Jobs with low pay were first to be cut

Here’s a question to test your knowledge of recession-time economics. In a downturn, will high-paying jobs outnumber minimum-wage jobs, or the opposite?

That’s kind of a trick question. The answer is “both.”

Surprised? It gets even more puzzling. There’s a chance the median wage could increase, too — as it did in Washington state during the recession.

The state’s seemingly illogical job-loss pattern makes sense once a few more factors are revealed. A report released this week by the Employment Security Department reports that low-paying jobs were the first to be cut when recession hit the state’s businesses.

“As the state slid into recession in 2008, the number of minimum wage jobs declined substantially,” state economist Scott Bailey writes in the report.

But they rebounded months later, as did the state’s minimum wage in January 2009.

Washington’s minimum wage reached $8.55 per hour in 2009, the highest minimum-pay level in the country.

The report has a few key findings, including:

The percentage of jobs that paid the state’s minimum wage — or near the minimum wage — declined through 2008 as the recession took hold. That could be because low-paying jobs and part-time jobs were the first positions employers cut. Researchers say there was a similar trend during the 2001 recession.

The state’s median hourly wage was up despite the recession. Economists say that could be because job losses hit lower-wage jobs. But the number of jobs paying a higher wage — more than $50 per hour — increased.

Minimum wage jobs made a comeback during the first half of 2009. The low-paying jobs are concentrated in three areas: food services, agriculture, and retail trade.

The eastern part of the state has a higher concentration of minimum-wage jobs, largely because there are more jobs in the three industries most likely to pay low wages.

Read Amy Rolph’s small-business blog at www.heraldnet.com/TheStorefront. Contact her at 425-339-3029 or arolph@heraldnet.com.