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Hmmmm, middle skill jobs are jobs that "concentrate on routine tasks."  Sounds like technology rendered a lot of positions, and thus the need for people to fill those positions, obsolete and those jobs are never coming back.

what are we to do about this?

i thought this report offered a pretty good explanation of why we're seeing the disappearance of "good" jobs in america and how the loss of these jobs is linked to recessions such as the one we're in now.  

h/t Brad Delong who provided my link to this report.

While the hollowing out of middle-skill positions has been ongoing for 30 years, it happens almost uniquely in recessions.

Two recent trends in the U.S. labor market -- job polarization and jobless recoveries -- are not only evident in the aftermath of the recent recession but also are linked, according to Nir Jaimovich and Henry Siu writing in The Trend is the Cycle: Job Polarization and Jobless Recoveries (NBER Working Paper No. 18334). Polarization -- the loss of middle-skill jobs that concentrate on routine tasks -- happens in spurts and essentially only during recessions. Because these jobs don't return once recessions are over, the rebound in the labor market is slow, and the result is a sluggish or "jobless" recovery.

"Jobless recoveries are observed only in these disappearing, middle-skill jobs," the authors write. "The high- and low-skill occupations to which employment is polarizing either do not experience contractions, or if they do, rebound soon after the turning point in aggregate output."

While the hollowing out of middle-skill positions has been ongoing for 30 years, it happens almost uniquely in recessions. Fully 92 percent of the loss of these jobs occurs within 12 months of NBER-dated recessions. Averaged over the last three decades, these jobs have accounted for more than half of all U.S. employment - so their disappearance represents a major drag on recoveries.

The authors compare three early recessions (ending in 1970, 1975, and 1982) with three later ones (ending in 1991, 2001, and 2009). On average, employment took ten months to recover in the early downturns versus 21 months in the later recessions. In the most recent (and sharpest) recession, employment still hasn't recovered to pre-downturn levels.

This difference can't be explained by differences in the severity of the declines. On average, output regained half of its pre-recession high in seven months during the early downturns; it took only slightly longer -- nine months -- in the later downturns. What has changed is the behavior of employment in routine occupations.

Routine occupations bear the brunt of the loss in all of the downturns. In the 1982 recession, these occupations experienced an employment loss that was greater than the total employment loss in the recession, because employment in the non-routine occupations was actually growing. In early recessions, however, these occupations recovered; in later recessions, they have not, not even in the long term. Thus, the authors conclude, "jobless recoveries" are observed only in these disappearing routine occupations and only since job polarization began.

This phenomenon is not accounted for simply by the cyclical behavior and secular decline of manufacturing in the United States. Similarly, it is not merely a result of the employment experience of workers with low educational attainment. The authors write that "a trend in routine-biased technological change can lead to job polarization that is concentrated in downturns, and recoveries from these recessions that are jobless."

--Laurent Belsie

The Digest is not copyrighted and may be reproduced freely with appropriate attribution of source.

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Comment Preferences

  •  Tip Jar (3+ / 0-)
    Recommended by:
    randomfacts, tampaedski, Sunspots

    A standing army is like a standing member. It's an excellent assurance of domestic tranquility, but a dangerous temptation to foreign adventure. Elbridge Gerry - Constitutional Convention (1787)

    by No Exit on Sun Jan 27, 2013 at 10:39:34 AM PST

  •  And yet our education system still (2+ / 0-)
    Recommended by:
    Sunspots, No Exit

    is based on training people for factory jobs - exactly the jobs that disappear forever.

    The gist of this report is no surprise to me, and it angers me to some extent how many people are willing to say things like "Obama sucks on the economy" or "where are the jobs?" when the concept of "jobless recovery" has been around for over 2 decades, and recent evidence does not show that the trend is going away anytime soon.

    •  no one talks about it, because no one wants to (1+ / 0-)
      Recommended by:
      Sunspots

      deal with the problem.  which is the fact that the jobs available to most people don't provide anything close to a middle class life style.

      we are literally living in a period of time where the economic models tells us exactly what we need to do in order to fix the jobs crisis; government hiring.  rebuild our infrastructure, bridges, cables under ground, renewable energy projects... there is no end to the good ideas out there that we can fund with virtually free money.  now is the time to pull spending on public works in the future into the here and now.  a massive public spending works puts money in the hands of people who will spend it in their local economies.

      the government just won't/can't get it done for [insert your reason here].  

      we're far from the point of even being able to have a rational debate about how we're going to ration out the american dream.  our media keeps us ignorant and focused on disractions...

      A standing army is like a standing member. It's an excellent assurance of domestic tranquility, but a dangerous temptation to foreign adventure. Elbridge Gerry - Constitutional Convention (1787)

      by No Exit on Sun Jan 27, 2013 at 03:34:23 PM PST

      [ Parent ]

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