Future Jobs: More Skills Or Less Pay

Whenever companies start hiring freely again, job-seekers with specialized skills and education will have plenty of good opportunities. Others will face a choice: Take a job with low pay — or none at all. That's the sobering message American workers face as they mark Labor Day at a time of high unemployment, scant hiring and a widespread loss of job security

By CHRISTOPHER RUGABER and MICHAEL LIEDTKE
The Associated Press
Whenever companies start hiring freely again, job-seekers with specialized skills and education will have plenty of good opportunities. Others will face a choice: Take a job with low pay — or none at all.

Job creation likely will remain weak for months or even years. But once employers do step up hiring, some economists expect job openings to fall mainly into two categories of roughly equal numbers:

• Professional fields with higher pay. Think lawyers, research scientists and software engineers.

• Lower-skill and lower-paying jobs, such as home health-care aides and store clerks.

Those in between? Their outlook is bleaker. Economists foresee fewer moderately paid factory supervisors, postal workers and office administrators.

That's the sobering message American workers face as they celebrate Labor Day at a time of high unemployment, scant hiring and a widespread loss of job security. Not until 2014 or later is the nation expected to have regained all, or nearly all, the 8.4 million jobs lost to the recession. Millions of lost jobs in real estate, for example, aren't likely to be restored this decade, if ever.

On Friday, the government said the August unemployment rate ticked up to 9.6 percent. Not enough jobs were created to absorb the growing number of people seeking work. The unemployment rate has exceeded 9 percent for 16 months, the longest such stretch in nearly 30 years.

The crisis poses a threat to President Obama and Democrats in Congress, whose hold on the House and Senate appears to be at increasing risk because of voter discontent.

Even when the job market picks up, many people will be left behind. The threat stems, in part, from the economy's continuing shift from one driven by manufacturing to one fueled by service industries.

Pay for future service-sector jobs will tend to vary from very high to very low. At the same time, the number of middle-income service-sector jobs will shrink, according to government projections. Any job that can be automated or outsourced overseas is likely to continue to decline.

The service sector's growth also could magnify the nation's income inequality, with more people either affluent or financially squeezed. The nation isn't educating enough people for the higher-skilled service-sector jobs of the future, economists warn.

"There will be jobs," said Lawrence Katz, a Harvard economist. "The big question is what they are going to pay, and what kind of lives they will allow people to lead. This will be a big issue for how broad a middle class we are going to have."

There's broad agreement on one point: Of 8 million-plus jobs lost to the recession — in fields such as manufacturing, real estate and financial services — many, perhaps most, aren't coming back.

In their place will be jobs in health care, information technology and statistical analysis. Some new positions will require complex skills or higher education. Others won't — but they won't pay much, either.

"Our occupational structure is really becoming bifurcated," said Richard Florida, a professor at the University of Toronto. "We're becoming more of a divided nation by the work we do."

By 2018, the government forecasts a net total of 15.3 million new jobs. If that proves true, unemployment would drop far closer to a historical norm of 5 percent.

Nearly all the new jobs will be in the service sector, the Labor Department says. The nation's 78 million baby boomers will need more health-care services as they age, for example. Demand for medical jobs will increase. And innovations in high technology and alternative energy are likely to spur growth in occupations that don't yet exist.

Hiring can't come fast enough for the 14.9 million unemployed Americans. Counting part-time employees who would prefer full-time jobs, plus out-of-work people who have stopped looking for jobs, the number of "underemployed" is 26.2 million.

Manufacturing has shed 2 million jobs since the recession began. Construction has lost 1.9 million, financial services 651,000.

But the biggest factor has been the bust in real estate. Vanished jobs range from construction workers and furniture makers to loan officers, appraisers and material suppliers. Moody's Analytics estimates the total number of housing-related jobs lost at 2.4 million. When you include commercial real estate, the number is far higher.

On top of real estate-related job losses, manufacturing is likely to keep shedding jobs, sending lower-skilled work overseas. Millions who worked in those fields will need to find jobs in higher-skilled or lower-paying occupations.

"The big fear is the country is simply not preparing workers for the kind of skills that the country is going to need," said Gautam Godhwani, CEO of SimplyHired.com, which tracks job listings.