U.S. Job Growth Likely to Intensify Economic Polarization

Personal care aides forecast to be fastest growing occupation, according to BLS

Roy Maurer By Roy Maurer January 4, 2018
U.S. Job Growth Likely to Intensify Economic Polarization

There will be more high- and low-paying jobs during the next eight years, but the number of middle-income jobs will wane as employment in manufacturing and retail erodes, according to the Bureau of Labor Statistics (BLS).

The BLS projects that service-sector employment will expand, creating 90 percent of all new jobs by 2026. Manufacturing will decline by 700,000 jobs during that time.

Healthcare and social assistance jobs are forecast to grow the most of any sector, making up about one-third of all new jobs and 14 percent of all employment by 2026.

This growth is likely to increase inequalities in the labor market, said Jed Kolko, chief economist for job search engine Indeed.

"The fastest-growing jobs include those with the highest average wages, including several health care, computer and mathematical occupations," he said. "Occupations with the lowest average wages are also projected to grow fast, such as home health aides and personal care aides. Middle-wage job growth is projected to lag, at roughly half the rate of the highest- and lowest-wage jobs."

The BLS predicts that the overall labor force participation rate will drop to 61 percent in 2026, down from 62.8 percent in 2016 and from its peak of 67.1 percent in 2000. The labor force is pegged to grow at an annual rate of 0.6 percent—slightly faster than the 0.5 percent annual rate from 2006 to 2016, but slower than the annual growth experienced during several decades prior.

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Fastest-Growing Jobs

While jobs for solar-panel installers and wind-turbine technicians are expected to double by 2026, these occupations only employ a small number of people—less than 9,000 workers each in 2016.

The top five fastest-growing jobs—personal care aides, home health aides, nurse practitioners, medical assistants and nursing assistants—account for almost one-fifth of the net new jobs to be created by 2026, according to the BLS. Jobs for personal-care aides who perform non-medical duties for older Americans, such as bathing and cooking, are projected to grow the most of any single occupation—over 750,000 new jobs over the next eight years.

BLS expects 1.1 million new home health and personal care aide jobs will be created by 2026, 10 percent of the total jobs that the BLS expects the economy to add. But these jobs pay in the lower end of the spectrum, at around $20,000 annually. Another four of the 10 fastest growing occupations—mathematicians, nurse practitioners, physician assistants and software developers—pay at least $100,000 a year in median annual wages.

Occupations in Decline

Manufacturing work and automatable work involving repetitive data entry will continue to lose ground, according to BLS.

"[Manufacturing] is expected to shrink … and the office and administrative support sector will likely grow only minimally over the next 10 years," Kolko said. "Several office support and administrative jobs are projected to have the biggest losses in absolute numbers, including secretarial occupations."

The future of retail employment also doesn't look rosy. BLS projects that as online shopping and automated checkout machines become more prevalent, the number of retail cashiers will decline. Jobs at clothing and department stores are estimated to shrink by about 150,000 over the next eight years, but some will be offset by new employment in warehousing, fulfillment and logistics.

Other waning jobs include parking enforcement workers, bank tellers, mail carriers, executive assistants, data entry workers, watch repairers and a variety of factory positions.

Women hold many of the jobs that are disappearing, Kolko pointed out. "The face of job loss will increasingly be the woman behind a desk rather than the man on the factory floor. Yet many of the fastest-growing occupations, particularly in health care and personal care, are also traditionally held by women, though strong demand might attract more men."

Economic Gaps Expected to Widen

Jobs for people with higher education are projected to grow two to three times as fast as jobs for people with high school degrees in the years ahead. The greatest job growth by 2026 will be in occupations requiring a graduate degree.

"Jobs typically held by men with no more than a high school education are expected to grow just 3.9 percent, compared with 7.4 percent for employment overall," Kolko said. "And no wonder. Sixty percent of jobs that require a high school degree only and are typically male are in goods-related sectors like production—which is projected to decline—and transportation."

The nation's geographic divide is also expected to become more severe. The fastest-growing occupations are concentrated in large urban areas, especially on the coasts. Rural America will likely continue to struggle. "The two sectors projected to have no or negative growth—manufacturing and agriculture—are more concentrated in small towns and rural areas," Kolko said. "Many technical, scientific, legal, financial and health care jobs are clustered in big, dense cities."

But even among large metropolitan areas, the occupational mix supports the general trend lines. Silicon Valley, San Francisco, Boston and the Washington, D.C., area have the most favorable forecast for future growth, whereas cities in the South and Midwest tend to be less favorable.

Geographic differences might also lead to further political polarization, Kolko said. "Blue America has a more favorable job mix for future growth than Red America, where slower-growing manufacturing and agriculture jobs are clustered. In places that voted for President Trump by a 20-point margin, 16 percent of workers are in occupations projected to shrink, versus 13.2 percent of workers in places that voted for Hillary Clinton by a similar margin."

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