Jobs are gradually coming back, but that doesn’t mean that they’re equal to the ones that have been lost. A new working paper from the National Bureau of Economic Research confirms what many have suggested for some time: While high- and low-skill jobs tend to rebound quickly after a recession is over, many middle-wage jobs simply disappear, while low-skilled jobs make a much bigger proportion of the labor force.
In the study, Nir Jaimovich of Duke University and Henry Siu of the University of British Columbia looked at recessions in the United States over the last 30 years. What they found is that the loss of mid-wage, middle-skilled employment—from white-collar jobs like secretarial work and blue-collar jobs in manufacturing—hasn’t happened steadily. Instead, the paper explains, the loss of these middle-wage jobs has happened “almost entirely in recessions,” and when the economy does rebound from these downturns, it doesn’t fully replace them.
In their analysis, the economists divide jobs into three categories that roughly correspond to high-skilled, middle-skilled and low-skilled employment. The first category of “non-routine cognitive” jobs is the professional class of workers: managers, financial analysts, economists and the like. The second-class of so-called “routine” jobs are characterized by “a set of specific activities accomplished by following well-defined instructions and procedures”—a category that encompasses everyone from bank tellers to meat-processing workers. The third category of “non-routine manual” jobs are typically low-wage service jobs, “including janitors, gardeners, manicurists” and the like.
And the last 30 years have made it clear how this middle-category has been hollowed out, while the share of low-skilled jobs has surged.
The researchers believe this also explains why we can have a jobless recovery: The permanent destruction of these middle-wage jobs happens predominantly during recessions, when employers are hardest pressed to cut costs. Technology and globalization has made it increasingly easy to replace these routine tasks permanently. And even when the economy picks up again, these jobs don’t come back.