THIS STORY HAS BEEN FORMATTED FOR EASY PRINTING

Some economists see a US divided by pay scales

By Christopher S. Rugaber and Michael Liedtke
Associated Press / September 6, 2010

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When companies step up hiring again, job seekers with specialized skills and education will have plenty of opportunities. Others will face a choice: Take a job with low pay, or none at all.

Job creation will probably remain weak for months or years. But some economists expect future job openings to fall mainly into two categories of roughly equal numbers:

■Professional fields with higher pay. Think lawyers, research scientists, and software engineers.

■Lower-skill and lower-paying jobs, like home health care aides and store clerks.

And those in between? Their outlook is bleak. Economists foresee fewer moderately paid factory supervisors, postal workers, and office administrators.

That’s the sobering message US workers face as they celebrate Labor Day at a time of high unemployment, scant hiring, and a widespread loss of job security.

Not until 2014 or later is the nation expected to have regained all, or nearly all, of the 8.4 million jobs lost to the recession. Millions of lost jobs in real estate, for example, aren’t likely to be restored this decade, if ever.

On Friday, the government said the August unemployment rate had ticked up to 9.6 percent. The unemployment rate has exceeded 9 percent for 16 months, the longest such stretch in nearly 30 years.

And even when the job market picks up, many people will be left behind. The threat stems, in part, from the economy’s continuing shift from one driven by manufacturing to one fueled by service industries.

Pay for future service-sector jobs will tend to vary from very high to very low. At the same time, the number of middle-income service-sector jobs will shrink, according to government projections. Any job category that can be automated or outsourced overseas is likely to continue to decline.

The service sector’s growth could also magnify income inequality, with more people either affluent or financially squeezed. The nation is not educating enough people for the higher-skilled service-sector jobs of the future, economists warn.

“There will be jobs,’’ said Lawrence Katz, a Harvard University economist. “The big question is what they are going to pay, and what kind of lives they will allow people to lead. This will be a big issue for how broad a middle class we are going to have.’’

On one point there’s broad agreement: Of 8 million-plus jobs lost to the recession — in fields such as manufacturing, real estate, and financial services — many, perhaps most, aren’t coming back.

In their place will be jobs in health care, information technology, and statistical analysis. Some of the new positions will require complex skills or higher education. Others won’t — but they won’t pay much, either.

“Our occupational structure is really becoming bifurcated,’’ said Richard Florida, a professor at the University of Toronto. “We’re becoming more of a divided nation by the work we do.’’

The government forecasts a net total of 15.3 million new jobs by 2018. If that proves true, unemployment would drop closer to a historical norm of 5 percent.

Nearly all the new jobs will be in the service sector, the Labor Department says. The nation’s 78 million baby boomers will need more health care services as they age, for example. Demand for medical jobs will rise. And innovations in high technology and alternative energy are likely to spur growth in occupations that don’t yet exist.

Hiring can’t come fast enough for the 14.9 million unemployed Americans. Counting part-time employees who would prefer full-time jobs, plus out-of-work people who have stopped looking for jobs, the number of “underemployed’’ is 26.2 million.

“The big fear is the country is simply not preparing workers for the kind of skills that the country is going to need,’’ said Gautam Godhwani, CEO of SimplyHired.com, which tracks job listings.

Sectors likely to grow fastest, according to economists and government projections, are:

Health care
The sector is expected to be the leading job generator. An aging population requires more doctors and nurses, physical therapists, home health care aides, and pharmacists.

Physical therapists averaged about $76,000 last year; home health-care aides earned an average of just $21,600.

Information technology
Technology could be an economic elixir as computers and online networks expand ways to automate services, distribute media, and communicate.

Companies will need people to build and secure those networks. That should boost the number of programmers, network administrators, and security specialists by 45 percent to 2.1 million by 2018, the government forecasts. Most of these jobs will provide above-average pay.

Technology pay averaged $84,400 in 2008 — nearly double the average private-sector pay of $45,400, according to an analysis of the most recent full-year data by TechAmerica Foundation.

New industries
Deepak Advani, an IBM executive, has a title he said didn’t exist five years ago: vice president of predictive analytics.

Companies and government agencies have been amassing data on behavior ranging from shopping habits to criminal activity. Predictive analytics is the art of determining what to do with that data. How should workers’ time be deployed? How best to target customers? The number of such jobs could grow 20 percent by 2018, the government predicts.

Still, economists say more will be needed to boost job growth. The answer may be some technological breakthrough akin to the personal computer or the Internet.

“Most big booms come from a particular sector that moves the rest of the economy,’’ said Richard Freeman, a Harvard labor economist.

“There’s a lack of clarity on what the next big thing is going to be,’’ said David Card, an economics professor at the University of California.