To increase the odds for a long career, workers are best served by learning hands-on skills or abstract thinking.
Building off of work done by other labor economists, two researchers at the Federal Reserve of Cleveland, Murat Tasci and Jessica Ice, looked at how jobs with different skill sets performed during the Great Recession and weak recovery. The bottom line: jobs with routinized skills were hit hardest during the downturn and have been the slowest to recover.
Jobs can be divided into three categories: ones that perform routine tasks, like assembly workers; ones using manual skills and harder to automate or locate offshore, like hairdressers and construction workers; and finally, ones that require abstract thinking, such as engineering.
For decades, the U.S. labor markets have experienced “job polarization:” as some workers with certain skills lose ground because of changing technologies, workers with other skills prosper. The losses have been especially acute for routine jobs. As more factory tasks have been taken over my machines, the share of routine jobs was falling even before the last downturn. According to the paper, from July 2003 to December 2007, employment in abstract and manual jobs increased 8.0% and 7.5% respectively, while routine jobs gained 3.7%.
Tasci and Ice found that the erosion worsened during the recession. From December 2007 until the trough of employment in October 2009, routine jobs fell by 8.2%, while abstract payrolls shrank by just 1.0%.
Now, in the recovery, they write “both manual and abstract occupations have more than recouped the employment losses they sustained during the recession, while routine jobs have increased by only 4.3% after having fallen almost twice as much during the recession. “
The Great Recession didn’t cause the polarization between routine and abstract jobs, the two researchers wrote, but it probably exacerbated the split.
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