Middle-Class Job Opportunities Shrink As the Skills Gap Grows

Middle-Class Job Opportunities Shrink As the Skills Gap Grows

American politicians like to talk about the threat of the “disappearing middle class”—and if a new CareerBuilder study is correct, they are right:

The U.S. economy is expected to add 7,232,517 jobs over the next five years — a 5 percent increase — but a new study from CareerBuilder and Emsi shows that workers in middle-wage jobs may not find as many opportunities. High-wage and low-wage occupations are each projected to grow 5 percent from 2016 to 2021, but middle-wage jobs are only estimated to grow 3 percent. At the same time, 61 percent of the 173 occupations expected to lose jobs over the next five years are in the middle-wage category. …

For the purpose of this study, CareerBuilder and Emsi defined low-wage jobs as those that pay $13.83 per hour and below; middle-wage jobs earn $13.84 – $21.13 per hour; and high-wage occupations make $21.14 per hour and higher.

The study zooms in on a number of high-, middle-, and low-wage occupations in which employment is likely to increase or decrease the most by 2021. Among the biggest losers are low-wage workers like door-to-door salespeople, street vendors, and sewing machine operators, but other low-wage jobs like home health aides and restaurant cooks are expected to grow. Among the middle-wage occupations CareerBuilder expects to shrink the most are printing press operators, farmers, and ranchers.

This fits with the overall picture of the US’s recovery from the Great Recession: an economy that is growing overall, but a middle class that is struggling as wages—and wage earners—become increasingly polarized. Historically, jobs that paid well but required relatively little education or specialized training were the foundation of the “American dream,” and thus, the American middle class. Today, these jobs are increasingly outsourced or automated, leaving America’s traditional middle-class workers with no job prospects in their industries and lacking the skills to compete for the higher-paying opportunities that do exist and are even multiplying (the CareerBuilder survey shows that the occupations with the greatest growth potential in the coming five years are high-wage jobs in tech fields). It’s a problem for employers, too, who can’t find workers with the skills they need among this pool of job seekers. The result: a polarized economy and a widening skills gap.

This trend is not new. A study by 24/7 Wall Street earlier this year also identified many traditional middle-class jobs, such as bill collectors and bank tellers, that are likely to become scarcer in the coming years, and explained why these jobs are disappearing:

A low educational requirement and a lack of specialization means these jobs are much more accessible. However, this also means workers in these fields tend to be poorly compensated. The typical worker in the vast majority of the fastest disappearing middle-skill jobs has an annual salary of less than $40,000. Another significant downside to these low-skill jobs is that a lack of specialization typically translates to a greater exposure to replacement by new technology. The now-widespread use of computers and the Internet for commerce and communication has resulted in hundreds of thousands of layoffs, from the post office to brick-and-mortar retailers.”

The result is what has been described as the “hollowing out of the middle class,” a phenomenon first observed more than ten years ago that has only accelerated during and after the recession. Though some jobs that can support a middle-class lifestyle without extensive education or technical training are currently protected from outsourcing and automation (in the health care sector, for instance), many such jobs are those most vulnerable to these trends.

As technology and the labor market changes, workers will need new skills to compete in the rapidly changing workplace. Employers need this too, at the same time demand for low skilled work dries up companies struggle to find candidates who do possess the skills they need. This challenge has been particularly acute in the market for tech talent, where demand significantly exceeds supply and where universities are failing to produce enough qualified graduates to bridge the skills gap and address the current talent shortage.

This situation puts the onus on businesses to “re-skill” their employees so that they remain relevant and employable: A dramatic example of this is AT&T’s warning to employees earlier this year that if they don’t devote five to ten hours a week to self-directed learning, they may find themselves obsolete. Other employers have taken a more hands-on approach, through apprentice programs and other innovative learning strategies. Whatever course they choose, a consensus is emerging that employers need to do more to prevent their employees from getting left behind in an environment of rapid change. As the World Economic Forum put it in a report on “the Future of Jobs” this January:

To prevent a worst-case scenario—technological change accompanied by talent shortages, mass unemployment and growing inequality—reskilling and upskilling of today’s workers will be critical. While much has been said about the need for reform in basic education, it is simply not possible to weather the current technological revolution by waiting for the next generation’s workforce to become better prepared. Instead it is critical that businesses take an active role in supporting their current workforces through re-training, that individuals take a proactive approach to their own lifelong learning and that governments create the enabling environment, rapidly and creatively, to assist these efforts. In particular, business collaboration within industries to create larger pools of skilled talent will become indispensable, as will multi-sector skilling partnerships that leverage the very same collaborative models that underpin many of the technology-driven business changes underway today.