For many, paychecks might never recover from the recession

BALTIMORE — Richard Siegel is not among the unemployed. Between running a charity, writing songs and doing stand-up comedy, he's got gigs aplenty.

He's just making about half of what he once did as promotions director for a comedy club.

Despite the gradually improving job market, millions of Americans are earning less. They include those who can only get part-time work, those who have landed new jobs with lower salaries than what they once earned and others simply getting smaller paychecks in the jobs they've had all along.

That affects their earning power for the rest of their working lives, a study on the similarly punishing 1982 recession suggests.

The downward pressure on wages caused by fierce job competition ripples through the economy to grocery stores, retailers and businesses getting less money from reduced-income customers.

Unlike the unemployed, now at 10 percent of the population or 15 million people, workers with diminished earning power are a poorly measured part of the labor force. The federal government doesn't track the group, only the number of Americans working part-time despite wanting full-time employment.

More than 9 million people were stuck in that situation in April, including workers whose hours had been cut because of slack business conditions. That's more than double the number from three years ago, before the recession began.

And they aren't the only workers feeling the income pinch.

Nationwide, half of employers froze pay for at least some workers last year and 13 percent made salary cuts, according to a survey by WorldatWork. The human resources association announced in January that more than one-third of the pay-freezing companies didn't have plans for raises again this year. Many of the firms that cut salaries last year also didn't expect to reverse course soon; 15 percent said the reductions would be permanent.

Losing a job during a rough economy can have a lifelong effect on earnings.

Americans who were part of mass layoffs during the 1982 recession took 30 percent pay cuts on average in the short term and never fully recovered, according to a 2009 study by researchers at Columbia University, the Social Security Administration and Congressional Budget Office. Fifteen years to 20 years later, they were making 20 percent less on average than similar workers who weren't laid off.

It's not happening to everyone, but laid-off workers are frequently accepting lower pay at new jobs or through temporary consulting positions these days, said Mitch Halbrich, a senior managing director in the Baltimore office of the Mergis Group, a staffing agency.

"Any money is better than no money," said Halbrich, who focuses on white-collar fields such as accounting, finance, information technology and human resources.

Andy Bauer, a regional economist for the Federal Reserve Bank of Richmond, isn't expecting a quick return to rising salaries, not with so many unemployed Americans looking for work.

"Once we've removed this excess supply of labor from the labor market, then you should start to see wages moving forward again," Bauer said. "It's going to take some time, unfortunately, just because we have such a large part of the labor force that's unemployed or underemployed."

Siegel has been getting by on his main part-time job — running the Funniest Celebrity Charity Fund, which raises money for nonprofits by persuading politicians, athletes and others to show off their stand-up comedy chops.

He spent months looking for a job in promotions or public relations to replace the position he lost in 2009.

Siegel brought in about $60,000 a year before his comedy club job was eliminated. The 49-year-old now is making less than $30,000 a year from his remaining part-time work.

So Siegel is switching careers, working on a master's degree in psychological counseling at the University of Baltimore, which he is paying for with student loans.

In the meantime, he's looking for another part-time job in his new field. He's confident that the change of specialties and additional education will position him for better earnings than he had before the recession.

"I know I'm going to have a future that's going to be financially rewarding, and I couldn't say that a year ago," Siegel said.