Here is a paper that looks at US employment data parses it into non-routine vs. routine categories. They find that routine jobs
have declined from close to 60% of the US economy in the 1980s to close 40% part of the economy with most of the jobs being cut during the recessions. The paper states that these lost routine jobs are middle class jobs that are disappearing as the middle class is hollowed out. Professor Siu came and presented the paper at U of C a couple of weeks ago. I had the opportunity to speak with him prior to his talk. He told me that both the Fed and national media were interested in his work. Perhaps because it was the end of the term, no faculty came to see him speak - only grad students. The paper's narrative is motivated by the story that these jobs are changing due to technological change, a choice Siu and his coauthor made because that is the convention in the labour literature. But, of course, economics views trade as the same as technological change since it allows you to expand your consumption choices beyond your production possibilities. We swapped outsourcing stories. With Chinese and Indian workers now competing to do the routine work in manufacturing (which btw they find to only be ¼ of the job loss story) and services combined with the rapid technological advancement of the digital age, the result is increasing structural unemployment.
Those who read these pages regularly will know that structural unemployment is one of the themes I have emphasized.I belieive it lies at the heart of European and US problems and that absent government intervention there can be no sustained recovery. Indeed if left unattended, this issue alone could destabilize the democratic regimes of the west. The elections in France and Greece are but one more warning signal of this impending danger.
There are couple of guests recently on Charlie Rose that have talked about this hollowing (7th minute) out issue and the need to address it.
"For if the trumpet give an uncertain sound, who shall prepare himself to the battle?" I Corinthians 14:8