Future hiring will mainly benefit the high-skilled

By Associated Press
Posted Sep. 7, 2010 at 9:49 a.m.

Whenever companies start hiring freely again, job-seekers with specialized skills and education will have plenty of good opportunities. Others will face a choice: Take a job with low pay — or none at all.

Job creation will likely remain weak for months or even years. But once employers do step up hiring, some economists expect job openings to fall mainly into two categories of roughly equal numbers:

– Professional fields with higher pay. Think lawyers, research scientists and software engineers.

– Lower-skill and lower-paying jobs, like home health care aides and store clerks.

And those in between? Their outlook is bleaker. Economists foresee fewer moderately paid factory supervisors, postal workers and office administrators.

That’s the sobering message American workers face as they celebrate Labor Day at a time of high unemployment, scant hiring and a widespread loss of job security. Not until 2014 or later is the nation expected to have regained all, or nearly all, the 8.4 million jobs lost to the recession. Millions of lost jobs in real estate, for example, aren’t likely to be restored this decade, if ever.

On Friday, the government said the August unemployment rate ticked up to 9.6 percent. Not enough jobs were created to absorb the growing number of people seeking work. The unemployment rate has exceeded 9 percent for 16 months, the longest such stretch in nearly 30 years.

The crisis poses a threat to President Barack Obama and Democrats in Congress, whose hold on the House and Senate appears to be at increasing risk because of voter discontent.

Even when the job market picks up, many people will be left behind. The threat stems, in part, from the economy’s continuing shift from one driven by manufacturing to one fueled by service industries.

Pay for future service-sector jobs will tend to vary from very high to very low. At the same time, the number of middle-income service-sector jobs will shrink, according to government projections. Any job that can be automated or outsourced overseas is likely to continue to decline.

The service sector’s growth could also magnify the nation’s income inequality, with more people either affluent or financially squeezed. The nation isn’t educating enough people for the higher-skilled service-sector jobs of the future, economists warn.

”There will be jobs,” says Lawrence Katz, a Harvard economist. ”The big question is what they are going to pay, and what kind of lives they will allow people to lead? This will be a big issue for how broad a middle class we are going to have.”

On one point there’s broad agreement: Of 8 million-plus jobs lost to the recession — in fields like manufacturing, real estate and financial services — many, perhaps most, aren’t coming back.

In their place will be jobs in health care, information technology and statistical analysis. Some of the new positions will require complex skills or higher education. Others won’t — but they won’t pay very much, either.

”Our occupational structure is really becoming bifurcated,” says Richard Florida, a professor at University of Toronto. ”We’re becoming more of a divided nation by the work we do.”

By 2018, the government forecasts a net total of 15.3 million new jobs. If that proves true, unemployment would drop far closer to a historical norm of 5 percent.

Nearly all the new jobs will be in the service sector, the Labor Department says. The nation’s 78 million baby boomers will need more health care services as they age, for example. Demand for medical jobs will rise. And innovations in high technology and alternative energy are likely to spur growth in occupations that don’t yet exist.

Hiring can’t come fast enough for the 14.9 million unemployed Americans. Counting part-time employees who would prefer full-time jobs, plus out-of-work people who have stopped looking for jobs, the number of ”underemployed” is 26.2 million.

Manufacturing has shed 2 million jobs since the recession began. Construction has lost 1.9 million, financial services 651,000.

But the biggest factor has been the bust in real estate. The vanished jobs range from construction workers and furniture makers to loan officers, appraisers and material suppliers. Moody’s Analytics estimates the total number of housing-related jobs lost at 2.4 million. When you include commercial real estate, the number is far higher.

One of them is Martha Escobar, who last month lost her $13.50-an-hour job cleaning an office tower owned by JPMorgan Chase & Co. in Century City, Calif. She was one of 16 janitors, mostly single mothers, who lost jobs as part of the real estate crunch that’s squeezed landlords.

Some of them traveled to New York on Thursday to try to pressure JPMorgan to get its cleaning contractor to take them back, given that the bank earned $8.1 billion during the first half of this year.

”I don’t know what I am going to do if I can’t get my job back,” Escobar, 41, said.

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  1. ardeleanu Sep. 7, 2010 at 10:46 a.m.

    I already have my low-pay job(s). However, I am highly skilled, just not in the stuff that’s in demand these days. Anyone want an accordionist who can speak Slovak, Polish & Serbian, sing in over a dozen languages and who can also arrange and orchestrate Central and Eastern European folk music? Didn’t think so. See you in the food stamps line.

  2. ray Sep. 7, 2010 at 11:06 a.m.

    Since WHEN were lawyers “highly skilled”? Skilled, but HIGHLY skilled? I would argue higly educated…LOTS of education. And, with all of the lawyer lay-offs, why would legal hiring INCREASE? Hey, AP, did you do ANY research on this? Apparently your writers aren’t so “highly skilled”, so you should pay them less.

  3. bumsteer Sep. 7, 2010 at 11:26 a.m.

    Lots of misinformation here like many articles painting a broad brush. Skilled blue collar work like machine tools, automation, etc. has demand that exceeds the availability of trained candidates.

    Lawyers, yes, lots of shrikage there in that market. And software engineering is subject to the wage deflation caused by H1-B fraud and off-shoring, so this article is pretty wrong and misleading.

    But be sure to talk to a Harvard economist for your information. They’re so far removed from reality its not funny, especially if people read something like this and make life decisions based on these type of pieces.

  4. JOHN C Sep. 7, 2010 at 11:50 a.m.

    These companies would rather bend a quarter than hire an American, I say boycott them all, just buy food and private education and save your money

  5. billyjoe Sep. 7, 2010 at 11:51 a.m.

    Weird to contemplate that the need for specialized work skills is occurring at the same time many folks–especially the teabagger crowd–are hard at work bashing education, educators, and just plain being educated!

  6. John in Glenview Sep. 7, 2010 at 9:30 pm

    “software engineers”


    From the NYT today:

    Once a Dynamo, the Tech Sector Is Slow to Hire

    “These higher skills have become commodities, said Catherine L. Mann, a global finance professor at the Brandeis University International Business School who studies the outsourcing of jobs. The programming language “C++ is now an international language,” she said. “If that’s all you know, then you’re competing with people in India or China who will do the work for less.”