowest pace of any expansion in the post-Second World War era. It also points to a pool of unemployed Americans that will prevent wage increases from flaring out of control and fuelling inflation as the economy grows.
“If we’re only creating jobs for the highly skilled and for folks with basic skills, then you’re leaving an awful lot of people behind,” said Mark Vitner, a senior economist at Wells Fargo in Charlotte, North Carolina. “Until we have broad-based growth, it’s hard to imagine how we can have a self-sustaining economic recovery.”
Shares climbed Wednesday after Alcoa Inc., the first company in the Dow Jones Industrial Average to report quarterly earnings, said it made a profit in the first three months of the year. The Standard & Poor’s 500 Index rose 0.8% to 1,370.03 at 9:51 a.m. in New York, snapping a five-day slump…