New York Federal Reserve officials revealed that millions of middle-skill jobs, such as construction and teaching, have borne the biggest brunt of the economic recession and are yet to come back.
“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,” said New York Fed President William Dudley said as he briefed the press on the labor market in Puerto Rico, northern New Jersey and New York, reported Reuters.
In 2007-2010, falling sales and surging deficits saw businesses and local governments respectively lay off 9.3 percent of middle-skill workers. However, only 1.9 percent of these jobs, which tend to pay $25,000 to $50,000, have come back since the economy started recovering.
In contrast, highly-skilled and well-remunerated jobs in medicine, law and finance have increased 7.8 percent above the 1.0 percent increase during the economic downturn. Low-paying and low-skilled jobs in food products and other service sector grew 6.0 percent from 2010 to 2013 after earlier declining 2.6 percent.
The main reason why the middle-skill jobs declined was attributed to globalization and technology, said New York Fed economist Jaison Abel, who participated in drafting the report together with Richard Deitz.
By the end of last year, middle-skill workers constituted 49 percent of all the jobs in the U.S. labor markets, which was less than the 52 percent registered in 2007. Based on the 5 percent difference, the lost jobs are estimated to be about 5 million.
The New York Fed’s labor report showed that New York City recorded the highest number of jobs created since the recession, employing more workers after recovering the lost jobs. Upstate New York and Northern New Jersey fared well, managing to recoup most of the jobs lost, though Puerto Rico is still sluggish. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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