Monday, August 25, 2014

Middle-Paying Jobs Decline

The American Enterprise Institute's James Pethokoukis has snagged a chart from a presentation made a couple of days ago by David H. Autor at the Fed's Jackson Hole conference. It shows graphically the extent to which middle-paying jobs are disappearing across the 16 nations of the EU for which data is available.

The chart reflects changes taking place over a 17 year period - 1993-2010. We can be relatively certain a similar disappearance has happened in the U.S.

Losses of middle-paying jobs range from almost 15% in Ireland to about 5% in Portugal, with the median loss of such jobs being 10.5%. What are middle-paying jobs?
Middle-paying occupations are stationary plant and related operators; metal, machinery and related trade work; drivers and mobile plant operators; office clerks; precision, handicraft, craft printing and related trade workers; extraction and building trades workers; customer service clerks; machine operators and assemblers; and other craft and related trade workers.
While middle-paying jobs have declined in all 16 countries, high-paying jobs have increased in all 16. Intriguingly, low-paying jobs - laborers, unskilled sales and service jobs - increased modestly in 14 of the 16 nations, declining only in Luxembourg and Finland.

The much ballyhooed "hollowing out of the middle class" is not, it would seem, a purely American phenomenon but in fact something happening across the developed world. These societies have not dealt with what will become of the individuals in coming generations who have average intellectual capacity and modest motivation levels when the jobs they once would have filled no longer exist.

Some will be able to qualify for high-paying jobs; many more will either take low-paying jobs or live on the dole. Aldous Huxley's Brave New World had a solution for this problem: produce exactly those people society needs - easier said than done, of course.