U.S. middle-skill jobs struggle to come back: NY Federal Reserve

Middle-skill jobs suffered heaviest losses, slowest recovery

NEW YORK (Reuters) — Millions of U.S. teaching, construction and other middle-skill jobs lost in the last recession have not returned, exacerbating the already high unemployment that has been a drag on the U.S. recovery, New York Federal Reserve officials said on Wednesday.

These middle-skill jobs, which pay roughly US$25,000 to $50,000 annually, suffered the heaviest losses in the past three downturns when compared with high-skill and lower-skill counterparts, they said at a press briefing on current labor conditions in New York, northern New Jersey and Puerto Rico.

"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," New York Fed President William Dudley said in a speech.

From 2007 to 2010, U.S. employers slashed 9.3 per cent of middle-skill jobs as companies coped with falling sales and local governments faced ballooning deficits, a New York Fed study released on Wednesday showed based on federal jobs data.

Since the start of the recovery, middle-skill jobs have increased 1.9 per cent.

In comparison, higher-skill and higher-paying occupations in law, finance and medicine have grown 7.8 per cent on top of the 1.0 per cent gain during the recession.

Lower-skill and lower-paying jobs in food and other services industries recovered 6.0 per cent in 2010 to 2013 following a 2.6 per cent decline.

"The middle (skill jobs) tends to shrink away," said Jaison Abel, a senior economist at the New York Fed who co-wrote the regional jobs study with Richard Deitz. "Technology and globalization are driving this trend."

At the end of 2013, middle-skill jobs made up 49 per cent of all U.S. jobs, down from 52 per cent in 2007. This three-point drop is equivalent to five million jobs at this level which have disappeared, according to Abel.

On a regional basis, New York City has led the job recovery, adding workers on top of recouping all the jobs lost during the recession. Northern New Jersey and upstate New York have lagged New York City while managing to recover many of the jobs lost.

However, Puerto Rico's labor market has continued to struggle, the New York Fed study showed.

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