The American labor market is becoming increasingly polarized between skilled, well-paid workers and low-skilled, low-wage workers, according to a new paper by MIT Economics professor, David Autor.
Employment and earnings in "middle-skill" and "middle-wage" jobs like sales, administrative and labor positions have been declining since the 1980s, suggests the paper, which was jointly released by the Center For American Progress and the Hamilton Project. At the same time, opportunities in both high-skill, high-wage occupations and low-skill, low-wage occupations are expanding. The result has been a sharp rise in the inequality of wages over the past few decades -- and an increasingly bifurcated labor force.
Fueled by technological advancements and outsourcing, companies are becoming more capable of automating "routine tasks" that were formerly performed by middle-skill, middle-wage workers or workers with a moderate education, which Autor defines as a high-school diploma but less than a four-year college degree.
The study finds:
"The central tasks performed by these [middle-skill] occupations - organizing, filing, retrieving and manipulating information - are dramatically more prevalent in 2010 than they were in 1970. But these tasks are now largely being handled by machines...they are increasingly codified in computer software and performed by machines, or alternatively, sent electronically to foreign worksites. Thus, the substantial declines in clerical and administrative occupations are almost certainly a direct consequence of the falling price of machine substitutes for these tasks."
Conversely, there is - and has been for the past few decades - a rising demand for "nonroutine tasks" performed by either high-skill workers or low-skill workers.
These nonroutine tasks can be roughly subdivided into two categories: abstract tasks and manual tasks. Abstract tasks, which require "problem solving, intuition, and persuasion," are usually performed in professional, managerial, and technical occupations. Manual tasks, "which require situational adaptability, visual and language recognition, and in-person interactions," are usually performed by low-skill food service, personal care and protective service occupations.
The increased demand for tasks most commonly assigned to high-skill or low-skill workers, coupled with the fact that employment losses during the recession were far more severe in middle-skilled jobs than in either high-skill jobs or in low-skill service occupations, have, according to the study, drastically reduced middle-skill opportunities.
For further evidence, the study points to forecasts by the Bureau of Labor Statistics:
"They forecast that employment in service occupations will increase by 4.1 million, or 14 percent, between 2008 and 2018. The only major occupational category with greater projected growth is professional occupations, which are predicted to add 5.2 millions jobs, or 17 percent."
The polarized structure of job opportunities in the United States is, according to the study, primarily a result of improvements in technology and offshoring of jobs, but may also have been exacerbated by the easing of international trade restrictions, de-unionization and a falling minimum wage.
As for a solution, the study points to the growing value of higher-education ("The earnings of college-educated workers relative to high school-educated workers have risen steadily for almost three decades.") To stabilize the secular shifts in labor demand that are inevitable as technology advances and labor markets integrate, government must encourage more young adults to obtain higher education.
Read the full study HERE:
Polarization of Jobs