| NEW YORK, April 12
NEW YORK, April 12 More bad news for the middle
class: When the economy recovers, jobs in the middle won't. That
is the conclusion of an important new study that connects a
long-term trend in the labor market with the business cycle of
recession and rebound.
Nir Jaimovich, an economist at Duke University, and Henry E.
Siu, an economist at the University of British Columbia, take as
their starting point one of the most important continuing
changes in Western developed societies. That shift is what
economists, most notably David Autor of the Massachusetts
Institute of Technology, have called the "polarization" of the
job market. Maarten Goos and Alan Manning, extending the
research to Britain, have more colorfully dubbed it the dual
rise of '"lousy and lovely" jobs.
Their point is that, thanks to technology, more and more
"routine" tasks can be done by machines. The most familiar
example is the increasing automation of manufacturing. But
machines can now do "routine" white-collar jobs, too - things
like the work that used to be performed by travel agents and
much of the legal "discovery" that was done by relatively
well-paid associates with expensive law degrees.
The jobs that are left are the "lovely" ones, at the top of
the income distribution - white-collar jobs that cannot be done
by machines, like designing computer software or structuring
complex financial transactions. A lot of "lousy" jobs are not
affected by the technology revolution, either - nonroutine,
manual tasks like collecting the garbage or peeling and chopping
onions in a restaurant kitchen.
An extensive body of economic research has shown that job
polarization is happening throughout the Western developed
world. It accounts for many of the social and political strains
we have experienced over the past three decades, particularly
the increasing divide between the people at the top and at the
bottom of the economic heap, and the disappearance of those in
the middle who were once both the compass and the backbone of
What's new about Jaimovich and Siu's work is that they have
found that job polarization isn't a slow, evolutionary process.
Instead, it happens in short, sharp bursts. The middle-class
frog isn't being gradually boiled; it is being periodically
grilled at a very high heat. Those spurts of change are economic
downturns: Jaimovich and Siu have found that in the United
States since the mid-1980s, 92 percent of job loss in
middle-skill occupations has happened within 12 months of a
"We think of recessions as temporary, but they lead to these
permanent changes," Siu told me. "The big puzzle about business
cycles is, why have we had these jobless recoveries over the
past three recessions? These jobless recoveries are because you
have these middle-skilled jobs that are being wiped off the
Economists are often in the business of collecting empirical
evidence of the trends many of us civilians have long
experienced in our daily lives. That turned out to be the case
when Siu shared his research findings with his family.
"I told my father-in-law, who used to be an executive in the
oil industry," Siu said. "He said: 'That is exactly what
happened. Every vice president had a secretary, then they fired
them during the recession. But after the recession we had to
pair up, and two vice presidents had to share one secretary.'"
Another example may have been hinted at in the March U.S.
jobs report. Those figures showed a decline of 34,000 jobs in
the retail sector despite recent improvements in store sales.
Some economists attributed that apparent mismatch to the power
of technology, in this case e-commerce.
"That is certainly in line with our findings," Siu said.
"Salespeople are one of the prime examples of routine jobs."
The Jaimovich-Siu paper concludes that "jobless recoveries
are evident in only the three most recent recessions, and they
are due entirely to jobless recoveries in routine occupations.
In this group, employment never recovers beyond its trough
level, nor does it come anywhere close to its pre-recession
This is, Siu told me, "a stark finding." David E. Altig, the
research director at the U.S. Federal Reserve Bank of Atlanta,
who has written a blog post about the paper, echoed that view.
"One of the things you certainly note is that this is the mother
of all jobless recoveries," he told me.
Siu urged me not to be too gloomy. "In the broad sweep of
history, technology is good," he reminded me. "We've been
wrestling with this for 200 years. Remember the Luddites."
That is an important point. All of us, even the hollowed-out
middle class, would be much worse off if the Luddites had won
the day and the Industrial Revolution, whose latest wave is the
past three and a half decades of technological change, had never
But it is also true that every seismic shift, including the
current one, has winners and losers. And for the losers,
adapting to today's world of lousy and lovely jobs may be even
harder than it was for the artisans of the Luddite era to thrive
in the Machine Age.
"What might be different today is two factors," Siu told me.
"The pace of technological change is so much faster, and we live
in such a complex society, that it is harder than ever to switch
to a new occupation."
All of us are awaiting an economic recovery. We should be
braced for one that offers scant comfort to the middle class.