Economist explores the dramatic loss of skilled jobs in the United States
University of British Columbia economist Paul Beaudry investigates the U.S. unemployment paradox and suggests there is hope for skilled workers yet.
What is behind the long-term U.S. decline in jobs for educated workers?
There has been a lot of focus on poor economic outcomes since the financial crisis of 2008, but I believe the real turning point for the U.S. economy was 2000. The employment rate has been falling since then, almost as if we never recovered from the tech bust. The reversal has been especially dramatic for educated workers. After decades of increased demand, more and more highly educated workers have cascaded down the occupational ladder since 2000. This has pushed many younger and less skilled workers out of the workforce altogether. Many recent university graduates are finding it challenging to land jobs in their trained field in the United States.
Have information technology needs reached a plateau?
Over the past 30 years, information technology has replaced a lot of routine jobs in manufacturing. We ramped up the education of skilled workers as a result. During the tech boom of the 90s, the implementation of IT required many highly educated workers. But since 2000 demand hasn’t kept up. The situation is similar to building a pipeline. You need a lot of workers to build the infrastructure, but once it’s built, fewer people are required to maintain it. So now we are dealing with an overstock of skilled workers.
When will this “cool off” period end?
I think we’ve seen this type of long implementation cycle before. It took 30-40 years to bring in information technology, and the first wave may have come to maturity while a second one may be around the corner, or it could take longer. It all depends on that next big thing – is it artificial intelligence or 3D printing that might give us the type of boom we saw in the 80s and 90s? We’re on the lookout for those new frontiers. That’s why I am not overly alarmed by predictions of technology replacing the human work force.
Paul Beaudry, a professor in UBC’s Vancouver School of Economics, will present The Reversal in the Demand for Skills and Cognitive Tasks Since 2000 at the 2014 AAAS annual meeting 1-2:30pm CST, Feb. 15, 2014.