9

The future of jobs: An hourglass economy?

Job seekers line up to attend the a job fair in New York City.

To view this content, Javascript must be enabled and Adobe Flash Player must be installed.

Get Adobe Flash player

Kai Ryssdal: Seems to me if we're going to talk a lot about jobs today, we'd do well to set the stage a bit. So here you go: 13.9 million people are unemployed in this country. About half of them have been looking for work for more than a year. Eight and a half million are part-timers -- not by choice, they'd rather work more but can't get the hours. Three million are what Bureau of Labor Statistics calls marginally attached -- they want to work and are available but can't find anything. About half of that group has stopped looking all together. And that's only the folks on record with the official census.

Marketplace Scott Tong has spent some time this year looking at the future of jobs. Hey Scott.

Scott Tong: Hello Kai.

Ryssdal: So Scott, remind us how big is the jobs hole and what does it look like?

Tong: It looks a little like the number 12, and here's what that means: By one measure, we need to create 12 million jobs in the U.S. economy to get back to pre-recession levels. And at a pace of about 200,000 new jobs per month, which is actually pretty good compared to what we've seen, it would take 12 years. So call it whatever you want -- that's quite a hole. But here's what economists call the structural thing here: The jobs of tomorrow that we're hopefully going to create will probably not look like yesterday's jobs. A lot of labor economists say we've lost jobs in the middle, that is, that require middle skills, say they have a high school education but maybe not a full college degree, and they command middle wages.

Economist David Autor over at MIT says these jobs involve what a lot of what he calls "routine": You attach a windshield on a car in a factory over and over again; you're a bank teller; you're a typist. Those jobs, he says, are gone for good.

David Autor: It raised the possibility that there will be missing rungs in the career ladder, if you will. If you think about good blue-collar production jobs or office administrative support jobs, those were often career occupations. They were things that offered stability and certainly a sustainable standard of living.

Ryssdal: Let me ask you this, though, Scott, and it's basically technology replacing people instead of lower-wage workers overseas, and I get that. But the big question this week is how did we get here? What happened that made this change come?

Tong: This is the long story: Technology giveth, technology taketh away. It goes all the way back at least 200 years to England, when mechanical looms threatened human weavers, and we all get 10 points for remembering those are the Luddites. And in the American South, technology and railroads and electricity took good jobs from the Northeast -- the expensive Northeast -- to the cheaper South. Today, of course, we have the Internet technology, which challenges the old school middleman and the salesman, of course. Many say the big change began in the '91 recession, when lots of these routine jobs in the middle didn't come back when the economy came back. And now this is looking like the third straight recession that looks like that.

Ryssdal: So here's the question for the next year in American politics: Where does job growth come from? How do you do that?

Tong: Labor economists look at what they see now, and they see growth at the top: as the doctors, software writers, petroleum engineers. And a lot of them at the bottom: home health care aides, dog walkers, people who mow lawns -- the bottom of the income scale, and there are a lot of people who are chasing those jobs, so those wages aren't going to go up very quickly. We risk oversimplifying, but a lot of people describe it as an hourglass economy, and that's going to be what it kind of looks like for a while.

Ryssdal: What do you do then, Scott?

Tong: Well this is where we collide into politics. Many say we invest in education because there's a lot of numbers that say a bachelor's degree translates into a big and increasing wage premiums, is what they call it. A lot of countries are investing public dollars into new sectors where they hope a lot of these jobs in the middle are -- biotech, clean tech, infrastructure -- to shore up some of these jobs and create new ones going forward.

Ryssdal: Ambitious government programs at a time when government is getting less ambitious.

Tong: And that's the question. There are a lot of programs, a lot of tax incentives that try to create these things, but we're in a budget environment where, you know, those tend not to be on the table. So tough calls going forward.

Ryssdal: Scott Tong on the jobs picture for us. Scott, thanks a lot.

Tong: You're welcome.

Roxy Deaton's picture
Roxy Deaton - Aug 19, 2011

@Sam,

It is so cute the way you typed "do I DESERVE the money that I'm making?" At the top, of COURSE you deserve it, else why would you be there?

Here is a different take from PBS on the wealth inequality in this country: http://tiny.cc/6zbzp

I think the key thing is that moral hazard is removed from our equation: someone from the banks/financial institutions/other financial players did something that f'ed all of us. Have they paid the price? No, they were PAID a price - bonus for success, bonus for failure!

Moral hazard gone, eventually "eat the rich" will be all the rest of us CAN do.

Someone I know went to a country in S. America (I can't remember which one, my bad.) She came back and said she thought she had seen the future of America: rich people with armed guards outside their walled villas, afraid to go out. What a life.

Patrick Farnsworth's picture
Patrick Farnsworth - Aug 17, 2011

Come on, fellow commenters! Wealth redistribution? Imbalance in productivity and reward?

They already have answers for these problems - communism/socialism!

The only sustainable solution is to lessen the regulatory burdens on employers. Companies are moving jobs out of the U.S. due to tax structure and regulatory burden. Companies can move jobs outside the U.S, pay comparable or even higher wages, and still have significantly lower overall costs due to less government intrusion. Even Jeffrey Immelt, GE CEO and head of Obama's "Jobs Council," has shipped thousands of jobs overseas.

Wealth redisbribution and increased regulation will only drive more employers away.

Sam Mandke's picture
Sam Mandke - Aug 17, 2011

It seems that an "hour glass" economy is unsustainable, namely because the support for the top always comes from the bottom. I think this economy is characterized by an imbalance in productivity and reward: top earners actually produce less in the economy, but are overcompensated for their efforts (e.g., corporate executives, particularly Wall Street, which many an academic study has now shown their efforts to have rather minimal impacts on their company's performance), and bottom earners produce more, but are compensated much less for their actual productive contributions. Many a middle class job has been eliminated primarily because, as stated, it no longer was productive in light of new technology or changing social dynamic. Really, what we should all be asking ourselves, from on high and to the bottom, what is the value of the work that I am doing? And, particularly at the top, do I DESERVE the money that I'm making?

Money for money' sake is where our values stand, and until we look beyond the money, we will not be able to repair the structural problems with our economy.

Patrick Furlong's picture
Patrick Furlong - Aug 17, 2011

Scott Tong's math is a bit off. At the rate of 200,000 new jobs per month, it will take five years, not twelve, to reach 12,000,000 jobs. Five years is still a long time, but it's less than half as long as twelve.

Ben Gregg's picture
Ben Gregg - Aug 17, 2011

H-1B's aren't the problem. Even if you closed the door to all foreign technical labor and only looked for talent in the U.S., you wouldn't fill the jobs hole. You also wouldn't find the people you need! Thus, H-1B visas are not the problem, they're the symptom of the fact that so few people are willing to put in the time and effort to gain technical skills in this country. So it's about education. The actual number of technical graduates is down in the U.S., while it's going up elsewhere. So for certain skills it's necessary to cast a wider net if we want to continue growing technical companies here.
----
Anyway, I think the real issue when discussing the future of jobs is wealth distribution. We've got fewer jobs, but huge global corporations sitting on enormous amounts of cash and profits. So the truth is that there is more than enough money to go around. Technology is good thing insofar as it has improved efficiencies and allowed companies to produce more with less labor. So why not force them to share the spoils? Why shouldn't our entire society benefits of all that improved productivity?

Well if we want to do that, we're going to have to find a way to force people to share that wealth with more than just their shareholders. Ask yourself: In a modern, 21st century society, why are so many of us still working 40 hour work weeks while there are so many others who can't find work at all? We now have dual income households working 80 hours week (combined), but living less well than 1 earner households did 40 years ago... The balance needs to be shifted back. While this may sound completely radical, it's the simplest best solution: if we had everyone work 20 hour weeks, but companies had to start paying them what they pay them now for 40 hours, it would turn the entire equation on its head. I'm not saying this should be done overnight. But I think that when Europe tried to take steps to cut the work week to 35 hours, they were on the right track. We should do it here too, and demand that all countries--especially the low labor ones do the same.

Barry Zorman's picture
Barry Zorman - Aug 16, 2011

When will someone discuss improving the “market” aspect of the free market? Are there ways to increase social capital in order to increase the odds that people will hear about job opportunities or team up with others to form a new business? Low cost networking events where neighbors talk to each other need to be encouraged, whether it’s a group of churches holding a board game night, or a university mixer among students and alumni. Creating social capital will help things get better.

David Rigby's picture
David Rigby - Aug 16, 2011

Oh come on!
Jack Ramirez: please stop posting such ridiculously long comments.
Marketplace: please enforce your "civil, brief and relevant" mantra.

Susan Farabee's picture
Susan Farabee - Aug 16, 2011

Hi,
Boy, the job report segment hits home - I think I'm one of the middle people - and would like to be hired into the top of the glass. I've been looking for work, looking at options for 4 months and have had a few nibbles. My hopes vary - I know I have a great bank of skills to offer - and would really like to put them to work - I do like going to work and contributing. What about sharing the pain - rather than laying off associates - have all work a few hours less, volunteer to take x days less of vacation. The function I was laid off from still exists - as a strictly hourly position. I am back to searching and writing and being positive. Thanks

Jack Ramirez's picture
Jack Ramirez - Aug 16, 2011

There are plenty of job opportunities in the US, but not for all, only for some: if you have an H1-B visa or if you have many years of full-time work experience:

However, there are not professional job opportunities if you don't have strong connections inside "the company/start-up", you are a US citizen or legal resident, and meet one or more of the following:
(Good luck finding a job in these cases)

- you are a new graduate ( If you want an internship most if not all companies require that you must be enrolled in a Master's degree program)
- you only have few years of experience.
- you are a minority. (Black, Latino etc..)
- you are in the Mid 30s/40s or older
- you did not graduate from a Top Engineering school, especially (ie: MIT, Berkeley, Standford)

All companies claim to have equal opportunity employment, but the reality is that most if not all should state the reality which is: We are NOT an Equal Opportunity Employer and do NOT value diversity.
Microsoft, Cisco, Dell, HP, etc should all have their status changed to foreign companies since they operate their headquarters and the majority of their employees overseas...

+ This is the current reality in the USA:

Top 100 H1B Visa Sponsors -2011 H1B Visa Report:
http://www.myvisajobs.com/Reports/Top-Visa-Sponsor-2011.aspx

Rank H1B Visa Sponsor H1B Visa Petitions Average Salary
1 Microsoft 2,505 $96,497
2 IBM 1,263 $80,908
11 Intel 404 $95,714
14 Oracle 376 $104,080
16 Google 355 $103,129
17 Hewlett Packard 340 $99,344
21 Yahoo 308 $105,112
26 Amazon com 255 $99,459
27 Motorola 249 $95,861
45 Apple 175 $110,987
47 Cisco Systems 169 $117,662
84 SAP America 102 $105,498
91 PayPal 98 $105,008
3 Facebook 86 Sign In

2011 H1B Visa Sponsor by Occupation: Computer Software Engineers:
http://www.myvisajobs.com/Computer-Software-Engineers,-Applications-11OC...

Twenty States With the Most Workplace Discrimination:
http://images.businessweek.com/slideshows/20110728/twenty-states-with-th...

How to Tell Whether Your Boss Plans to Replace You with an H1B Immigrant Worker:
http://blogs.sfweekly.com/thesnitch/2011/06/h1b_visa.php

Many With New College Degree Find the Job Market Humbling:
https://www.nytimes.com/2011/05/19/business/economy/19grads.html

Reverse Offshoring? Or Yet More Evidence of Corporate America's Squeeze on Workers?
http://www.alternet.org/environment/151074/reverse_offshoring_or_yet_mor...

Are American Engineers in Short Supply?
http://www.sandiegoreader.com/news/2011/mar/09/citylights1-american-engi...

Why the Anti-H-1B Argument Isn't Being Taken Seriously:
http://www.itbusinessedge.com/cm/blogs/tennant/why-the-anti-h-1b-argumen...

Workplace Discrimination Charges at Record High:
http://www.businessweek.com/lifestyle/workplace-discrimination-charges-a...

Racial stereotypes are embedded in our culture:
http://www.troymedia.com/2010/08/04/racial-stereotypes-are-embedded-in-o...

*** Important : ***

Please see link below about an important Fair Employment piece of legislation Congress is planning to pass. Your support on this is imperative for everyone who has been affected / displaced by people with H1B ( H-1b visas), or the unemployed, or the ones who do not have a solid full-time employment history in their resume. H1B visas are given to people from other countries (most times unqualified) to come to the US and work here allowing US companies to hire this group of people instead of US legal residents and citizens causing our unemployment rate to continue to increase on a daily basis. Top 100 H1B Visa Sponsors -2011 Report: http://myvisajobs.com/Reports/Top-Visa-Sponsor-2011.aspx
There are thousands of talented and qualified US legal residents and citizens who have not been able to get a job as result of this and thanks to this, millions of families have not been able to achieve their goals and are living paycheck to paycheck trying to survive and have to pay expensive school loans, high interest rates from credit card companies etc.. Example of this are the following movies: "Wall Street never sleeps" and "Company Men". This is sad and unfair but it is the reality of the USA.

H.R.2501 - Fair Employment Opportunity Act of 2011
To prohibit discrimination in employment on the basis of an individual's status or history of unemployment.
With a bill (H.R. 2501) already introduced in the U.S. House of Representatives and support in Congress building to end discrimination against unemployed jobseekers.
The ‘Fair Employment Opportunity Act of 2011’ would make it illegal for employers and employment agencies from screening out or excluding job applicants solely because they are out of work, or have history of unemployment .

*** Please take action, vote and share your comments at:
http://www.opencongress.org/bill/112-h2501/comments