But that is not the case.
We might find a reasonable explanation on the dynamics of the job market impacted by the ongoing digital revolution. For most of us, it has been a while since last significant salary raise. Smart marketers are acutely aware of the trend, holding prices of services and goods down, and preserving a healthy demand growth while pushing inflation to lower levels. Despite many macroeconomic dynamics the FED and other organisms are looking up to solve the puzzle, we might have a plausible answer in the subtleties of the job market. Here is what we at Collective Brains think about this.
Many simultaneous micro-dynamics are ongoing, resulting in an unforeseen jobs creation polarization process on the two ends of the wages spectrum. The trend is an explosion of jobs in the gig economy and other low wage ones on one end, and a healthy demand for highly educated jobs, especially STEM ones on the other. In the middle, every position is at risk of displacement as most companies aim to increase profitability by deploying new technologies and flatting the organization. Technologies like automation, machine learning, AI, and robotics are progressively replacing human jobs at scale, and that is especially true for that middle management population, where computers are starting to understand context, process Natural Language and develop cognitive capabilities. The aim is to eliminate jobs with higher compensation by both reducing managerial levels and organization levels, with a positive impact on the bottom line. Top lines can be positively impacted too as the process also creates more agility and increase employee’s overall efficiency, freeing time to give customers more attention.
At a macroeconomy level, even though we might see low unemployment rates, the numerically subtle tradeoff of highly compensated jobs by the explosion of low wage ones will keep average labor earnings stagnated or declining. That trend shows the real threat the fourth industrial revolution is posing on the middle class in the next decades, and numbers are starting to show.
Let's look at some of them.
First, the most recent Bureau of Labor Statistics (BLS) study projecting job growth by major occupational groups to the year 2024 shows that out of the top 15 occupations with the most job growth since 2014, 12 or 80% of them present median annual wage below the national average of 35,540 dollars. It seems the job market is skewing lower by job profile and driving growth of occupations that make less money (table 6).
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