Labor Force Polarized as Middle-Skill Jobs Disappear: Report

MarketWatch

Middle-skills jobs have lost share in the employment pool in the last three decades, a trend of labor-market "polarization" reinforced by the recession, according to a report released Friday.

"Employment losses during the recent recession were far more severe in middle-skill white- and blue-collar jobs than in either high-skill, white-collar jobs or in low-skill service occupations," according to the report by economist David Autor of the Massachusetts Institute of Technology that was presented at a Washington conference about the future of American Jobs.

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The four middle-skill occupations -- sales, office and administrative workers, production workers and operators -- accounted for 57.3% employment in 1979. That portion fell to 48.6% in 2007, and declined to 45.7% in 2009, according to the report.

Male workers have been particularly hard hit, as their educational attainment has slowed and labor force participation declined, according to Autor.

"Perhaps most alarmingly, males as a group have adapted comparatively poorly to the changing labor market," Autor wrote. "For males without a four-year college degree, wages have stagnated or fallen over three decades. And as these males have moved out of middle-skill blue-collar jobs, they have generally moved downward in the occupational skill and earnings distribution."

The employment and earnings of less-educated males have been particularly harmed by fewer middle-skill, blue-collar jobs in manufacturing, according to the report.

"The job opportunities available to males displaced from manufacturing jobs, particularly those displaced at midcareer, are likely to be primarily found in lower-paying service occupations," Autor wrote.

Why have middle-skilled jobs declined? Changes in technology, international trade, and the off-shoring of jobs all play a part.

The report also noted a historic high for the return to skills. In 2009 the hourly wage of the typical college graduate was 1.95 times the hourly wage of the typical high school graduate, up from 1.5 times in 1963. All of the gain took place after 1980.

"This simple comparison of the wage gap between college and high school graduates probably understates significantly the real growth in compensation for college graduates relative to high school graduates in recent decades," according to the report. "College graduates work more hours per week and more weeks per year than high school graduates, spend less time unemployed, and receive a disproportionate share of nonwage fringe benefits, including sick and vacation pay, employer-paid health insurance, pension contributions, and safe and pleasant working conditions."

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