Middle-Skill Jobs: Going Strong or Fading Away?

For the past several years, we’ve heard about the increasing demand for workers with mid-level skills — those who don’t have a four-year degree but have more than high school diploma. Perhaps the most noteworthy study was completed by Skills2Compete.

But now there’s this: New labor market analysis from David Autor of MIT suggests that middle-skill employment has bottomed out — at a rapid rate — and the workforce has split predominantly into high- and low-skill/wage jobs. The following chart, used in a Wall Street Journal piece on how some firms are struggling to find workers, very clearly illustrates this trend.

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How can there be this supposed immense demand for middle-skill workers, as documented by multiple studies, and a decline in middle-skill employment that Autor brings to the surface?

First, the fact is none of these categories (high-skill, mid-skill, low-skill) has experienced growth since 2008. It’s just that mid-skill jobs have plummeted faster and farther than high- and low-skill employment.

It also should be noted that most recent middle-skill studies focused on projecting future demand; Autor’s study looks at historical trends.

Autor offers a few possible explanations in the highlighted excerpt below, most notably offshoring (which we touched on last week) and automation.

Measuring employment polarization is easier than determining its root causes, but researchers are making progress in understanding the operative forces behind the data. A leading explanation focuses on the consequences of ongoing automation and offshoring of middle-skilled “routine” tasks that were formerly performed primarily by workers with moderate education (a high school diploma but less than a four-year college degree). Routine tasks as described by economists David Autor, Frank Levy, and Richard Murnane are job activities that are sufficiently well defined that they can be carried out successfully by either a computer executing a program or, alternatively, by a comparatively less-educated worker in a developing country who carries out the task with minimal discretion.

But perhaps the most important note: In Autor’s study, skill is approximated by wage (see page 2), so jobs that pay an average wage that falls in the middle of the earnings spectrum would be considered “middle-skilled.” In the endnotes, he goes on to write:

Although economists would typically view the wages paid to a job as the best summary measure of the job’s skill requirements, lay readers may take some assurance that wages as a skill measure are highly correlated with logical alternatives, such as education and experience. Moreover, the ranking of occupational skills based on either wage or educational levels is quite stable over time.  (Emphasis added.)

Keep in mind, though, jobs in specific industries like manufacturing (see the above-mentioned WSJ article) and administrative services sometimes pay more than the worker’s education and experience would dictate. That’s because supply and demand drive wages — not skills. Someone can be skilled and experienced in a trade, but until there is demand, there’s little or no money in it.

The bottom line: It’s easy to delineate a middle-waged job from a high-waged job — middle-skilled, however, is a matter of definition. It could mean middle-educated or length of time on a job, etc.

Read more at a Mother Jones blog here.

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