Inside the Hottest Job Market in Half a Century

A look at who’s getting ahead, who could be left behind and how long the boom can last

The plan seems to be paying big dividends now, but will it yield long-term results for American workers?

Two risks loom. The first is that the low-skill workers who benefit most from a high-pressure job market are often hit hardest when the job market turns south. Consider what happened to high-school dropouts a little more than a decade ago. Their unemployment rate dropped below 6% in 2006 near the end of a historic housing boom, then shot up to more than 15% when the economy crumbled. Many construction, manufacturing and retail jobs disappeared.

The unemployment rate for high-school dropouts fell to 5% last year. In the past year, median weekly wages for the group rose more than 6%, outpacing all other groups. But if the economy turns toward recession, such improvement could again reverse quickly. “The periods of high unemployment are really terrible,” Ms. Yellen said.

The second risk is that this opportune moment in a long business cycle might be masking long-running trends that still disadvantage many workers. A long line of academic research shows that automation and competition from overseas threaten the work of manufacturing workers and others in mid-skill jobs, such as clerical work, that can be replaced by machines or low-cost workers elsewhere.

.. Tougher trade deals being pushed by the Trump Administration might help to claw some manufacturing jobs back, but economists note that automation has many of the same effects on jobs in manufacturing and the service section as globalizationreplacing tasks that tend to be repeated over and over again.

.. Andrew McAfee, co-director of the MIT Initiative on the Digital Economy, said the next recession could be the moment when businesses deploy artificial intelligence, machine learning and other emerging technologies in new ways that further threaten mid-skill work.

Recessions are a prime opportunity for companies to reexamine what they’re doing, trim headcount and search for ways to automate,” he said. “The pressure to do that is less when a long, long expansion is going on.”

With these forces in play, many economists predict a barbell job market will take hold, playing to the favor of low- and high-skill workers and still disadvantaging many in the middle.

.. Personal-care aide, a job which pays about $11 an hour to help the elderly and disabled, is projected to add 778,000 jobs in the decade ended in 2026, the most of 819 occupations tracked. The department expects the economy to add more than half million food prep workers and more than a quarter million janitors.

Those low-skill workers are reaping pay gains in part because there aren’t a lot of people eager to fill low-skill jobs anymore. Only about 6% of U.S. workers don’t hold a high school diploma, down from above 40% in the 1960s, according research by MIT economist David Autor.

.. Skilled workers in high-tech and managerial positions are also benefiting from the high-pressure labor market, particularly in thriving cities. Of 166 sectors that employ at least 100,000 Americans, software publishing pays the highest average wages, $59.81 an hour in the fourth quarter of 2018. Wages in the field grew 5.5% from a year earlier, well outpacing 3.3% overall growth in hourly pay. The average full-time employee in the sector already earns more than $100,000 a year.

When Young Men Don’t Work

Immigrants replace them in the labor force; leisure replaces work in their lives.

“[T]he United States has been a magnet for low-skill immigration even as low-skill natives have worked less and less,” Richwine writes.

..What it does show is that immigrants are picking up the slack left by jobless natives, taking the pressure off American society to do something about its problem of idle young men. Businesses looking for low-skill labor, for example, don’t have to attract natives, because they can hire immigrants instead—leaving low-skill natives to do whatever it is they do in their parents’ basements when they don’t have jobs.

..Since the early 2000s, young, low-skill men have added about four hours a week to their leisure time, replacing almost one-to-one the working hours they lost.

About three of those additional hours are spent on video games.

Each day, low-skill young men who aren’t employed spend an average of about two hours apiece (roughly 12 hours a week) playing video games.

Each day, a quarter of these nonworking men game for three hours or longer; a tenth game six hours or more. (Note that it’s hard to say whether these are the same people binging day after day. In the time-diary survey, each person is interviewed only once, about what they did on a single day.)

.. there is a difference between correlation and causation, and if men left the labor force for reasons unrelated to video games, no one would be surprised if they nonetheless ended up playing more video games in their newfound free time. But he offers an argument that is at least plausible:

.. However, if it were up to him, I have no doubt he would play video games 23-and-a-half hours per day. He told me so. If we didn’t ration video games, I am not sure he would ever eat. I am positive he wouldn’t shower.

.. Even among low-skill men who aren’t employed, only about 40 percent play video games on any given day, while more than 80 percent watch TV or movies.

.. if there’s anything to the argument that leisure time has become more pleasant, the story should start with TV, not video games.

.. Perhaps one should not dwell too long, however, on the question of what type of leisure low-skill young men are engaging in. The more important fact remains that leisure is slowly replacing work in their lives, as immigrants replace them in the labor force.