Are you one of the lucky ones who has a job in the continuing recession? Hang on, ’cause the storm is coming.
Harvard U. economist Larry Katz warns that your well-paid, middle-class job is in danger.
For his part, Jeffrey Joerres, chief executive of ManpowerGroup, a Milwaukee-based staffing services firm, similarly warns that workers making about $40,000 to $80,000 a year constitute the bulk of labor costs for many companies, and these workers may be on the chopping block. Joerres said, “That’s your middle class. Companies are finding ways to reduce the number of people in those areas, and change the jobs to make them more simple, to reduce the skill that is required.”
In medicine, an example of a well-paid tech job that will be outsourced is radiology.
Kevin Hallock, director of the Institute for Compensation Studies at Cornell University, said: “I suspect that we will see fewer radiologists in the U.S. than we have in the past since…there is little reason for a radiologist to be in the same place as a patient. A radiologist can read a Terre Haute X-ray as easily in India as she can in Indiana.” MIT economist David Autor explains: “A lot of medical diagnostic work will be done overseas. You can have the initial diagnostic done elsewhere, and have a domestic supervising physician. Medical costs are a huge issue, and there’s enormous incentive to find ways to reduce these costs. The internationalization of medical services will be one of the important ways that costs will potentially be slowed.”
Another well-paid profession that will be affected is computer programming. Katz said, “What used to be good programming jobs, or routine legal work, these are things that are easily broken into parts, and done in other places.”
The legal field is also ripe for such job-slashing cost-cutting. Autor said that software can cut down on workers needed to sort through paperwork, such as legal documents. “You digitize all of those documents, and a piece of software reads them and catalogs them. There is a lot of legal work that is essentially increasingly subject to automation, and that will affect the opportunity set for lawyers.”
To illustrate, five television studios entangled in a Justice Department antitrust lawsuit against CBS saved $2 million in “discovery” costs by using computer software to examine millions of documents, instead of a platoon of lawyers and paralegals working for months at high hourly rates. “Discovery” refers to that essential step in a lawsuit when documents relevant to the suit are provided to the opposing counsel.
John Markoff writes in the New York Times, March 4, 2011, that, thanks to advances in artificial intelligence, “e-discovery” software can analyze documents in a fraction of the time for a fraction of the cost. The television studios turned to Blackstone Discovery of Palo Alto, Calif., which used the software to analyze 1.5 million documents for less than $100,000.
In his classic book, Political Man: The Social Bases of Politics, social scientist Seymour Martin Lipset first laid out the importance of the middle class to a democracy. The diminishing American middle class, therefore, has implications that go beyond economics, affecting the viability and survival of the American Republic.
The plight of the disappearing American middle class especially afflicts blacks. For that subject, go to Part Two of this series, “The Disappearing American Black Middle Class.”
Amidst the gloomy news, there is a sliver of light. Not all well-paid middle-class jobs are in danger; some occupations are growth areas. For that list, go to Part Three of this series, “20 Fastest Growing Occupations in America,” to be posted on Wednesday.