Watchman Newsletter

Your Well-Paid, Middle-Class Job Is in Danger

Market Watch (Link) - Ruth Mantell (June 16, 2011)

The job market is changing, and it’s not just manufacturing jobs that are disappearing. Even some highly-paid workers may find themselves needing to re-tool their skills in the years ahead.

The ongoing movement of jobs to countries where labor is cheaper, plus the development of new technologies, may mean fewer opportunities for some well-paid positions in the U.S. over the next decade, said Larry Katz, an economist at Harvard University.

“Employment growth has stopped, or even declined, among many middle- class jobs that are high wage” and don’t require a college degree, Katz said.

“A lot of traditional middle-class, upper-middle-class jobs have been disappearing. If you look at general managers and middle-management jobs, those are ones that have been in decline and will decline further,” he said.

Workers making about $40,000 to $80,000 a year constitute the bulk of labor costs for many companies, and these workers may be on the chopping block, said Jeffrey Joerres, chief executive of ManpowerGroup, a Milwaukee-based staffing services firm.

“That’s your middle class,” Joerres said. “Companies are finding ways to reduce the number of people in those areas, and change the jobs to make them more simple, to reduce the skill that is required.”

Changes in the health-care field

Kevin Hallock, director of the Institute for Compensation Studies at Cornell University, cited radiologists as an example of a well-paid worker that could be hit by technology and cheap global labor.

“I suspect that we will see fewer radiologists in the U.S. than we have in the past since I understand there is little reason for a radiologist to be in the same place as a patient,” Hallock said. “A radiologist can read a Terre Haute X-ray as easily in India as she can in Indiana.”

However, fewer opportunities do not necessarily translate into the disappearance of an entire field.

“A lot of medical diagnostic work will be done overseas. You can have the initial diagnostic done elsewhere, and have a domestic supervising physician,” said David Autor, an economist at Massachusetts Institute of Technology.

“Medical costs are a huge issue, and there’s enormous incentive to find ways to reduce these costs. The internationalization of medical services will be one of the important ways that costs will potentially be slowed,” he said.

Software can also cut down on workers needed to sort through paperwork, such as legal documents, Autor said.

“You digitize all of those documents, and a piece of software reads them and catalogs them,” Autor said. “There is a lot of legal work that is essentially increasingly subject to automation, and that will affect the opportunity set for lawyers.”

Computer programming is also becoming a commodity, Katz said.

“What used to be good programming jobs, or routine legal work, these are things that are easily broken into parts, and done in other places,” Katz said.

Good news, for some

However, not all is doom and gloom. Among the 20 fastest growing occupations from the U.S. Labor Department’s employment projections for 2008 to 2018, 11 earn at least $10,000 more than the national annual median wage of $32,390 in May of 2008.

Examples of these workers are biomedical engineers, network systems and data communications analysts, and financial examiners.

Meanwhile, more than half of the 20 occupations with the fastest projected decline � think sewing machine operators, photographic processing machine operators and file clerks � were below the national median wage.

Here are the 10 fastest growing occupations from 2008 to 2018, and their median wages, according to the Labor Department:

  • Biomedical engineers, median wages of $77,400
  • Network systems and data communications analysts, $71,100
  • Home health aides, $20,460
  • Personal and home care aides, $19,180
  • Financial examiners, $70,930
  • Medical scientists, except epidemiologists, $72,590
  • Physician assistants, $81,230
  • Skin care specialists, $28,730
  • Biochemists and biophysicists, $82,840
  • Athletic trainers, $39,640

Here are the 10 fastest declining occupations:

  • Textile bleaching and dyeing machine operators and tenders, $23,680
  • Textile winding, twisting, and drawing out machine setters, operators, and tenders, $23,970
  • Textile knitting and weaving machine setters, operators, and tenders, $25,400
  • Shoe machine operators and tenders, $25,090
  • Extruding and forming machine setters, operators, and tenders, synthetic and glass fibers, $31,160
  • Sewing machine operators, $19,870
  • Semiconductor processors, $32,230
  • Textile cutting machine setters, operators, and tenders, $22,620
  • Postal Service mail sorters, processors, and processing machine operators, $50,020
  • Fabric menders, except garment, $28,470

Adaptation is key

Workers with diminishing prospects will need to evolve, experts said.

“Lots of people can transform themselves,” Katz said. “People with a good set of flexible skills will be able to adapt. Creativity and flexibility will continue to be greatly valued. People with a certain specific set of vocational skills are going to have a tougher time without some new training.”

While technology may replace some workers, it also creates opportunities to use new skills.

“Some types of engineers won’t be doing the type of engineering they are doing now if someone comes up with a technology that makes what they do obsolete,” Hallock said. “But they are likely to do something related.”

To succeed, a worker should “be an active learner,” Manpower’s Joerres said.

“Taking on responsibility for invention and innovation gives you a better chance of remaining in a position than the person to your right or to your left,” Joerres said. †

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