“Hollowing Out” of Middle Class Jobs and a Student Loan Debt Bomb
The Forum for Innovation reads the Internet so that you don’t have to, sharing a short list of curated blog posts for your Friday reading.
According to Brad Plumer, we’re seeing a “hollowing out” of middle class jobs, and this will have a chilling effect on the long term health of the economy. A study by the San Francisco Fed found that mid-wage jobs accounted for 60% of job losses in the Great Recession, yet 27% of the gains in the following years. Low-wage jobs, on the other hand, accounted for 58% of job gains post-recovery, after having made up “only” 21% of job losses in the recession. Stagnant job growth appears to be most acute in the construction, manufacturing, insurance, real estate, and information technology industries. As if that’s not bad enough, middle-class workers who lost their jobs in the recession will earn 11% less over the next 25 years compared to those who were fortunate enough to hold on to their jobs. The San Francisco Fed sees those in the middle-class today having to accept lower wage jobs in a bid to just find a job—any job. Who’s to blame for this? Some say it’s the rise of robots, many others point to the government. Either way, Americans are in need of good jobs.
Student loan debt has nearly tripled since 2004, with the average balance up 70%. It is the only kind of debt that has increased during the Great Recession. The weight of this debt burden is felt most acutely among Millennials, and we should watch these numbers of ran indication on how the rising generations will function in the marketplace. And in further commentary, Quartz asked whether student loans are the next “debt bomb.”
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