- 2 days ago ... The New York Fed suggests the tide has turned for middle-wage jobs.
- 2 days ago ... The New York Fed suggests the tide has turned for middle-wage jobs....
- 2 days ago ... The New York Fed suggests the tide has turned for middle-wage jobs. ... Capitol Report: Middle-class jobs making a comeback, NY Fed says
- 2 days ago ... The New York Fed suggests the tide has turned for middle-wage jobs....
Is the U.S. Staging a Middle Class Comeback?
The New York Fed suggests the tide has turned for middle-wage jobs.
By Andrew Soergel | Economy Reporter Aug. 19, 2016, at 1:46 p.m.Mid-wage occupations have ballooned in the last few years, according to new data from the Federal Reserve Bank of New York. (iStockPhoto)Bubbling to the forefront of the 2016 election cycle has been an inescapable element of polarization. Candidates and the rhetoric they use have drifted ever closer to the extremes – as evidenced by the unexpected success of Donald Trump on the Republican side and Sen. Bernie Sanders of Vermont on the Democratic side. Catering and appealing to moderates at this stage of the game appears to have become a thing of the past.
Some theorize that widening income inequality and a bifurcation of the labor market have helped push this trend along. Over the last several decades, the decline of the American middle class and a general stagnation of national wages have been well documented.
And ever since the Great Recession, the types of jobs employers are most actively recruiting for have visibly diverged. Low-paying service jobs and high-paying specialized professions have been in high demand, while mid-wage positions – manufacturers, construction workers, administrative support personnel – have largely been left in the dust.
That is, until recently. William Dudley, president and CEO of the Federal Reserve Bank of New York, announced this week he sees evidence suggesting "the tide has begun to turn" on the erosion of the middle class.
"This long-term hollowing out of jobs in the middle of the wage distribution has helped fuel rising wage inequality and has contributed to a growing sense for some that they are being left behind during the current economic expansion," Dudley said during a news conference Thursday, though he went on to note that "for the first time in quite a while, we are seeing gains in middle wage jobs that actually outnumber the gains in higher and lower wage jobs nationwide."
Dudley doesn't deny that a prolonged hollowing out of the middle class was evident in the U.S. labor market, suggesting that "growth of middle wage jobs has been lackluster for the past few decades, with gains occurring disproportionately in higher and lower wage sectors."
Even in recent years, Dudley and his colleagues found that more than 78 percent of the jobs added to the labor market between 2010 and 2013 were concentrated in high-wage – with annual pay north of $60,000 – and low-wage – with annual pay south of $30,000 – positions.
But that trend took an abrupt turn between 2013 and 2015. During that window, the share of jobs added that qualified as middle-wage rose from just 22 percent to nearly 43 percent. The "U-shape" the labor market had taken in the immediate aftermath of the Great Recession – with job growth concentrated at the extremes with little opportunity in the middle – had inverted, becoming more "hump-shaped," says Jaison Abel, a research officer and function head at the New York Fed.
Middle-wage jobs rebounded between 2013 and 2015, according to the Federal Reserve Bank of New York. Andrew Soergel for USN≀ Source: Federal Reserve Bank of New York
"We're seeing a return of these middle-wage jobs," he said Thursday. "A good bit of this has to do with just shifting gears in the economic cycle and moving from recovery to having some sustained expansion."
Specifically, the New York Fed singles out the transportation, construction, manufacturing and production, administrative support, installation and repair and education industries as helping fuel the middle-class resurgence. Some of these industries were naturally held down during the early days of the recovery because of cyclical and societal trends. Education employment, for example, took a hit when government stimulus packages began to abate. Construction was restricted because of how volatile the domestic housing market became.
"Keep in mind in the early stages of the recovery, because this cycle was driven by a housing crisis, the housing cycle in particular was quite weak," Abel said. "We didn't see a lot of these jobs come back in the earlier part of this recovery."
Robert Shapiro, founder and chairman of Sonecon economic consulting and advisory company, advisor to the International Monetary Fund and former U.S. undersecretary of commerce for economic affairs, found a similar trend when he analyzed changes in the wages of U.S. age cohorts over the last few decades. He says the stagnant or downward wage trend seen by most American demographic groups "turns around" in 2013 and 2014.
"This period of declining incomes, which began with the recession in 2001, was sustained through the 2002 to 2007 expansion and was then compounded by the financial crisis and the Great Recession that followed it from 2008 to 2010, and then the slow growth of the next couple of years – it stops, and you get a new development," he says.
That's not to say, however, that middle income jobs have rebounded entirely or that industries like manufacturing or administrative support will ever fully return to their previous greatness. Manufacturing employment has rebounded more than 7.4 percent from where it bottomed out in March 2010 but is still down more than 37 percent from where it sat during the industry's 1979 peak.
"Manufacturing has been getting slowly suffocated over the course of decades, because that industry is just leaving the U.S. in large part. And the industry is getting so productive and so automated," says Andrew Chamberlain, chief economist at employment hub Glassdoor. "Manufacturing output is rising and wages are rising for the people who are able to maintain their jobs, but they're getting so efficient with these manufacturing systems that they just don't need as many hands."
Administrative roles, likewise, have largely been phased out by technological advancement. The Bureau of Labor Statistics estimates employment opportunities for bookkeeping, accounting and auditing clerks has fallen more than 5 percent since 2000 and would decline 8 percent more between 2014 and 2024, due in part to "software improvements, such as cloud computing" and a general trend toward "technological change." Bill and account collector jobs, likewise, are expected to drop 6 percent by 2024 thanks to "new software and automated calling systems should increase productivity and allow collectors to handle more accounts."
So although evidence is mounting that middle-income jobs are staging a comeback that could help restore the domestic middle class, it's hard to ignore the fact that some traditional mid-wage jobs simply aren't going to come back. Still, though, the trend bodes well for what's looking like an increasingly polarized American public. The New York Fed is just the latest body to suggest the labor market may not be nearly as hollow as it was in years past."My view is that we still have one of the strongest job markets that we've had in a generation today," Chamberlain says. "Overall, for the country as a whole, there is a pretty broad diversity of jobs being added today."
To the best of my ability I write about my experience of the Universe Past, Present and Future
No comments:
Post a Comment