Despite Recovery, Middle-Wage Workers Are Being Squeezed Out
Many workers' prospects have improved as the unemployment rate has slipped down to 5.1 percent. But not all are seeing better days in the economic recovery. Recent studies show most jobs are going to workers either in the top third or the bottom third of income.
A study by Georgetown University found that middle-wage jobs haven't fully recovered from the Great Recession. They represent nearly a third of the jobs gained in the recovery but are still 900,000 jobs short of pre-recession levels, the study said.
Those in between the top and bottom thirds are getting squeezed out — especially men. Economists call them middle-skilled workers. They have good jobs that don't necessarily require specialized training or a college education. Think file clerk, legal assistant or production baker.
Ellsworth Ashman is one of those middle-skill workers. He put in 23 years at Entenmann's, a company that had been baking sweets on Long Island for more than 90 years.
"This place, during my time, we were making over a million [cakes] a week," Ashman says
His job required some skill, but it was routine, and those are the jobs that are disappearing. Entenmann's eliminated Ashman's job last year — leaving him with a tough choice: Go back to school and get a higher-skill job. Or get a low-skill job to pay the bills.
He recently began working at an assisted living facility. "I keep everything up to par in terms of cleaning and dusting," Ashman says.
This job pays half what he made at Entenmann's. "But I'm a man, and you got to do what you got to do," he says.
Ashman's word choice nails it. Researchers say as men's middle-skill jobs disappear, women are gaining.
Maribel Moran used to be a receptionist at several law firms. "But it was just very, after a while it just got very boring and like routine and I just felt stuck and I felt like I plateaued there," she says.
She decided to go back to school for a bachelor's degree. And at a job fair in New York City, she was looking for something better.
"Most men, I think, are used to their routine and what they know already. So to go into something new is a little tougher with most men," she says.
Labor economists can't exactly explain this gender divide. But they do know women are better educated than men. David Autor, an economist at MIT, says this baseline education prepares woman to survive the disappearing middle tier of jobs.
But, he says, "even holding education constant, we see less-educated men faring worse than less-educated women. They are moving more into low-skill occupations and they just check out."
Statistics show labor participation for prime age males has been falling for a long time and it drops faster with each recession. Autor says the ramifications are profound. Greater income inequality for one. Also, lower marriage rates, which create what Autor calls an intergenerational feedback loop.
"Boys do worse than girls in that setting and so that sets them up again to be less likely to complete high school, to attend college, more likely to be incarcerated, and in general have lower earnings," he says.
The long-term solution is of course education; the short term is tougher. Harvard economics professor Lawrence Katz says one solution is to subsidize low-skill wages, but Congress has been reluctant to boost that subsidy.
"The earned income tax credit has been very effective at that, but its real value hasn't increased in 20 years," he says.
But, Katz cautions, economies have always lost jobs. And workers have always adapted. To survive the disappearing middle, he says, workers need to customize current services or invent jobs a computer can't do. Though some researchers see computers getting better and soon replacing what we now consider high-skill jobs.
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