What’s behind the slow job recovery?
Although jobs have been increasing in the past two years, by most measures, the gains have been modest. N.C. State University’s Mike Walden explains the reasons economists give for the slow recovery.
“Well, the traditional answers … − the ones we’ve heard thus far … − have been related to the uniqueness of this recession, the crash of the housing market, the reduction of household wealth and the slow recovery in both of those.
“And actually there’s some new research that suggests there may be another reason for why we’ve had a slow job recovery, and it has to do with the changing nature of jobs: If you look at how the job market has evolved over the last couple of years, it’s really evolved into two parts. We’ve had increases in jobs for those higher-paid, higher-skilled professional jobs. We’ve had increases in the number of jobs for lower-paid, lower-skilled service jobs. But we haven’t had much growth in the middle – those middle-income jobs where you need a little bit of skill. A lot of these were factory jobs, for example. A lot of those have been jobs in sales. And we’ve seen due to technology, a lot of those jobs simply disappeared. Factories are becoming mechanized. Robots are moving into factories. A lot of sales jobs are now being … done with technology.
“So, economists who have gone back and looked at not just this recent recession, but recessions before it, have found this is the trend that we’ve see evolving. So it may not be due to those factors I mentioned before – housing crash, household wealth crash – it may be due to the changing nature of jobs that’s really holding back job growth.”
Category: Economic Perspective