The Joplin Globe, Joplin, MO

Business

July 3, 2012

Many midlevel jobs go missing as employment market changes

AUSTIN, Texas — Thirty years ago, around the time Keith Glass walked into his first semiconductor manufacturing facility, most of the operators wore lab coats.

As microchips grew smaller - and their fabrication grew more complex - Glass and his colleagues traded their lab coats for ultra-clean “bunny” suits. Even then, in these factories that rode on the cutting edge of manufacturing technology, it still took humans to move wafers - slices of semiconductor materials - from one machine to the next.

Today, even the bunny suits are dwindling. Glass gets the same question virtually every time he leads a tour of Samsung Austin Semiconductor’s factory: Where are all the people?

“All those old entry-level positions have been replaced by robots,” said Glass, the facility’s curriculum strategist. “An operator position is much higher and more technically advanced than it used to be. That person now sits in front of computer instead of moving wafers by hand.”

Samsung rarely hires anybody with less than an associate’s degree, he said.

The same workforce changes Glass has witnessed in the past three decades have become increasingly symptomatic of a deeper transformation across the country’s middle-tier occupations.

The swath of middle-skills jobs that once supported a robust American middle class has thinned, leading to more polarization of the job market. In the past three decades, middle-skills occupations have dropped from nearly 60 percent of total U.S. employment to about 45 percent, according to research by Massachusetts Institute of Technology economics professor David Autor.

The real bulk of job growth is bubbling up at the ends of the spectrum - in low-pay, low-skill jobs and in higher-wage, highly skilled occupations that more and more often require at least a four-year college degree.

Particularly in comparison with the wide and growing cross-section of the population who possess low- or midlevel skills, the country faces a “hollowing out” of the job market’s middle tier, as MIT’s Autor described it. Though economists debate the severity of the changes, few argue that a mismatch exists - a mismatch that presents a critical economic, social and political challenge.

Definitions of this middle tier can vary, in part because “middle-skills” and “middle-wage” don’t always refer to the same set of occupations. Broadly speaking, though, middle-skills jobs require more than high-school diplomas - whether that’s specialized on-the-job training or formal certifications, such as associate’s degrees. High-skill jobs typically require four-year college degrees.

The rising skills requirements and the evolution of occupations that pay a midtier wage make definitions more difficult to pin down. By most definitions, though, the country faces a dwindling supply of jobs that require a moderate amount of specialized training and pay a middle-class wage.

“It’s a different middle now, and we have to change our thinking about what constitutes the middle,” said Harry Holzer, public policy professor at Georgetown University. “Middle-wage jobs almost all require some sort of post-secondary training, like an associate’s degree.”

Holzer doesn’t see as much hollowing-out as Autor, but he agreed that technology might be the biggest culprit in the contraction of middle-tier jobs. According to Autor’s research, computers and robots have replaced many “routine” tasks, many of them clerical (replaced by information technology) or manufacturing (replaced by robotic technologies).

Employment at the ends of the skills and wages range grew from 1979 to 2009, Autor found. But over the same period, middle-skills jobs dipped to 45.7 percent of total U.S. employment - down from 57.3 percent.

Economic downturns have been especially hard on this middle tier, according to economics associate professors Nir Jaimovich at Duke University and Henry Siu at the University of British Columbia. Since the mid-1980s, they found, 92 percent of the job loss in middle-skills occupations occurred within 12 months of a recession. And jobless recoveries, such as the one the nation is in now, are almost solely due to the disappearance of midtier jobs, they said.

Take Austin, an area that has shown considerable growth. The number of middle-skills jobs in the Texas capital has grown in the past five years, but the number of people whose skill sets align with the demands of those occupations has grown almost three times faster, according to an analysis by John Rees, economic development program manager at the Capital Area Council of Governments.

“We want to recruit and expand our high-wage, high-skill jobs, but that means you have to recruit people,” Rees said. “So are we creating jobs for people who don’t live here while leaving other people who already live here behind? That creates all kinds of social issues.”

The hollowing out of the middle tier has affected virtually every community in the country, said Jon Hockenyos, president of the economic consulting firm TXP.

The concern, he and others said, is the high-end growth might mask critical issues related to the thinning middle. For many Americans, the jobs that once would have afforded a better life for them and their families aren’t coming back. And the new midrange jobs require a different set of skills.

“It’s very hard as a region, particularly in more urban areas, to say we’re not going to go after the Facebooks and the Apples,” said Rees, the council of governments’ economic expert. “People say they want that, and there’s good reason to want that, but there probably needs to be some concurrent focus on providing existing residents the skill set to take those jobs. There seems to be a disconnect there.”

Local employment services experts agreed. The high-tech growth, while of great benefit to the region, doesn’t do much for a growing demographic - often concentrated among ethnic minority populations - who hold a high school diploma or less, said Alan Miller, executive director at Workforce Solutions Capital Area in Austin. In many cases, Miller said, local and state economic development efforts could provide greater benefit if they focus on the middle tier.

“It gets back to which dogs we’re chasing out there,” he said. “Do we have a mixed-strategy approach, or are we just chasing the ends?”

In terms of longer-term growth, health care could become a critical sector for middle-skill jobs. Registered nursing is expected to be by far the fastest-growing occupation in the country by 2020, according to Bureau of Labor Statistics forecasts. The second-fastest group of growth occupations: nursing aides, orderlies and attendants.

“Health care is growing, and that provides a lot of middle-skill-level jobs,” Miller said. “But what we’re trying to look at across industry sectors is even where you have more of the low-skill jobs, trying to identify the career path opportunities that will lead a person from a low-end job up the ladder.”

A robust continuing education and job-training system will play a critical role in the development of a gainfully employed population across the entire socio-economic spectrum, experts say.

Today, a high school diploma barely qualifies for most middle-skill occupations - especially in growing industries such as health care. And formal education, certifications and on-the-job training have become prerequisites for most career-advancement opportunities.

Yet building a more skilled, better-educated workforce solves only half the equation. The large swath of middle-skill workers still needs gainful employment in which they can apply those skills.

“There’s a cost to not developing the economy in a balanced way,” said Chris King, director of the University of Texas’ Ray Marshall Center for the Study of Human Resources. “If you don’t develop a balanced set of jobs with decent pay for families in those jobs, you fall into more participation in public programs. And if employers don’t pay good wages, even employed people do the same.”

Despite his warning, King falls in with the camp of economic experts who argue the shortage of middle-tier jobs, while critical, isn’t as severe or permanent as others suggest. Not only will new middle-skills occupations emerge in health care and other industries, he said, but a growing number of more traditional middle-class jobs will also open up as baby boomers retire. Those include machinists, utility workers and other hands-on, in-person jobs that can’t be automated or offshored.

“They’re not sexy new jobs,” King said, “but they’re good jobs, and many only need associate’s degree” or other post-secondary certification.

King agrees the education and skill level needed to qualify for middle-wage job opportunities has moved beyond the high school diploma. And it’s going to continue to rise.

“It has to,” said Glass, at Samsung. “We don’t make buggy whips anymore.”

 

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