The United States’ aging economic boom can still produce pleasant surprises.
Companies added an astonishing 312,000 new jobs in December and raised pay at the fastest clip in years. For the third of working-age Americans without any college education, such spells of rapid income growth have been exceedingly rare, not only since the financial crisis but in the past half-century.
The misfortunes of the left-behind were a recurring topic at this year’s meeting of the American Economic Association in Atlanta. David Autor of the Massachusetts Institute of Technology offered the most pointed characterization, drawing on forthcoming research co-authored with colleague Juliette Fournier. The earnings of workers without a college education have scarcely risen in 50 years, after adjusting for inflation; for men they have fallen.
This stagnation coincided with tectonic changes in U.S. employment. The share of jobs that require either a lot of training or very little has grown since 1970. Much of the production and office work that requires moderate training, which once employed vast numbers of workers without college degrees, has disappeared, either shipped abroad or offloaded on robots and computers. The resulting hardship has been implicated in a rise in mortality in parts of the United States and a turn toward nationalism that helped put Donald Trump in the White House.
Working out what to do about those left behind by economic progress is becoming an obsession of policy wonks. Autor and Fournier provide important new context. In the 1950s, they show, there was almost no relationship between how densely populated a place was and the share of its residents with college degrees. That has changed utterly: The share of the working-age population with a degree is now 20 percentage points higher in urban places than it is in rural ones. In 1970, that gap was just five percentage points. Those mid-skilled jobs that used to be clustered in cities are now more likely to be found in rural areas.
Because of factors such as affordable housing and the type of urban jobs, those without a college education are less likely now to move to the cities. People who are college-educated, on the other hand, are more likely to move to urban areas and stay, unlike in the past. For now, technological progress is reinforcing these trends.
As Autor said, there is no land of opportunity for workers without a college education. That is a dismal state of affairs, and one that thousands of economists are just starting to confront.