This article provides some data on the types of jobs lost during the recession, and the types of jobs that have been created during the recovery. The loss of low paying service jobs in the recession was a small percentage of total job loss. The job gains during the recovery have come primarily from that sector. The low paying service sector accounts for 70% of the gains in employment, when the decline in public sector jobs is factored into the labor force.
Wage growth has also been slow during the recovery. That is explained by the nature of the jobs that have replaced the jobs that were lost in the recession. The jobs in the service sector that are growing are also the kinds of jobs that cannot be outsourced to low wage countries. A clerk in a department store, for example, must be sourced locally.
Ordinarily, higher skilled workers with at least two years of college have an unemployment rate of 3.3%. The unemployment rate for this segment of the labor force is 7.3% today. This group is being squeezed by the ability of US corporations to tap into a global labor force that includes high skilled workers in countries with lower wages. The law of supply and demand tells us that an increase in the supply of a factor of production will lower the cost of that factor. This means that global wages in the market for many high skilled jobs will decline if the performance of work is independent of location.
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