The recession that followed the financial crisis has taken its toll on every part of the economy, but it has hit employment especially hard -- causing the unemployment rate to skyrocket to 10% in 2009 from 4.6% just two years earlier. Eight million jobs have disappeared, many of which did not require a college diploma.
But the occupational sector that has seen the worst decline is that of middle-skill jobs, those which have historically paid between approximately $14.00 and $21.00 per hour. Sixty percent of positions with this mid-wage pay scale were lost during the Great Recession, and have rebounded by only 27% since the recession ended -- and their loss is decimating the middle class.
Employment gap keeps widening
The Associated Press recently noted that the unemployment rate for Americans making under $20,000 annually sits at 21%, compared with the 3.2% attributed to those making at least $150,000 per year -- the widest spread in a decade. Part of the reason for this phenomenon is that the dearth of mid-wage jobs is forcing workers into lower-paid occupations -- an effect known as "job polarization."
While the recession sped up the process of polarization, the issue has been apparent for years. Over the past 30 years, economists have noted that the economy has steadily offered more opportunities for high-skilled and low-skilled workers, to the detriment of the middle-skilled.
Where are these jobs going?
Many middle-skill jobs, such as sales, office administration, production, and repair work, are often considered routine -- and easily automated or moved offshore. Usually, they require training beyond high school, but not a four-year college degree. While 25% of the working population was employed in these kinds of jobs in 1985, only about 15% held these types of positions by 2012.
Those suffering the most from the employment gap tend to be younger workers. As mid-wage jobs vanished, many older workers retrained to move up into high-skilled jobs, and high school graduates moved into the workforce, rather than attending college. This placed them smack dab into low-skilled work, while their college-bound peers studied. Unfortunately, even young workers with college degrees have moved more quickly into low-wage jobs than older workers.
Mid-wage jobs: Going, but not gone
Economists have shown that recessions are mid-wage job killers, as most jobs lost come from that sector, which never really seems to recover post-downturn. Still, middle-skill jobs do exist, and employers are looking to fill them.
For example, after slashing its work force by more than 50% during the recession, the auto industry is looking to fill 140,000 positions over the next few years, most of them mid-wage. In addition, employment firm Manpower notes that some of the toughest jobs to find candidates for last year were sales representatives, machine operators, and drivers -- to name a few.
States are letting the public know that mid-wage job openings are just waiting for candidates to fill them. Massachusetts predicts decent job growth through 2016 for paralegals, physical therapist assistants, and dental hygienists, and Maryland sees sunny days ahead for electricians, plumbers, and other skilled tradespeople -- and is offering to help interested applicants train for those occupations.
Probably, this is the best way to match up applicants with middle-skills jobs: state by state, through public-private partnerships that not only advertise that the jobs are available, but also help job seekers obtain training.
Mid-wage positions are shrinking, but there are some occupations, like those in health care and the building trades, that are never going to go away. With some of these jobs paying as much as $72,000 annually -- in Maryland, at least -- they are worth seeking out.
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