Newest job numbers show that businesses are expanding Opportunities in high - wage fields. (Part II)
“As this recovery gets under way, professional services have begun adding jobs fairly broadly,” says Jared Bernstein, an economist at the liberal Economic Policy Institute (EPI) in Washington.
EPI tracked the weighting of higher - versus lower - paying jobs that are being added to the economy. For much of the current expansion, which began at the end of 2001, that indicator has been negative.
In the past year, however , it has turned positive, meaning that the new jobs in the economy are the kind that tend to pull average wages up, not down.
Beyond professional services, one example may be construction. The housing market is cooling, but commercial building is heating up.
“More of the work will be in nonresidential construction,” predicts Michael Carliner, an economist at the National Association of Home Builders. That could mean demand for higher skills, such as equipment operation, that boost pay.
The question, however, is how much of today’s strengthening labor market represents cyclical trends, rather than long term gains.
At this point, perhaps midway into an expansion phase, it’s not unusual to see the job mix improve and pay to rise in new and existing jobs alike. “I would expect wages and compensation to increase faster,” says Rae Hederman of the conservative Heritage Foundation in Washington.
How long that pattern lasts will depend in some measure on the Federal Reserve, which is now trying to decide whether to raise interest rates further. Setting rates too high, some experts warn, could slow the economy and dampen job growth.
The labor market’s gains are beginning to take on the shape of a barbell, with growth weighted heavily at the two ends of the pay scale. During the current expansion, the bulk of new jobs have come in either the highest - paid of five broad occupational categories - management and professional - or the lowest - paid, services. Together the two sectors now account for more than half of all jobs ( The other three major categories are sales and office work, construction and natural resources, and production/ transportation ).
The economy’s overall share of jobs with strong pay and benefits has failed to grow during the past quarter century, even though workers today have higher skills and more technology to make them productive, says John Schmitt, an economist at the Center for Economic and Policy Research, a liberal research institute in Washington. That’s a break with the past, he says, when “wages typically tracked closely with productivity”.