What happened to middle-wage jobs? This is a question that can be seen on dozens of news article headlines across the country. Although the economy is growing, the types of occupations that have returned since the recession have been uneven. A troubling aspect of employment growth over the past decade has been the decline of middle-wage jobs combined with the explosion of low-wage professions. What is clear is that there has been an overall decline and marked slowing in growth of these middle-wage occupations, especially following the Great Recession. Since 2008, middle-wage occupations – earning roughly $30,000 to $60,000 - have grown the slowest. In 2016, low-wage occupation employment was almost double the size of middle-wage employment. High-wage occupations have grown the fastest since the trough of the recession, gaining over 60,920 (14.0%) jobs, yet, low-wage employment has grown the most since 2010, adding over 171,550 jobs.
Low and middle-wage occupations declined rapidly following the recession. In 2012, middle and low-wage jobs hovered around 8% and 10%, respectively, below what they had been five years earlier. However, since that time, low-wage jobs have accounted for much of the job growth in the state, while middle-wage jobs have leveled off. The chart below shows the employment change by wage groups since the start of the recession.
In 2016, middle-wage occupations accounted for just over 40% of the total employment in the state. The share of employment in middle-wage occupations has shrunk over time. In the past 8 years (2008 to 2016), the share of middle-wage occupations has declined a full percentage point, from 41.6% to 40.6%, while the high-wage occupation share has increased from 12.7% to 13.8%. Some of the largest occupations in the middle-wage category include Registered Nurses, Heavy and Tractor-Trailer Truck Drivers, and Sales Representatives, but as a group this category is quite diverse. Some middle-wage jobs are in the first-line supervisory positions and require previous work experience; however, most of these jobs often require some post-secondary education or training. These positions most notably require more Postsecondary nondegree awards compared to low- or high-wage occupations. Roughly 60% of occupations in this wage group require a High School Degree or no formal education. On the contrary, high-wage occupations typically require at least a Bachelor’s or Graduate Degree while low-wage occupations usually need little to no education or training.
Comparing the employment growth before and after the recession by different wage groups provides a good insight into the Great Recession’s impact on middle-wage jobs. To highlight the lack in middle-wage occupation recovery, the chart below shows changes in occupational employment for 2008-2010 – when most of the job loss was sustained – and 2010-2016 – when jobs should have returned. Middle-wage occupation employment declined substantially following its peak employment, having been hit the hardest from 2008 to 2010. These middle-wage occupations have yet to recover from their pre-recession levels, and are still 1.6% below 2008. Additionally, high-wage occupations have seen substantial growth since 2010, growing 14.0% post-recession.
The declining share of middle wage jobs is projected to continue into the next decade. Based on the most recent North Carolina Occupation Projections, middle-wage occupations are expected to grow the slowest through 2024. Over this period, middle-wage occupations are projected to grow by 11.2% (just over 140,000) whereas low-wage and high-wage are projected to increase by 12.1% and 15.8%, respectively. Low-wage occupations are projected to grow by more than 250,000, making up the bulk of employment growth in the North Carolina economy.
The growing discussion of the decline in middle-wage jobs hits home for North Carolina. Job polarization is abundantly clear as middle-wage jobs took a beating during the Great Recession and have yet to return. On the other hand, high-wage occupations have grown substantially, and low-wage jobs have seen moderate, albeit slower growth than their high-wage counterparts. If this polarization continues, it could create substantial economic and social strains on North Carolina’s economy. The stratification in job growth speaks to the growing inequality that has become a staple in current economic analysis.
A quick google search for “decline of the middle wage” returns several articles from Pew Research, the New York Times, Forbes, the Washington Post, CityLab, and other news sources detailing this, and similar, topics.
To distinguish between high, middle, and low-wage occupations, this article utilizes the BLS reported Median annual wages for May 2016. Occupations were grouped accordingly: low-wage ($30,000 or less), middle-wage ($30,001 to $60,000), and high-wage ($60,001 or more). These wage levels were chosen based on previous research performed by the New York Federal Reserve Bank, as well as comparing wage percentiles, employment distributions, and occupation distribution of recent OES data.
The OES survey is designed to produce estimates by combining six semi-annual panels of data collected over a 3-year period. OES data reported here represent three-year averages ending in May of each reported year. For example, the 2016 estimate combines panels from November 2013 through May 2016.
This article differs from previous LEAD research focusing on another type of job polarization between routine, nonroutine, cognitive, and manual types of work. Although these findings can certainly be blended together as middle-wage jobs typically entail the same types of occupations found in the routine-manual class which has been declining over the past two decades.
Per the BLS: “Postsecondary nondegree award. These programs lead to a certificate or other award, but not a degree. The certificate is awarded by the educational institution and is the result of completing formal postsecondary schooling. Certification, issued by a professional organization or certifying body, is not included here. Some postsecondary nondegree award programs last only a few weeks, while others may last 1 to 2 years.”