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Age and Adaptation

The recent appearance of automobile executives on Capitol Hill and their dire warnings about the threats to their industry reminded me of another brutal transformation that their industry experienced in the late 1970s and early 1980s, when foreign competition and increased use of robots caused the loss of many assembly-line jobs. Routine jobs such as spray painting and spot welding, which used to employ large numbers of American workers for good salaries, were taken over by either Japanese workers or automation.

The recent appearance of automobile executives on Capitol Hill and their dire warnings about the threats to their industry reminded me of another brutal transformation that their industry experienced in the late 1970s and early 1980s, when foreign competition and increased use of robots caused the loss of many assembly-line jobs. Routine jobs such as spray painting and spot welding, which used to employ large numbers of American workers for good salaries, were taken over by either Japanese workers or automation.

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This painful loss of jobs was part of a trend throughout manufacturing and, to some extent, in other industries as well. A January 2009 research paper by two economists, David Autor (of M.I.T.) and David Dorn (of Boston University), “This Job is ‘Getting Old:’ Measuring Changes in Job Opportunities using Occupational Age Structure,” looks at how this trend has affected the mix of skill levels among jobs in the economy and the demographics of the people holding these jobs.

The economists describe a “hollowing-out” of the occupational mix over the past 25 years, with a steep decline in the workforces of occupations that require a middle level of skill and pay a middle level of wages. Those middle-of-the-distribution jobs involved routine tasks that could be either automated or shipped overseas. At the same time, there have been increases at the tail ends of the skill and wage distributions, where you’ll find high-paying nonroutine jobs that require a high level of skill (such as physicians, lawyers, and managers) and low-paying nonroutine jobs that require low skills (such as truck drivers, security guards, or landscaping workers). The low-skill jobs are not threatened by automation because they demand recognition of language or some other kind of low-level decision making that cannot yet be automated, and the jobs must be performed on-site and therefore cannot be offshored.

You probably are already aware of these trends and the economic forces behind them, but the interesting part of the paper was where the researchers looked at the ages of workers. This topic interested me in particular because in Best Jobs for College Graduates and other books in that series, I usually identify subsets of occupations that have high percentages of younger workers (age 16 to 24) and older workers (age 55 or older). In their analysis of differences between the workforces in 1980 and 2005, the economists also looked at the level of education of workers.

They found that after workers lacking a college education disappeared from middle-of-the-distribution jobs (because the jobs themselves disappeared), a roughly equal number of these workers were to be found in low-skill jobs. With college-educated workers, on the other hand, the movement away from vanishing middle-skill jobs was split equally in both directions. Some college-educated workers were able to move up to high-skill jobs, but others were forced downward into low-skill jobs.

And here’s where age made a difference: The upwardly mobile college-educated workers were almost entirely young, whereas older college-educated workers were the ones consigned to low-paying jobs. So the Wal-Mart greeters of a certain age whom you meet may not all be former steelworkers with only a high school education; some of them may be former bookkeepers with college degrees.

It may seem paradoxical that college-educated workers should experience so much worse outcomes. As the researchers comment, “Highly-educated workers are clearly better prepared to adapt to changing occupational opportunities, and thus it is to be expected that college-educated workers are reallocating upwards as well as downwards.” Nevertheless, they note, this is not the case for older workers.

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The researchers do not assign a reason for this phenomenon, but I suspect it has happened mostly because older workers, though capable of adapting by learning up-to-date skills, have failed to do so as well as the younger workers. Perhaps employers have also been more willing to invest in retraining younger workers.

But the lesson is clear: Keep your skills up to date and don’t assume that a piece of paper saying you have a college degree will make you employable in a high-skill job.

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