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Middle class jobs gone forever, but there's hope

November 28, 2011: 1:57 PM ET

The number of jobs available for skilled workers without a college degree is declining fast.

FORTUNE -- The Occupy Wall Street movement has brought a new focus to an issue that many Americans have long seen as a problem: The growing gap between the haves and have nots. The nation's richest households are getting richer while everyone else seems to languish behind. There's obviously something wrong with that. But while it's easy to blame corporate greed and the evil banks, it might make more sense to look at what's happening to the jobs that once supported America's growing middle class. They're shrinking. Fast.

In a recent report, the Federal Reserve Bank of New York highlighted the erosion of what it calls "middle-skill jobs." These are relatively comfy jobs that don't demand a lot of schooling -- folks in sales, office and administrative workers, production workers and the like. The Americans that held these jobs once earned a decent living, which meant buying a home and retiring comfortably, all without a college degree.

Those days are long over (since around 1980, actually). The Fed crunches some pretty disturbing numbers that imply America's jobless problems today will probably not go away even when the economy fully recovers.

Between 1980 and 2009, demand for high-skilled workers from engineers to architects grew steadily. So did their wages. For instance, the median wage for jobs related to computers and math was roughly $49,000 in 1980 and it rose to $67,000 in 2009. Demand for lower-skilled workers from waitresses to construction workers also grew (and to some extent, so did their wages), leaving the middle class floundering with few options and declining or stagnant pay.

So how bad off is the middle class? The Fed offers a distressing glimpse: In 1980, three quarters of all U.S. workers were employed in middle-skill jobs. By 2009, that figure plunged to two-thirds. Whereas machine operators accounted for 10% of the nation's jobs more than three decades ago and administrative jobs comprised 18%, their shares spiraled to about 4% and 14%, respectively, by 2009.

It's not just a trend in the U.S., but also in many of the world's advanced economies. And while it has been happening for more than three decades, middle-skill jobs suffered more than most others during the Great Recession.

Economists have offered several reasons explaining the trend, from the sophistication of machines that replace routine work to international trade and offshoring. Indeed, rising demand for skilled workers seems almost irreversible. But Massachusetts Institute of Technology economist David Autor suggests that perhaps it's not entirely out of our control.

The vanishing of middle-skill jobs has hurt America's less educated white males most. It's certainly surprising, given that men typically earn more than women in corporate America. But if you look at the nation's college campuses, it's easy to see why.

In a study published last year, Autor pointed out that the rate of women getting college degrees has by far outpaced men. Since higher-skilled jobs requiring college degrees tend to pay significantly more, this slowing growth for men doesn't bode well. Between 1970 and 2008, four-year college degree attainment among white men ages 25 to 34 rose only modestly, from 20% in 1970 to 26% in 2008. By contrast, college attainment among white females remarkably tripled to 34% from 12%.

There's been little in the way of filling the jobs gap. And while Autor doesn't offer any specific solutions, it's hard not to wonder if America's inequalities perhaps have more to do with its education system than the big bonuses on Wall Street.

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About This Author
Nin-Hai Tseng
Nin-Hai Tseng
Writer, Fortune

Nin-Hai Tseng covers economics and finance. Before joining Fortune, Tseng was a reporter at The Orlando Sentinel and a public affairs associate at GE. She holds an MPA from Columbia University and a BS in Journalism from the University of Florida. She lives in New York City.

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