The middle class is being displaced and with it the jobs typically held and performed by labor. This trend is threatening the way of life for millions of Americans and could change the economic, social, and political fabric of the United States.
There are two principal occurrences underway driving this phenomenon with no end in sight for either:
- The migration of low and mid-skilled jobs to developing countries with cheaper labor compensation.
- The automation or robo-sourcing of tasks typically performed by minimally skilled employees.
If you are now in a job that can be outsourced or automated start making plans immediately for an employment change, because chances are your job is not going to be around much longer.
This is a good news/bad news story for business. As more relatively lower-skilled workers are finding themselves increasingly irrelevant their erstwhile employers are finding productivity does not suffer as a result. On the contrary productivity is increasing.
Outsourcing and robo-sourcing are growing in popularity among business owners because they increase productivity and decrease costs. Good deal for the bottom line…bad deal for labor. Look at the stock market. It booms while the employment numbers generally lag.
Much of what has historically made the middle class possible has been the availability of mid-level jobs — those that require more skill and knowledge than menial tasks, but not the more sophisticated, analytical, and critical decision-making work performed by well-educated executives. Manufacturing is where many of these jobs used to be found. But the decline of U.S. manufacturing means the loss of mid-level blue collar work.
Thankfully, there are still mid-level service sector jobs in healthcare, hospitality, retail, the trades, and elsewhere. Unfortunately, these jobs do not often satisfy the middle-class standard of living we have become used to. The jobs are hard to come by and many of them do not pay very well.
The labor movement is in trouble. The collective strength of labor, which in the twentieth century helped assure decent middle-class compensation and placed the worker in a position where he and she could share in the fruits of production, has been significantly weakened. These days unions only represent about 12% of the workforce and the competition for fewer and fewer good paying jobs is growing fiercer. Even government work is drying up.
The guy with only a high school diploma is competing against cheap labor from overseas and increasingly robotics here at home. This is not a solid negotiating position to be in for finding and retaining a decent paying middle class job.
There are no quick fixes or easy answers for the middle class. Sure, aspiring to great paying management and executive work can and should be a goal for many, but realistically that is not for everyone.
Sustaining a viable middle class will require availability of mid-skilled employment that can be achieved with mid-level education, say the equivalent of an associate or bachelor’s degree. This type of employment should also pay a salary between minimum wage and executive compensation. What a critical mass of those jobs will be moving forward is unclear. But if we are to be more than a nation of haves and haves-nots in the 21st century, then we had better figure this one out soon.
