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The Polarization of the Labor Market

The U.S. Bureau of Labor Statistics (BLS) has released a report projecting which occupations are expected to experience the greatest number of new jobs over the next 10 years. Given the current economic and jobs situation, one might assume things can only improve.  

But according to the new BLS Occupational Outlook Handbook, most of the job growth projected through 2018 will occur in what are traditionally low-skill, low-pay jobs.   Seven of the top 10 – and six of the top seven – occupations projected to grow have median annual wages of less than $30,000. These include occupations such as home health aides, customer service representatives, food preparation and retail sales. Only registered nurses (#1), accountants (#8) and postsecondary teachers (#10) are top-growing occupations with median wages above $30K.  All three achieve around $60K annually. 

Harvard University economist Lawrence Katz discussed the implications of this during an interview on NPR’s Morning Edition radio program on Monday. Katz described a “polarization of the labor market”, with growth at the low-end and high-end of the market but less growth in the middle. 

Professsor Katz went on to say that education and “professionalizing” the skills of the low-wage workers is an opportunity for those workers to earn more. He said that changing the focus of education is necessary and that workers should be focus on skills like problem solving, interpersonal relations and teamwork. 

While interpersonal skills may be a way for those in traditionally low-wage jobs to move up the earnings ladder, other research has shown that even at managerial levels, good interpersonal skills correlate to higher earnings. TRACOM’s Managerial Success Study found that managers with higher Versatility performed better in dozens of job criteria and earned more than their lower interpersonal skills peers. 

What do you think? Do interpersonal skills lead to higher wages? Can interpersonal skills help workers provide more value?

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