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Job market polarization and U.S. worker skills: A tale of two middles

Views on what is happening to labor demand in the middle of the U.S. labor market are strongly divergent. Many economists argue that the middle is “hollowing out” as a result of digital technologies and globalization that make it easy for employers to replace workers doing routine tasks. But many employers argue they can’t fill the middle-skill jobs they have. My own calculations based on Bureau of Labor Statistics data show that the traditional middle of the job market – composed primarily of construction, production and clerical jobs that require fairly little education – has indeed been declining rapidly. But another set of middle-skill jobs – requiring more postsecondary education or training – in health care, mechanical maintenance and repair and some services – is consistently growing, as are skill needs within traditionally unskilled jobs. Among these are the ones that employers have had trouble filling. While many employers have done little to attract new workers by raising wages or investing in training, some employer reluctance to invest in skill-building on their own makes economic sense; and our educational system has done too little to generate employees with these skills as well. A new set of education and training policies and practices are hopeful in this regard, though policies to more directly expand the numbers of middle-paying jobs might also be needed.