The Shape of Jobs to Come…

From the point of view of an individual job seeker, the job market is vast and challenging. The main problem is to separate oneself from your competitors and find the job you desire.
How many jobs are being created in which categories is almost irrelevant to any one individual.

Step back a bit, however, and the shape of the job market is critical. If the economy is creating many good middle class jobs, people will find them and society will have a strong middle class. That was the case with the boom of the 1960s and 1970s, when manufacturing and white-collar clerical and retail and professional jobs expanded by leaps and bounds, drawing lower-productivity workers out of farming and unskilled manual labor into factory, office, and service jobs.

But we are now apparently seeing a new phase of technology that is again reshaping the job distribution across sectors. Only this time it is doing the exact opposite of what occurred in the 1960s and 1970s; it is taking jobs OUT of the middle class sector and increasing them only at the high end creative/professional and lower-third semi-skilled service sectors. The internet and digital distribution make it possible for the intellectual and creative products of designers, financiers, authors, and program developers to be sold around the world instantly at huge volumes for minimal costs. This provides huge rewards to the winners, although the low barriers to entry mean that competition for visibility is more fierce than ever. Similarly, robotic manufacture and cheap transport make it possible for successful products to be sold in huge volumes around the world, with profits being concentrated among those who design and market the product and oversee production, but very little going to workers to make products.
Thus Apple — an incredibly successful company — employs relatively few people in the U.S. Most of those are in low-paid jobs at Apple retail stores, while a small elite of designers and programmers and those who hold Apple stock grow fabulously rich. If Apple is the future of U.S. manufacturing success, then the U.S. middle class is doomed (Apple will continue to sell its products, but will have to target cheaper versions to the rapidly growing middle classes in developing nations).

Jobs that cannot be replaced by machines are the creative/professional jobs of which the economy needs relatively few, and the individualized service jobs (landscaping, manicures, dental technicians, barbers, chefs) that still require the human touch. Perhaps wages will sort themselves out eventually, and incomes of those providing menial services to the well-off will keep pace — after all, hair stylists in the US still make ten to twenty times what their equivalents in middle-income countries make.

Still, at some point the ongoing displacement of people from middle class manufacturing, retail and service jobs will lead to a dumbell-shaped job distribution, with a small group of superstars and supporting professionals at the top, a slender waste of remaining middle-class jobs, and a large base of semi-skilled and moderately-skilled service jobs with huge wage competition driving down incomes.

We have been seeing this to a modest extent, but it has been delayed by the huge number of baby-boomers still holding down the middle-class jobs they acquired in the past. But the Great Recession has led companies to start to cut their middle-management and middle-class blue collar and sales forces to seek efficiency and make profits during a time of economic stagnation. Most of those who lost their jobs in this recession have had to take early retirement, disability, or move to lower-paying jobs. Indeed, the special mark of this recession is that labor force participation rates fell and have barely recovered.

So if we are to preserve the American middle class, we need to think about what kinds of jobs will provide a middle class income to the AVERAGE college graduate (assuming a bachelor’s degree increasingly becomes the norm for the current younger generation). The last thing we want is a generation that has gone to college to get ahead, only to find that the job distribution for society as a whole does not have enough positions for average skilled workers to obtain a solid middle class income.

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About jackgoldstone

Hazel Professor of Public Policy at George Mason University
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One Response to The Shape of Jobs to Come…

  1. fhapgood says:

    Teaching seniors how to use their smartphones …

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