The answer to America's working class job crisis is hard, but not mysterious

Few economists think anyone can bring back all the working class jobs that have gone to China or Mexico. America has a different economy now, and it needs more-educated workers. 

Antonio Blanc, a senior at Malden High School, knows the risk of being left behind. 

He’s struggled to keep up at school, distracted by family instability and the part-time kitchen jobs he needs to pay the bills now he’s living alone. His plan after graduation is to enroll in a technical college and get a certificate in precision machinery.

“I want to learn a skill, something I can do when I’m done with school,” he says.

For students like Mr. Blanc, that step of education beyond high school holds the hope of a better life. For America, it could be the key to an economy that better serves the middle-skill workers who feel their futures are closing in front of them.

Their plight proved a major factor in the recent election, with Rust Belt states such as Michigan, Pennsylvania, and Wisconsin tilting to Donald Trump, who promised a renaissance of blue-collar jobs. But the contours of the United States labor market have long been clear. America is not going to see a major resurgence of the factory jobs that have fled to China or Mexico. The jobs of the future will be higher-value jobs, and the path to that prosperity will come through education.

By 2020, 2 of every 3 jobs will require some kind of postsecondary education. And most of these jobs will be in services like health care, customer service, and food preparation, not the manufacturing sector. Among traditional blue-collar jobs, only construction is likely to see a major bump in employment over the next two presidential terms.

In many respects, the country is showing signs of adapting. This year marked the first time that the share of workers with a bachelor’s degrees or higher (36 percent) exceeded those with a high school diploma or less (34 percent) – a trend that will accelerate as more Millennials enter the labor market.

But the transition is slow, and the blue-collar labor market still hasn’t recovered from the Great Recession, forcing middle-skill workers to take low-income jobs that feel like a dead end. The only way up and out, experts say, is education.

“The one thing we do know is at the very bottom end if you don’t advance the skills of those who don’t graduate or barely graduate from high school, they are surely going to be left behind,” says Alicia Modestino, an associate professor of public policy at Northeastern University in Boston who studies labor markets.

A job market with no middle 

This shift away from an industrial economy, undergirded by unions and requiring less education, has been a long time coming. But the Great Recession accelerated the process: Companies laid off millions of white- and blue-collar workers doing routine tasks and invested more in machinery and IT software. Now, firms have been reluctant to hire back those workers, instead picking more educated, younger workers for higher-skilled positions.

Virtually all the 11.6 million jobs created since 2010 went to workers with some kind of postsecondary education, according to a recent study by Georgetown University’s Center on Education and the Workforce. Workers with a four-year college degree were hired for nearly 3 out of every 4 positions. Those with a high school diploma or less saw almost no recovery in demand for their labor over this period.

“The recession has a way of bringing it all to the fore, separating the wheat from the chaff. At the end of the day, we know where demand is, where [job] creation is occurring and that some jobs are dying,” says Nicole Smith, the center’s chief economist.   

The worry is that the US job market is becoming polarized – split into a high-end track and a low-end track with little in the middle. Less-educated Americans with a high school diploma or less could get trapped in low-wage jobs while the income gains go to the top 5 to 10 percent.

For some workers, this is already reality: Wages for men without a college degree have barely budged in buying power since the 1970s. Millions have dropped out of the labor force entirely, either by choice or inability to find work.

Yet the jobs market still holds out hope for middle-skilled workers, so long as they have postsecondary education or training. Millions of Baby Boomers will be retiring and need to be replaced. Firms are looking for workers certified in specific industries that cluster in metro areas, from petrochemicals in Houston to health care in Boston, and pay decent salaries. Even manufacturers are hiring, though mostly for technicians and in logistics and other office jobs.

So high school counselors are trying to steer students like Blanc into postsecondary programs that give them an edge that their high school diploma alone can’t. Blanc is among a group of students at Malden High School who have joined a new pilot project aimed at instilling the types of soft skills that employers increasingly prize – initiative, collaboration, dependability.

“As the economy begins to require people to make transitions more and more often, those work behaviors become really critical in terms of being able to successfully make those transitions,” says Nancy Snyder, president of Commonwealth Corporation, the quasi-state organization in Boston that runs the program, Signaling Success.

Blanc, a gangly ethnic-Haitian with a razor-trimmed beard, is somewhat unusual in that he has already gained workplace experience through Massachusetts’ summer jobs program for low-income youth. As middle-skill jobs have been lost, those workers have been forced to take jobs once held by teens, pushing teens out altogether. Half of all high school students in Massachusetts have no job experience, according to Ms. Snyder’s data.

For his part, Blanc got his first part-time job at age 16 in a food truck. Asked about his future in a job market geared to college graduates, he gives a nod.

“It’s good for people to get more education. Society will be smarter. I’m going to get myself ready for it. I’m going to be a part of it.”

Where the jobs are

In terms of growth by sheer number of jobs added, the top three jobs are all in health care: personal care aides, registered nurses, home health aides. While registered nurses earn on average $67,490 a year – significantly above the national average of $36,200 in 2015 –the other two jobs paid much less, a reminder of the low-wage reality that many Americans face.

But Ms. Smith of Georgetown University sees something else in the data. In terms of the jobs that are growing at the fastest rate, they reward workers with more education and skills.

“The faster growing occupation categories are the ones paying higher wages and with higher education standards,” she says.

What might help workers on the lower rungs get a fairer shake? Improving the job market more generally always helps. As employers find it harder to recruit workers to fill jobs they will pay more for their labor. As more Boomers retire, this should put upward pressure on wages as companies go after a smaller pool of workers.

Still, the pace of automation and the elimination of routine jobs – which have seen zero net growth since 2000, according to an analysis by the FiveThirtyEight website – could push in the opposite direction, forcing more middle-class Americans to compete for less skilled jobs in service industries that rely on low-wage labor. And the rise of temp work and the gig economy, which accounts for an increasing share of employment in the US and Europe, could also upend notions of what constitutes a stable middle-class job.

Khadija West, a senior at Malden High School, wants to study engineering after she graduates. Like Blanc, she prefers to work with her hands; her grades in school aren’t so hot, she admits. “I love building things. I’m very good at it,” she says.

Her goal is a two-year program at a technical college where she can learn to operate machinery and eventually look for a factory job. For now, she’s enrolled in the pilot program, learning about the importance of presentation in job applications. Making eye contact. Asking relevant questions. Listening to instructions.

Asked about the rise of automation in manufacturing, and the chance that she could be displaced, Ms. West doesn’t miss a beat. “I’ll get a job where I’ll be the one who designs the robots,” she says.