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Home Publications Blogs Beat the Press Is the Recovery Leading to More Job Polarization?

Is the Recovery Leading to More Job Polarization?

Saturday, 07 June 2014 07:50

That's what the Washington Post told readers.

"Unemployment fell from 3.3 to 3.2 percent for people with a bachelor's degree or more, and from 5.7 to 5.5 percent for those with some college. But it actually rose from 6.3 to 6.5 percent for people with only a high school diploma, and from 8.9 to 9.1 percent for those without one.

"In other words, our polarized labor market isn't getting any less so. The Cleveland Fed points out that routine jobs disappeared during the Great Recession, and haven't come back during the not-so-great-recovery — which partly explains why our economic upswing, such as it is, has been much less dramatic for the least educated."

The data doesn't necessarily agree with this story. If we ignore monthly changes, since these are extremely erratic, and instead look at the changes over the last two years we see that the unemployment rate for college grads in the first five months of 2014 averaged 3.3 percent, down 0.8 percentage points from its 4.1 percent average in the first five months of 2012. By comparison, the unemployment rate for those with just a high school degree averaged 6.4 percent, down by 1.8 percentage points from two years ago. Those with less than high school degrees saw a drop in their unemployment rate of 2.5 percentage points from 12.9 percent in 2012 to 9.4 percent in the first five months of this year.

If we go back to 2010 we see a comparable pattern. The drop in the unemployment rate from the 2010 peaks was 1.5 percentage points for college grads, 4.3 percentage points for high school grads, and 5.6 percentage points for those without a high school degree. The declines in unemployment rates in percentage terms were actually larger for less-educated workers than for college grads. But hey, why let the data get in the way of a good story?

Comments (9)Add Comment
An Old Story
written by Larry Signor, June 07, 2014 9:46
If one believes the data (I don't), WaPo is off the tracks. If one thinks the data are sketchy and do not capture the scope of the problem (my position) the WaPo never left the station with this entertaining BS. I am somewhat bored with the story that formerly intelligent workers are too stupid to hire now.
written by JDM, June 07, 2014 10:58
I'm sure the reason behind these stories' mistakes is that they just don't pay much attention to the problems of people they think of as not like them. And since all or most of the people involved in doing and publishing these stories are college-educated and know mostly college-educated people, the lack of jobs story for non-college people is a big so what to them. It's only when it hits closer to home that they wake up, so the problem seems bigger for those closer to home.
I'd say the recovery stinks
written by ifthethunderdontgetya™³²®©, June 07, 2014 11:33
for workers, but is great for the rentier class.
data uhg
written by James, June 07, 2014 12:11
Hello Dean. If we are going to clean up the reporting we would have to look at wages across multiple categories and correct for U6 and increases in disability.

Also the demographics on retirement and fluxes in the stinking illegal border crossing under the table.

I wannna talk crazy high taxes. I am starting a small business C corp and the tax rate is a ridiculous 57% out here in Clownifornia. That is if I funnel the money to myself and don't get double taxed too much.

Like all the fallacious discussions of minimum wage with out discussing the rest of the tax/welfare benefit discussion.. you normally do better than this.
57%? really?
written by JDM, June 07, 2014 2:53
Sounds high, James. How does that add up? Because I don't see how it does even using the top marginal rates nationally added to California's top marginal rate (and of course the top marginal rate is not the tax rate paid overall).
57% at JDM
written by James, June 08, 2014 9:57
Hello JDM,

Take a look at the tax tables.
28% for Income taxes, not even highest bracket
15.3% Self employment taxes (You can check on SS/Med)
10% California income taxes

Then, if you don't do things just right, you pay taxes on the corporate income as well.

If your family is in the 90-250k income range you get hammered. Cept you might have some write offs on necessary expenditures.

Except, I guess you nutbags feel like business expenses are a perk or something like that. There are a few deductions, but, other fees and taxes on top. It is goddamn brutal.
written by JDM, June 09, 2014 9:37
28 +15.3 + 10 does not reach 57. I hope your business model does not require basic arithmetic. :). And of course these are marginal rates, which means the actual tax bill you face is less than those numbers.
Recovery from the Great Recession
written by kay, June 09, 2014 6:05
It is unfortunate, if not unforgivable, to forget that the Iraq War and the jacked up "National Security State," contributed mightily to the GDP and employment during the Bush years, just like it did during Reagan's presidency. With some military downsizing taking place currently -- winding down of Iraq and Afghanistan -- and Europe especially in the doldrums, this economy ain't going nowhere.
written by James, June 20, 2014 10:35
Not that anyone cares but I left out some of the unemployment insurance numbers that give you the 57%

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.