Polarized job market hurting those in middle, study says
WASHINGTON — Americans at the top and bottom of the income scale are benefiting most from the jobs recovery, while those in the middle are getting left behind.
Employees who make above average wages, such as doctors and energy industry workers, and those at the other extreme, including home-health aides and restaurant staff, have seen outsize gains in hiring since the jobs recovery began in February 2010, say economists at Wells Fargo & Co. and JPMorgan Chase & Co. Professions in the middle, such as financial services and specialty construction, aren’t faring as well.
Such a shortfall helps explain why income gains have yet to return to levels seen before the recession began and why consumer spending over the past two years has grown at the slowest pace in the post-World War II era. It also suggest a pool of unemployed Americans will prevent wage increases from fueling inflation.
‘‘If we’re only creating jobs for the highly skilled and for folks with basic skills, then you’re leaving an awful lot of people behind,’’ said Mark Vitner, a senior economist at Wells Fargo in Charlotte, N.C. ‘‘Until we have broad-based growth, it’s hard to imagine how we can have a selfsustaining economic recovery.’’
The highest-paying jobs, which employ about 15 percent of all workers, have accounted for 20 percent of the gains in employment since February 2010, Wells Fargo calculations show. Those whose average earnings are lower than 60 percent of all employees have accounted for about 46 percent of job growth.
Middle-income occupations, which employ about 40 percent of all workers, have created about 34 percent of jobs since February 2010, Wells Fargo found.
Confidence among those making more than $100,000 a year and for those with annual incomes between $15,000 and $25,000 has improved more in the past six months than for families making from $25,000 to $50,000, figures from the Bloomberg Consumer Comfort Index showed last month.
Employment was little changed during or since the recession for a range of positions from computer programmers to bartenders and home health aides, jobs that encompass the high and low ends of the income spectrum and require nonroutine skills like flexibility, problem-solving, or human interaction, according to economists Nir Jaimovich and Henry Siu, both members of the National Bureau of Economic Research.
Technology allowing businesses to replace routine labor with equipment may explain the lack of middle-income jobs, they wrote in a paper.
Shrinking manufacturing employment doesn’t explain the entire decline, said Jaimovich. Factory workers account for 25 to 30 percent of all the jobs lost among middle-skill positions, he said. ‘‘This is a story that goes much further than the emptying of factory floors,’’ Jaimovich said.
‘‘Companies have been driving, and continue to drive, for increased productivity, to do more with less, and the tool to do that is technology improvement,’’ said Jonas Prising, president of Americas for Manpower Inc., the world’s second-largest provider of temporary workers. ‘‘What are getting squeezed are the wellpaying jobs with lower-skill levels that used to give a middleclass income.’’