New York Fed Study Examines Job Polarization and Rising Wage Inequality

by Sabrina I. Pacifici on October 1, 2012

“Over the past three decades, employment opportunities in both the United States and the New York-northern New Jersey region have become increasingly polarized into high- and low-skilled jobs, according to a recent New York Fed study. Technological advances and globalization have created new jobs for workers at the high end of the skill spectrum and largely spared the service jobs of workers at the low end, but have displaced many middle-skill workers. In their study, Job Polarization and Rising Inequality in the Nation and the New York-Northern New Jersey Region, authors Jaison Abel and Richard Deitz explore the phenomenon of job polarization and examine its impact on the New York-northern New Jersey region. They examine the economic forces behind job polarization, chiefly technology and globalization. The computer revolution, for example, created jobs for high-skill workers such as engineers and scientists, but displaced many routine middle-skill jobs, particularly in manufacturing and administrative support. Low-skill jobs that require personal contact, such as health care aides and food service workers, were largely shielded from these forces.”

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