El Paso’s average wage has shot up, but not for good reasons
El Paso’s average weekly wage increased sharply as COVID-19 became entrenched and thousands of workers lost jobs, new federal data shows.
Normally, a spike in average wages would be cause for celebration, but that’s not the case here. El Paso’s average wage grew because thousands of service sector jobs were vaporized by the pandemic, removing them from wage calculations.
Across the country, jobs fell dramatically and average wages increased markedly between September 2019 and 2020, the Bureau of Labor Statistics reported on Wednesday.
The BLS report showed that the number of people employed in El Paso fell by about 5% between September 2019 and September 2020. That represents a net loss of more than 14,000 jobs in a year.
“Over 108,000 individuals filed for unemployment in the Borderplex region since March 2020,” said Leila Melendez, CEO of Workforce Solutions Borderplex. “The occupations most affected were food and serving related, sales, transportation, production, and office. These five occupations alone represent 45% of the unemployment claims.”
Tom Fullerton, an economics professor at the University of Texas at El Paso, said the pandemic job crisis is different from other recent recessions.
“This labor market shock was just as unexpected as the 2008 banking collapse and the 2001 dot com recessions, but caused more uncertainty because it was the first pandemic to hit the United States in 102 years and it placed the national labor force at risk,” he said.
Job loss impacts go beyond finances
The impact of losing your job during the pandemic goes well beyond the financial loss, said Tony Ramos, who worked for six years as a sales manager at a major El Paso hotel. He was initially furloughed in March, called back to work in September, then got COVID-19, and then was furloughed again in October when business didn’t pick up.
“Obviously, we’re all suffering from the financial standpoint. But I think it was more (suffering) from a perspective of a place of belonging in the world, of self identity, like who am I? What is my purpose? What am I doing?” he said.
Ramos, 60, served 22 years in the Army and receives military retirement pay. Most of his coworkers who were furloughed didn’t have other income sources.
“I think the majority of them did not have anything else to fall back on as far as additional income,” he said. “So it’s been easier for me than for most folks.”
Ramos has found part-time work doing marketing for an insurance company. He said he’s not likely to return to the hospitality industry.
“That is something that I have pondered seriously about because it’s not going to be the same. When we come back, it’s not going to be the same. And I think that the hospitality business is going to hobble along for quite a while before it comes back,” Ramos said.
El Paso wage levels still comparatively low
Although El Paso’s average weekly wage rose to $814 in September 2020 from $759 a year earlier, the county’s wage levels are still well behind state and national levels and most other major U.S. cities.
In the quarter ending in September 2020, El Paso’s average wage was 69% of the national average wage and 71% of the state average. The gap is even more pronounced with private sector wages.
Before the pandemic, about 24% of all jobs in El Paso were in the retail and hospitality sectors, according to the BLS. That compares to 21% nationally. Such jobs are often part-time and comparatively low paying.
Melendez said it’s too soon to say how many of the lost jobs will return as the economy recovers from the effects of the pandemic.
“Some jobs were able to return and be work-from-home jobs, especially in offices. But many restaurants have closed for good, at least it seems,” she said. “Sales as an occupation has been disrupted permanently, I believe. So much is done online, remotely now, that the demand for in-person sales is on a steep decline. I don’t think much of that will return.”
Fullerton provided an even longer list of jobs that may be disrupted for years or permanently. He recently published a report on his Borderplex economic predictions for 2021.
“Job categories where recoveries are likely to be incomplete for at least several years due to structural shifts include in-store retail sales positions due to e-commerce; office administrative support positions due to increased work from home; some higher education on-campus jobs due to financial support reduction and increased on-line course delivery; air travel and lodging due to reduced volumes; non-residential construction due to reduced office and retail space demands; in-person entertainment personnel due to reduced sales and exposure safety precautions,” he said.
Melendez said the pandemic highlighted structural risks in El Paso’s job base.
“When we look at our jobs in groups based on wages, most of our employment is in the lower and mid to lower wage jobs; food and sales are there,” she said in an email. “We really do need a deliberate effort to move folks into higher-skilled (thus higher-paying) jobs.”
More than 80% of El Paso unemployment claims during the pandemic have come in those lower-paying sectors, according to Workforce Solutions Borderplex data.
Declining enrollment at the University of Texas at El Paso and El Paso Community College during the pandemic also is worrisome, Melendez said.
“The longer they go without enrolling into post-secondary, the larger population we have without college and the harder the lift into high-skilled/high-wage jobs,” she said.