Bifurcated Job Market?
This term is coming up in the news more frequently. Sometimes it is referred to as the 1% rule. 1% of the population makes significantly more than the rest.
The top 1% have the highest proportion of total income since the Great Depression.
Another way to look at this issue is to compare the median versus the average wage in the US.
In 2014, the average wage earner made $44,569, but the median wage was only $28,851. For those of you who are not statisticians, half of working Americans made less than $28,851. The gap between average wages and median wages has exploded over the last 25 years.
Since this post was originally written in May of 2016 this has become more pronounced. Check out my post Baby Boomers, How is the Economy Working for You?
Skills and the Bifurcated Job Market
I lived for 40-plus years in Austin, Texas, which is the most economically segregated city in the country. It is a truly bifurcated job market. Here, we have a lot of high-end jobs in the tech sector and many low-end jobs in the service industry. Fortunately, Austin is home to the Texas state government and the University of Texas, which are the top two employers in the city.
This is all about skills. I am briefed at least once a year by the Texas Workforce Commission on the state of the job market in central Texas. Nearly every time, 5-7 of the top job categories require skills that did not exist 5-10 years ago. It is all about having the right skills at the right time.
The only exception to this appears to be healthcare. As boomers age, there will always be demand for healthcare workers. However, that does not mean that those positions will pay well. One of the largest groups to fight for $15 an hour minimum wage are healthcare workers.
It is about acquiring relevant, in-demand skills and being vigilant when those skills are no longer in demand.
Essential Versus Non-Essential Workers During the COVID-19 Pandemic
The COVID-19 pandemic has created this concept of “essential” versus “non-essential” workers. This clearly demonstrates the bifurcated job market.
What is defined as an essential job or industry? According to Wikipedia, these include the following:
- Health Care/Public Health/Human Services
- Law Enforcement, Public Safety, First Responders
- Food and Agriculture
- Water and Wastewater
- Transportation and Logistics
- Public Works
- Communications and Information Technology
- Other Community-Based Essential Functions and Government Operations
- Critical Manufacturing
- Supply Chains
- Retail and Wholesaling
- Food Services and Accommodations
- Institutional, Residential, Commercial and Industrial Maintenance
- Manufacturing and Production
- Financial activities
- Environmental Services
- Utilities and Community Services
- Communications Industries
- Justice Sector
- Business Regulators and Inspectors
Many of these jobs are either customer-facing or working in close proximity of coworkers (Food Services and Accommodations, Retail and Wholesaling, Critical Manufacturing, Construction, Law Enforcement, Public Safety, First Responders). These are the most vulnerable to becoming infected. It does not help that close to 25% of all retail workers are over 55 years of age.
The Washington Post article Retail workers in their 60s, 70s and 80s say they’re worried about their health — but need the money states the following:
The number of retirement-age Americans working in retail has increased steadily since the 2008 recession as they look to make ends meet. Nearly one-quarter of retail workers are 55 or older, and 7 percent are over 65, according to Labor Department data, which means that the demographic most vulnerable to the coronavirus is increasingly on its front lines, selling groceries, medicine and other necessities to the crowds of shoppers who raise their risks for infection.
Have Your Skills Been SMACed?
Previously, I wrote about how jobs and skills are being affected by SMAC (Social Mobile Analytics Cloud).
I am currently working with a 65+-year-old gentleman who has been a Microsoft IT specialist for the last 10+ years. Demand for his skills has fallen off a cliff as server virtualization and later cloud technologies have automated much of what he used to do. This shift happened very fast. He is now retooling himself as a data analytics expert, which is currently a hot market. We just don’t know if it is hot for a 65+-year-old guy!
Contingent Labor Force Growing Fast
The opening couple of paragraphs say it all:
Most workers quickly realize that the best solution to low earnings in a job with scant or non-existent benefits is to move on to something better.
But this is increasingly difficult to pull off because technology and other powerful forces are reshaping the 21st-century economy – and degrading the quality of the jobs that are available. As companies seek to cut labor costs, technologies like scheduling software for retail and fast-food workers and platforms like Uber and Task Rabbit are making it easier to do.
This is also referred to as the gig, sharing, or on-demand economy. It provides workers with the freedom to work when and for whom they want. The downside is that this is suppressing wages.
What Does the Future Hold
The post CoronaVirus world will not look like the world before the CoronaVirus. Industries and jobs will be eliminated while innovation will create new ones. This is the natural acceleration of creative destruction.
The skills you will need in the post CoronaVirus world will be different, both from a technical but also from a human resources perspective.
Do you know how to manage a remote team?
Are you good at managing group meetings over Zoom or Skype?
Are you up to date on all of the distributed project management tools like Asana, Basecamp, and others?
Is your local job market bifurcated?
Which side are you on? Are you on the in-demand side?
If not, what are you going to do about it?