Labor Polarization: Is this going to be the continued wave of the future?

[CountDeMoney]

How many of us here are considered "Mid-Level"?

Help Wanted. But Not For Mid-Level Jobs
by Yuki Noguchi
NPR

Unemployment figures for May come out Friday. While the numbers will show how many jobs have been added or lost, they won't tell us much about the quality of positions filled or illustrate what economists already know: that the middle of the job market is hollowing out.

Demand remains for people with complex skills, like software engineering or the ability to read X-rays. There is also demand for people to take jobs that require less skill, like cleaning and waiting tables. It's the jobs in the middle that are being squeezed – sales, administration, assembly positions, for example.

Economists have a term for this phenomenon: labor polarization.

"What's happening is we're getting jobs at both ends of the spectrum," says Howard Rosen, a research fellow at the Peterson Institute for International Economics.

The phenomenon goes back a couple decades, but Rosen says it has become much more visible in recent years. Companies accelerated the rate they laid off workers in those middle-skill jobs. Since then, in the recovery, firms haven't been adding those jobs back.

"We have two things going on: We have more people looking for jobs than we have jobs," Rosen says. "And also, there's a shift in the composition of those jobs. So many of those people looking for jobs are taking jobs at lower wages."

Take, for example, Sonya Spears. Until two years ago, Spears had a full-time job generating sales leads for a California-based company. When she lost that job, she moved from her studio apartment in western Massachusetts to a group house close to Boston where she has to share a bathroom and kitchen.

Now in her early 50s, Spears says the only job she has gotten so far is part-time, for $10 an hour. She says she surfs help-wanted ads on Craigslist and Careerbuilder – to no avail.

"I feel pretty bad. I never thought I'd end up like this, at my age, 'cause when I was younger, it seemed like only the experienced people got the jobs," Spears says. "Now they want the young kids out of school, and they don't want experienced people anymore."

Spears, who has a college degree in communications, feels stuck. For health reasons, she can't do physical labor or even retail jobs requiring her to be on her feet all day. Nor does she have the skills necessary for some of the higher paying work she'd like to get.

"I can't afford any other training," she says. "I was thinking about maybe going and getting a master's degree; but because I cannot get grants or loans, I can't afford to do that."

Workforce demand often changes when technology shifts, says David Autor, an economics professor at MIT whose research focuses on labor polarization.

"Many forms of technological change in the past probably had the effect of eliminating low-skilled work and making high-skilled work more important," he said. "This is a form of technical change that has had the effect of displacing the middle.

Faster processing speeds and software mean things can be monitored remotely. Software makes it easier for people to digitize and manipulate data.

So, for example at MIT, where Autor works, the school was able to save money by laying off many administrative workers without severely affecting productivity. There simply was less paper to push around. The school found it still needs professors and it still needs janitors, but not the layer of staff in between.

"And that's an uncomfortable phenomenon because we like to think of the march of progress as creating more and more good jobs, and fewer and fewer undesirable jobs," he says. "But that's not the era we're living in."

He says that partly explains why so many people have gotten discouraged and stopped looking for work, or why they remain unemployed for a very long time.

"And the problem is that once especially older, less-educated workers are out of the labor force for a while, they just become increasingly less likely to return," Autor says.

For Spears, owning her own business would be her dream, but that's not an option. She can't get a bank loan because the last couple of years have destroyed her credit.

"If I had my way, I'd not have to depend on an employer again," she says, "but I'm not in the situation to do that now."

[Ideologue]

I like how it turns out everything I was saying ten years ago is coming to pass, but I don't like how it means everything sucks.

[Neil]

Not really that shocking.  It's going to get a lot worse before people finally acknowledge that consumerist capitalism was never really sustainable.  Cheap credit managed to extend the bubble a little ways, but ultimately when you're turning almost everybody into low-end wageslaves, they aren't going to be able to afford your assorted products.  On the other hand, where do we go from here?  The bubble period was a time of incredibly high living standards, and folks aren't going to like to see those rolled back.  Look at what's happening in Europe right now.  But if those who are fortunate want to pretend that they don't live in a community, then the masses have no reason not to kill them.

[The Brain]

I guess they should have stayed in school.

[Ideologue]

I guess they should have stayed in school.

What, forever?

But if those who are fortunate want to pretend that they don't live in a community, then the masses have no reason not to kill them.

Something that always surprises me is how well-controlled people in the U.S. are.  Even homeless folks, who literally have nothing to lose and are close to dying anyway, refuse to go out in a blaze of glory.  Let alone the young males you really need to drive a red terror.

[Martinus]

I actually remember having a conversation about it with RH during one of London Languish meets - essentially, jobs these days come either as highly paid but also highly demanding (not just in terms of skills/education, but time, commitment, flexibility etc.) positions or as badly paid ones - there seems to be less and less stable, 9-5, medium-level paying jobs out there.

[Tonitrus]

The high-pay/high-commitment jobs are probably becoming more high-commitment because they can no longer rely on that mid-level/mid-pay admin assistant to deal with the mundane crap.   

MIT might have found they can get by with less admin positions, but I bet there are a lot of stressed professors thinking "I can't believe I have to deal with this bullshit myself now". 

[Martinus]

Anyway, I know this term is a bit trite, but I think what we are witnessing is not really hollowing out the middle of the job market, but shift to what some call the "creative class", which are the people (of various pay levels) that perform creative functions and will continue to be paid more and more, whereas as pointed out, people in administrative/automatic functions will be replaced with software and robots.

[Martinus]

The high-pay/high-commitment jobs are probably becoming more high-commitment because they can no longer rely on that mid-level/mid-pay admin assistant to deal with the mundane crap.   

Nah. It's more the case that we have replaced couriers with e-mails and now have to respond much faster than before.

[CountDeMoney]

people in administrative/automatic functions will be replaced with software and robots.

Or an endless carousel of low-paid contractor staff, burn-out after burn-out.

[Ideologue]

people in administrative/automatic functions will be replaced with software and robots.

Or an endless carousel of low-paid contractor staff, burn-out after burn-out.

[Zanza]

A lot of those jobs are shifted offshore here. In the area I work, we have our software developers in Minsk and Bangalore, our IT support in Bucharest, the accounting functions will soon be handled in Cebu, Phillipines. Etc.

[Capetan Mihali]

Not really that shocking.  It's going to get a lot worse before people finally acknowledge that consumerist capitalism was never really sustainable.  Cheap credit managed to extend the bubble a little ways, but ultimately when you're turning almost everybody into low-end wageslaves, they aren't going to be able to afford your assorted products.  On the other hand, where do we go from here?  The bubble period was a time of incredibly high living standards, and folks aren't going to like to see those rolled back.  Look at what's happening in Europe right now.  But if those who are fortunate want to pretend that they don't live in a community, then the masses have no reason not to kill them.

    I concur. 

[Jaron]

I was speaking to a co worker on Friday, and all the software guys in my company's Indian subsidiary get paid like 1.50-2/hour for programming. wtf, how can Americans compete with that?

[Ideologue]

With guns.