Are middle class jobs coming back?

Almost half of all new jobs are middle-income positions, according to new analysis by the Federal Reserve Bank of New York.

Photo by Melanie Stetson Freeman/The Christian Science Monitor
Originally from El Salvador and living in the United States for 10 years, Luis Enriquez supports his wife and son working at 1st Choice Collision in Rockville, Md..

Is the middle class still shrinking? Maybe, but a new federal report will certainly disrupt that narrative.

Middle income jobs have rebounded, according to new analysis by the Federal Reserve Bank of New York. The finding suggests that previous job growth trends, which showed significant improvement only in low-wage and high-wage job creation, have inverted in recent years.

“Our economists will show that the tide has begun to turn,” said William Dudley, president of New York Fed, in a statement. “For the first time in quite a while, gains in middle-wage jobs actually outnumber gains in higher- and lower-wage jobs nationwide.”

The economy gained over 2 million middle-wage jobs – positions paying between $30,000 and $60,000 per year – between 2013 and 2015, the new study finds. By comparison, only about 1.5 million low-wage jobs and 1.5 million high-wage jobs were added in that three-year period. In previous periods, these numbers were more or less reversed.

The middle class, compressed by wage stagnation, has been slow to recover in post-recession years. Even as unemployment receded and consumer spending resumed, many middle-wage jobs simply didn’t return. Between 2010 and 2013, only about 20 percent of new jobs were in middle-income fields such as education, construction, and social services.

But according to Dudley and colleagues, that is slowly changing. Now, middle-wage positions make up over 40 percent of new jobs.

“We're seeing a return of these middle-wage jobs,” said New York Fed research officer Jaison Abel in a press release. “A good bit of this has to do with just shifting gears in the economic cycle and moving from recovery to having some sustained expansion.”

But some fields, such as manufacturing and administrative support, have still struggled to resume growth.

"Manufacturing has been getting slowly suffocated over the course of decades, because that industry is just leaving the US in large part. And the industry is getting so productive and so automated," Andrew Chamberlain, chief economist at employment hub Glassdoor, told U.S. News & World Report.

Many economists agree that, adjusted for inflation, wages are still stagnating for most Americans. But the cause of that stagnation is a matter of debate. The Christian Science Monitor’s Mark Trumbull reported:

The phenomenon has coincided with an era of global competition that includes exporting nations with much cheaper labor. Then the 2008 financial crisis squeezed consumer activity, eating a hole in the job market. And some economists say the policy climate has favored investors over workers.

But an upward trend of middle-income job growth could be a promising, if early, sign of recovery for the US labor market.

"My view is that we still have one of the strongest job markets that we've had in a generation today," Chamberlain said. "Overall, for the country as a whole, there is a pretty broad diversity of jobs being added today."

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