Job Polarization and Jobless Recoveries

At a recent meeting organized by Pew's Economic Mobility Project, I took part in a discussion with Harry Holzer, a professor at Georgetown University and an expert on the low-wage labor market. The subject of the disappearing middle came up--the idea, developed by David Autor and others, that the middle-wage part of the income distribution is being hollowed out.

Many low-wage jobs that have to be done on the spot--cleaning, gardening, and so on--can't be automated away. Not yet. The same goes for non-routine high-wage jobs requiring initiative as well as mere computing power. But in the middle are routine tasks (manual and non-manual) which are susceptible to automation. These, and the wages they command, are under attack.

Holzer said Autor was clearly on to something, but he expressed some skepticism about the force of this change. He thought there was plenty of scope for new middle-wage jobs in service industries with room to grow--health care, for instance, where some of the work that doctors do at great expense could be moved to nursing staff with additional training. That sounded right to me.

But job polarization keeps coming up. A new paper by Nir Jaimovich and Henry Siu--The Trend is the Cycle: Job Polarization and Jobless Recoveries--links the shrinking middle to the slow recovery of employment after recessions. After last Friday's jobs numbers, that connection is topical. Here's the abstract:

Job polarization refers to the recent disappearance of employment in occupations in the middle of the skill distribution. Jobless recoveries refers to the slow rebound in aggregate employment following recent recessions, despite recoveries in aggregate output. We show how these two phenomena are related. First, job polarization is not a gradual process; essentially all of the job loss in middle-skill occupations occurs in economic downturns. Second, jobless recoveries in the aggregate are due to jobless recoveries in the middle-skill occupations that are disappearing.

David Andolfatto of the St Louis Fed calls this a very interesting finding, and I agree. Interesting and worrying. Dave Altig's Macroblog, which first guided me to the paper, connects the new work to the debate over how much room the Fed has for additional stimulus.

Presented by

How to Cook Spaghetti Squash (and Why)

Cooking for yourself is one of the surest ways to eat well. Bestselling author Mark Bittman teaches James Hamblin the recipe that everyone is Googling.

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register.

blog comments powered by Disqus

Video

How to Cook Spaghetti Squash (and Why)

Cooking for yourself is one of the surest ways to eat well.

Video

Before Tinder, a Tree

Looking for your soulmate? Write a letter to the "Bridegroom's Oak" in Germany.

Video

The Health Benefits of Going Outside

People spend too much time indoors. One solution: ecotherapy.

Video

Where High Tech Meets the 1950s

Why did Green Bank, West Virginia, ban wireless signals? For science.

Video

Yes, Quidditch Is Real

How J.K. Rowling's magical sport spread from Hogwarts to college campuses

Video

Would You Live in a Treehouse?

A treehouse can be an ideal office space, vacation rental, and way of reconnecting with your youth.

More in Business

Just In