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Home Publications Blogs Beat the Press The Disappearing Middle is a Cover-up for Bad Economic Policy Coming from the Top

The Disappearing Middle is a Cover-up for Bad Economic Policy Coming from the Top

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Thursday, 18 April 2013 13:41

Thomas Edsall relies on some research which unfortunately in many cases is a bit dated to discuss the idea that middle wage jobs in the United States are disappearing due to technology. While there was some evidence that middle wage occupations were dwindling in the 1990s, this was reversed in the last decade. In that decade there were declines in employment shares for all but the lowest paying occupations. Since we saw the same pattern of wage polarization, with more income going to the top, in the 2000s and 1990s, this would seem to indicate that the loss of middle wage jobs was not the story in the 1990s either.

In considering the recent pattern of job growth the proliferation of low-paying jobs is most obviously explained by the weak economy. The economy also generates lots of bad jobs, however in a healthy labor market most people don't take them. It is only when people have no other job options that take these low-paying jobs. Therefore the fact that a disproportionate share of the jobs created in the last 5 years are low-paying jobs is best explained by the fact that the economy is not creating very many jobs.

The piece also notes the shift of manufacturing jobs to China. This is not a result of inevitable globalization, but rather a policy decision to put manufacturing workers in direct competition with low-paid workers in the developing world, while maintaining or increasing protectionist barriers that allow doctors, lawyers, and other highly paid professsionals from avoid similar competition. The United States has also further disadvantaged manufacturing workers by pursuing a high dollar policy that makes it more difficult for them to compete internationally.

There is little reason to believe that there is anything inevitable about the loss of wages by middle class workers. Rather this is primarily a policy driven outcome.

Comments (5)Add Comment
Multitasking Skills Predicted to Rescue Middle Class From Economic Doom
written by Last Mover, April 18, 2013 5:13
In a long and rambling article by Thomas Edsall presumably about why the good jobs are gone or not is this from David Autor:

The middle-skill jobs that are likely to grow, Autor says,

'will combine routine technical tasks with the set of non-routine tasks in which workers hold comparative advantage—interpersonal interaction, flexibility, adaptability and problem solving. Medical para-professions are one leading example of this virtuous combination, but this example is not a singularity. This broad description also fits numerous skilled trade and repair occupations—plumbers, builders, electricians, HVAC installers, automotive technicians—marketing occupations, and even modern clerical occupations that provide coordination and decision-making functions rather than simply typing and filing.'


Who woulda thunk it? The harried middle class now juggling everything from multiple underemployed jobs to unemployment to foreclosure to bankruptcy to no health care to hours on the phone and internet dealing with these problems has actually been acquiring the very multitasking skills that will qualify them for the good jobs that will rescue the middle class from permanent economic doom.

Keep your chin up America. There's more work to come and it ain't just filing and typing.
...
written by urban legend, April 18, 2013 11:13
". . . a policy decision to put manufacturing workers in direct competition with low-paid workers in the developing world, while maintaining or increasing protectionist barriers that allow doctors, lawyers, and other highly paid professsionals from avoid similar competition."

You need to flesh this formulation out a bit, Dean. The fact that policy may have prevented competition for professionals does not establish that avoidable policy is responsible for the competition that workers face. What are those policies, and how practically could they be different?
Unproductivity?
written by Philip F., April 19, 2013 2:26
Looking at the productivity numbers from BLS:
http://data.bls.gov/timeseries...aphs=true

...it's easy to see the rise in productivity directly after the recession hit, but after that big jump, it's kind of touch and go. We may have reached a limit where at current technological and educational levels, it doesn't seem feasible to reap productivity gains without extra investment in labor, education, or realizing some other new means?

I keep wondering when the combination of wage inflation in China, and improved domestic crime issues in Mexico might result in a big move of manufacturing to Mexico?
...
written by Ellis, April 19, 2013 10:14
Gee, I wonder why "middle income" jobs are disappearing, and why "the economy" is not creating a lot of jobs.
Economists, like Dean Baker, tell us to blame government officials, who seem to be making more "mistakes" lately. But maybe something else is going on. Maybe the problem is who has the power in this society. Maybe the people who do the actual hiring and firing have found that the more they are able to exploit their workforce, the higher their profits are and the more their wealth grows. And maybe those very wealthy people are also the ones who tell the officials who run the government what to do. So, the government pursues the same policy.
Just wondering....
EoLL
written by Bakalite, April 21, 2013 1:33
urban legend - You would be well-served by reading Mr. Baker's excellent, informative book "The End of Loser Liberalism," as it answers your question. Many of the ideas he presents on this blog are abbreviated versions that he goes into in more depth in the book.

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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.

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