During the economic downturn, employers ratcheted up their pre-reqs within specific jobs—and they still haven’t stopped.
The Great Recession profoundly transformed the American landscape of work. Roughly 9 million jobs disappeared from 2007 to 2010. Occupational wages tanked. Overqualified workers flocked to underpaying jobs. Employers not only cut positions—they eliminated occupations they could automate, thanks to new technology. The share of the American workforce with jobs that primarily consist of routine tasks reportedly plummeted to about 25 percent in 2008, after declining steadily from 35 percent in 1970.
Even as the economy has recovered and the U.S. has gained jobs, it’s been in two divergent tiers: low-wage work that still requires some thinking on your feet, like food service, and in much higher-wage occupations that require expanded cognitive and analytical skills.
Employers take recessions as an opportunity to restructure their workforce in subtler ways, too. According to new research published in the National Bureau of Economics, the recent downturn acted as a catalyst for employers to crank up skill requirements within specific occupations. This, too, is connected to widening access to technology that’s supposed to be “labor saving”—now that certain tasks can be automated, new jobs emerge to essentially manage those technologies and analyze their output. For example, a sales job that used to consist of developing relationships with customers now involves using data analysis tools to target products for certain clients. A quality control manager who used to sit scanning products moving along a conveyor belt may now spend her time troubleshooting the machine that scans them for her.
Perhaps you’ve noticed this “upskilling” in your own field or last job search. It’s a kind of surge of rising employer expectations: a desire for higher education, more experience, and ever-sharper thinking. This might seem like an opportunistic move on the part of employers, preying on desperate, over-qualified job-seekers during a recession. But the trend persisted even as the economy has recovered, with more postings ratcheting up their expectations for specific roles. According to the NBER research, the recession-induced restructuring means that, as of 2015, it was about 12 percent more likely for any online job ad you encounter to have an education, experience, or specific cognitive skill requirement, compared to the pre-recession era.
In some ways these findings present a counterargument to the oft-heard post-recession tale of the barista with a master’s degree: While some workers absolutely have jobs they’re overqualified for, others might have been hired into those roles because they had advanced skills that weren’t previously required.
The study’s authors, Brad Hershbein of the W.E. Upjohn Institute for Employment Research and Lisa B. Kahn of Yale University’s School of Management, made use of pretty remarkable dataset: They dug into what they call the “near universe” of online job postings from 2007 and 2010-2015, as gathered by the occupational analytics firm Burning Glass Technologies. They compared positions listed under the same codes between those time periods, and found that in metropolitan statistical areas particularly hard hit after the recession (which they judged based on changes in expected job growth), skill requirements were more likely to increase within those jobs, compared to the same areas prior to the recession and to cities that weren’t as hard hit.
Rust Belt cities and tourism- and housing-based economies such as those in Riverside, CA, Las Vegas, NV, and Grand Rapids, MI, were among the hardest-hit by both job losses and the attendant upskilling, while some of the least-affected MSAs included Albany, NY, Springfield, Il, and Trenton, NJ. (Some of the latter cities, it must be remembered, were not doing so hot prior to the recession.)
Online job postings obviously don’t represent all the vacancies in the job world; lower-skilled hourly jobs, for example, were slightly underrepresented. But the researchers were able to adjust for these inconsistencies. Thanks to the vast data set, they were able to show that the “majority of this ‘upskilling’ is driven by increases in skill requirements within occupations,” rather than a shift in the job postings themselves. And this trend isn’t just playing out in job ads: the researchers compared the Burning Glass data to Census numbers to find that, indeed, companies are actually hiring the more-competent workers they want.
Hershbein and Kahn’s analysis didn’t allow them to get a good sense of how many jobs, or what share of the workforce, have been affected by upskilling. But, as Hershbein writes via email, if every metro area had experienced a really bad recession, “our estimates imply that roughly 200,000-250,000 of the 5.5 million or so vacancies that exist today would have an education or experience requirement that they otherwise would not if they had not experienced the recession 7-8 years ago.”
For both good and ill, upskilling is an increasingly important dimension of the shifting labor market. More and more routine-based jobs are all but guaranteed to disappear, and employers will likely continue to turn up the heat on the prereqs. To keep up, workers need to increase their marketable skills as much as possible. Unfortunately for those who got laid off when their routine-based jobs were handed over to robots and computers in the first tier of this workforce restructuring, those jobs aren’t coming back. Nor might those workers have much opportunity to gather the skills and education necessary to move up into existing positions.
Job retraining programs do exist at various levels of government, but this research helps point out a basic flaw with those services: They’re reactive. “We wait until people lose their jobs to do something to help them,” Hershbein says. “We need to be more proactive in a system where we’re constantly expecting people to keep their skills up to date”—while they still have a regular paycheck.
The findings also help explain the very well-documented decline in blue-collar jobs, as well as the employment rate among the men who largely held them, two factors often used to help explain the popularity of Donald Trump and his promise to “Make America Great Again.” But employers won’t be handing out the routine-based jobs that workers once did in that vanished country—to the contrary, they will likely continue vying for better educated and higher skilled workers. Without opportunities to evolve their resumes, some workers will just get left further behind.