Just Released: What Kinds of Jobs Have Been Created during the Recovery?

Jaison R. Abel and Richard Deitz

At today’s regional economic press briefing, we provided an update on economic conditions in New York, northern New Jersey, and Puerto Rico, with a special focus on the kinds of jobs that have been created in each of these places during the recovery. Led by New York City, economic activity has continued to expand in most parts of the region. As a result, a growing number of places have now gained back, or are close to gaining back, all of the jobs that were lost during the Great Recession. That said, not all the news was positive. Economic conditions appear to have weakened somewhat in northern New Jersey during the first few months of 2014, in part due to the harsh winter weather earlier this year. And a few places remain very weak. In particular, Binghamton, Elmira, Utica, and Puerto Rico have yet to see any meaningful jobs recovery.

    
Although employment has now returned to levels seen prior to the Great Recession in the nation and in much of the region, the types of jobs created during the recovery are not the same as those that were lost during the recession. It turns out that during the recession, the vast majority of jobs that were lost in the nation and across the region were middle-skill jobs, such as construction workers, teachers, machine operators, and administrative support workers. These jobs have not come back during the recovery. In fact, upstate New York and Puerto Rico have continued to lose middle-skill jobs during the recovery, while there were essentially no changes in these jobs in New York City or northern New Jersey. What have grown are higher-skilled jobs—such as engineers, computer programmers, doctors, and financial analysts—and lower-skilled jobs—such as food service workers, retail clerks, health care aides, and child care workers.

    
These patterns primarily reflect three trends. First, they show that the decades-long process of job polarization—that is, a loss in middle-skill jobs combined with job growth at the upper and lower ends of the skills distribution—has continued through the latest business cycle. Second, ongoing weakness in housing has meant that there has been little bounceback in construction jobs. Finally, fiscal pressures in the public sector, which accelerated after the recession as stimulus spending wound down, have resulted in fewer teachers and cuts in state and local government jobs.

    
So while a growing number of places in the region have gained back the number of jobs lost during the Great Recession, the types of jobs in the region have changed: job growth has been geared toward higher- and lower-skilled workers, with job opportunities in the middle continuing to shrink.

    
For more information on how the jobs recovery has progressed throughout the region, see the New York Fed’s regional economic press briefing web page.

Disclaimer
The views expressed in this post are those of the authors and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions are the responsibility of the authors.

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Jaison R. Abel is a senior economist in the Research and Statistics Group of the Federal Reserve Bank of New York.

Richard Deitz is an assistant vice president in the Bank’s Research and Statistics Group.