Job Situation: A Hollowed Out Middle

Econintersect:  A New York Fed study concluded that the share of jobs in both high- and low-paying occupations has grown, leaving a shrinking middle.

You might ask what is a “middle job”?  That would be things like – service technicians, teachers, sales people, transport operators, admin support, precision production worker – among many others with pay within a few thousand dollars above and below the median income level.  The median household income for 2010 was $49,445.  Alternatively, one could consider the average household income which was about $70,000 in 2009, using Census Bureau data for number of households and for total personal income.  So, a general definition of the “middle” might be household incomes between $45,000 and $75,000. 

In 1980, three-quarters of all workers were employed in mid-skill occupations. Among the occupations included in this group, Machine Operators accounted for 10 percent of the U.S. workforce, and Administrative Support accounted for 18 percent. By 2009, the share of jobs in the mid-skill category had shrunk to two-thirds, with Machine Operators accounting for just 4 percent of all jobs and Administrative Support for 14 percent.

Real wage growth (inflation adjusted) too has been constrained for most of the middle skills – as well as the low skill group.

The study concludes:

Clearly, the U.S. workforce has undergone a significant occupational restructuring since the 1980s. Along with an increase in the share of high skill jobs and low skill jobs, there has been a growing wage gap between workers in jobs that pay the most and those that pay the least. With a rising share of jobs at the upper and lower ends of the wage distribution and a wider gap in wages among occupations, jobs have become more polarized in the United States over the past three decades.

As reported by GEI News Monday, 32% in the U.S. are now living near, at or below the poverty line.

source: NY Fed