U.S. middle-skill jobs struggle to come back -NY Fed

NEW YORK Wed May 21, 2014 12:55pm EDT

NEW YORK May 21 (Reuters) - Millions of U.S. teaching, construction and other middle-skill jobs lost in the last recession have not returned, exacerbating the already high unemployment that has been a drag on the U.S. recovery, New York Federal Reserve officials said on Wednesday.

These middle-skill jobs, which pay roughly $25,000 to $50,000 annually, suffered the heaviest losses in the past three downturns when compared with high-skill and lower-skill counterparts, they said at a press briefing on current labor conditions in New York, northern New Jersey and Puerto Rico.

"A feature of the Great Recession and indeed the prior two recessions, is that middle-skill jobs that were lost don't all come back during the recoveries that follow," New York Fed President William Dudley said in a speech.

From 2007 to 2010, U.S. employers slashed 9.3 percent of middle-skill jobs as companies coped with falling sales and local governments faced ballooning deficits, a New York Fed study released on Wednesday showed based on federal jobs data.

Since the start of the recovery, middle-skill jobs have increased 1.9 percent.

In comparison, higher-skill and higher-paying occupations in law, finance and medicine have grown 7.8 percent on top of the 1.0 percent gain during the recession.

Lower-skill and lower-paying jobs in food and other services industries recovered 6.0 percent in 2010 to 2013 following a 2.6 percent decline.

"The middle (skill jobs) tends to shrink away," said Jaison Abel, a senior economist at the New York Fed who co-wrote the regional jobs study with Richard Deitz. "Technology and globalization are driving this trend."

At the end of 2013, middle-skill jobs made up 49 percent of all U.S. jobs, down from 52 percent in 2007. This three-point drop is equivalent to five million jobs at this level which have disappeared, according to Abel.

On a regional basis, New York City has led the job recovery, adding workers on top of recouping all the jobs lost during the recession. Northern New Jersey and upstate New York have lagged New York City while managing to recover many of the jobs lost.

However, Puerto Rico's labor market has continued to struggle, the New York Fed study showed. (Reporting by Richard Leong; Editing by James Dalgleish)

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