Labor Market Polarization

I’m reposting this for my own recall

(Community Matters) The increasing polarization of jobs being created in the market – Dallas Federal Reserve newsletter – is due to automation of routine jobs and to a lesser extent offshoring, resulting in the loss of middle-skills jobs. Higher education and a willingness to upgrade skills accounts for better performance of women in the jobs market over last 25 years. Men who lose these middle-skills jobs are remanded to lower-skills, lower paying jobs.

The number of jobs requiring medium levels of skills has shrunk while the number at both ends of the distribution – those requiring high and low skills level – has expanded. . . . polarization began about 25 years ago, in the early 1990s and intensified in the last decade. . . . Middle skills jobs were not recovered [after the recessions of this period, especially the recession of 2008-09].

Routine jobs always rebounded during the economic expansions that followed the recessions of the 1970s and 1980s. The pattern changed dramatically in the three recessions since 1990. None of the routine jobs lost in these downturns came back in the following expansions.

Middle skills jobs those in blue below (manual & cognitive routine).

dallas fed jobs skills

While women were hit much harder than men by the disappearance of middle-skills jobs, the majority of women managed to upgrade their skills and find better paying jobs.

Middle-skill, routine jobs still account for almost half of all existing jobs.

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