Disappearing Middle-Class Jobs

by Jenna Goudreau
Wednesday, June 29, 2011

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"The American dream is dead for the majority of America," financial guru Suze Orman told Forbes last year, speaking about her upcoming book "The Money Class."

The dream she was referring to isn't a Cinderella story. Rather, Orman believes the hope of someday owning a home, of working one job for life and retiring at 65 has been crushed by the financial crisis. "The middle class has disappeared," she said. "Many of the millions of jobs lost I don't think are coming back. I am really afraid for the majority of Americans today."

Are stable, well-paying middle-class jobs an endangered species? Economists say: Sort of.

"The idea that one can have a single-earner family, get a good job, keep it for life and have a comfortable living is all but gone," says Kevin Hallock, professor of labor economics and director of the Institute for Compensation Studies at Cornell University. "Long-term job stability is declining, and there aren't good unionized jobs like there once were."

The recession may have just complicated and compounded what was already occurring. Generally, jobs are disappearing where there's been a technological advance — "where a human was doing something, now a technology is doing it" — or a change in the way that organizations function, says Hallock. And not only are old-fashioned assembly line jobs on the decline, several white-collar office positions are also in jeopardy.

"There has been some long-term decline in middle-income jobs," says Harry Holzer, Georgetown University economist and co-author of "Where Are All The Good Jobs Going." "Specifically, it's good-paying production and clerical jobs that are disappearing."

Holzer is quick to say that though there has been "shrinkage," he remains confident that there are many good jobs in the middle — they may just look different.

New technology has gradually cut into many steady jobs that had previously been critical to the market. Clerical occupations are shrinking fast, as companies tighten budgets and easy-to-use software enables workers to do their own administrative tasks. According to data provided by Moody's, nearly 300,000 office and administrative support positions gradually disappeared in the five years before 2009, and the U.S. Bureau of Labor Statistics projects continued contraction throughout the next decade.

Because over 20 million people count on clerical work, the vanishing act is a major blow to the middle, but there are other more niche positions that are also on the chopping block. Internet travel sites have essentially erased the need for travel agents, an occupation which declined by 14% and 12,500 jobs in the last five years for which data is available. Similarly, proofreaders — generally highly skilled workers with a four-year college degree — were once vital to publications and communications departments. These positions shriveled by 31%, likely due to advanced software, Holzer says.

"Having a college diploma doesn't make you immune to the shifts in the labor market," notes Holzer. "It is a testament to the churning in the U.S. market."

Educated and skilled professionals sometimes fall victim to structural changes in their sectors. Broadcast news analysts and advertising and promotions managers experienced five-year declines of 16% and 33% respectively. The adjustment follows a wide-spread media transition to online content and shrinking advertising revenue and budgets. Likewise, agricultural engineering jobs contracted by 18%, despite the general demand for engineers, because agriculture is a declining sector.

Economists hope these changes will result in creative destruction — new middle-class jobs will emerge to balance out those that were lost. However, Hallock believes companies are still nervous about growing their ranks. "It's expensive to hire and fire workers," he says. "Companies are reluctant to hire now. It's exacerbating the problem."

Based on occupational employment numbers from 2004 to 2009, provided by Moody's, the following well-paying jobs may be disappearing before our eyes.

Travel Agents

Five-year decline: 14%

Why it's declining: This field contracted by 12,500 jobs in just five years. Economists believe Internet technology is erasing the demand for these workers.

Vocational Education Middle School Teachers

Five-year decline: 14.4%

Why it's declining: According to the U.S. Bureau of Labor Statistics, these teachers of career or technical subjects earn an average of $54,000 a year. The positions may be on the decline due to budget cuts in the public system.

Broadcast News Analysts

Five-year decline: 15.9%

Why it's declining: These jobs are getting hit by the structural changes within media, as news organizations transition content to the Web and adjust to deflated advertising revenue.

Agricultural Engineers

Five-year decline: 18.4%

Why it's declining: This specialty employs the smallest number of workers than any in the engineering field. Despite the fact that general engineering positions are quickly growing, economists say the agricultural sector is contracting.

Transit and Rail Police

Five-year decline: 18.7%

Why it's declining: These workers earn about $50,000 annually, and those in the highest percentile can earn upwards of $80,000 a year. Not only did these positions decline significantly in the last decade, occupation organization O*NET Online anticipates slower than average growth through 2018.