I stumbled upon a research article titled, Stuck in Part-Time Employment by Jonathan L. Willis at the Federal Reserve Bank of Kansas City. The analysis is interesting because Willis divides the labor force into 3 skill segments (low-skill, middle-skill, and high-skill) and notes the number of jobs in the middle-skill segment continues to languish below pre-recession levels while both the low-skill and high skill segments have long surpassed pre-recession highs. Willis explains the economic forces behind weak job growth in the middle-skill segment are likely structural, possibly due to advances in technology and increases in globalization.
"... the economy has five million fewer middle-skill jobs than in December 2007. If the employment growth rate over the past four years continues, it would take an additional 13 years for the number of middle-skill jobs to return to December 2007 levels. Given this long-term weakness in labor demand, elevated PTER (Part-Time for Economic Reasons) in middle-skill jobs appears to be a structural issue."
Willis goes on to contrast this with job performance in the low-skilled segment, which surprisingly maintained positive job growth during the recession. Therefore, the weakness in low-skill jobs was likely a cyclical factor, explains Willis. The level of PTER in the low-skill segment has steadily decreased during the recovery. If the labor recovery continues, PTER in the low-skill segment will return to pre-recession levels by mid-2020.
Finally, Willis notes demand for high-skill labor has been the strongest segment.
I thought this analysis was quite insightful into the dynamics of the U.S. labor market, particularly relative to the typical 2 segment breakdown of low-skill versus high-skill.
Michael Grove, CFA