The Great "Hollowing Out" of the U.S. Job Market
Authors: Nathan Sheets, PhD, Chief Economist and Head of Macroeconomic Research, PGIM Fixed Income; George Jiranek, Associate, Global Macroeconomic Research, PGIM Fixed Income
In assessing the strength of the U.S. labor market since the global financial crisis, it is important to consider the quality of the jobs that have been created. This paper finds that the jobs created through the current expansion have a distinct “barbell” feature consisting of a remarkable hollowing out of jobs in the middle of the income distribution.
These findings highlight some of the deep drivers of rising income inequality in the U.S. Given that the forces in play seem likely to be persistent, policymakers, market participants, and individual workers are well-advised to embrace these trends and tailor strategies to harness the opportunities that they will generate.