The decline of middle-skilled jobs in the UK has been a headline topic of the economy for over a decade. Recent years have been no different and job polarisation in the UK continues to grow. Job polarisation describes a trend in the job market where the concentration of jobs moves away from middle skilled, middle income jobs towards the lower and higher income jobs. The job market is squeezed outwards by an increase in certain jobs at the expense of others, creating a widening gap and ‘polarised’ effect. This has important implications for people’s ability to move between jobs and across sectors. In the UK, high-skilled, high paying jobs are taking the majority of the employment share that middle sectors have lost. This is creating a widening gap between those who are in a position to participate in this top portion of the job market, and those who are forced back by barriers to entry. This review looks at the extent of job polarisation, its reinforcement through the education system, and its manifestation in existing social divisions. Firstly, a foundational description of the nature of job polarisation and its causes in the UK will be given, setting out the issue that is arising regarding social mobility and dwindling opportunities for occupational transitions. This will be followed by a description of who is being most affected by this polarisation, highlighting the role of existing divisions such as education attainment level and family background. The review concludes by analysing possible opportunities for rebalancing the job markets in favour of those who are currently missing out. Simply put, this review questions whether the current opportunities given by our job market - held in place by our education system - are another way of telling the population to ‘Stay put, you’ll get what you’re given’?
What is the nature of job polarisation in the UK?
Job polarisation is the reduction of middle-paying occupations in the job market, and the simultaneous growth of low and high-paying occupations. This characterises the job market as polarised at the two ends of the pay spectrum. According to a 2023 report from the Institute for Fiscal Studies (IFS), employment in traditionally middle-paying occupations in the UK decreased by 12% between 1993 and 2022 . At the same time, employment in low and high-paying occupations increased by 14% and 95% respectively (Xu, 2023, p2). This disproportionate increase for the high-paying occupations illustrates the nature of job polarisation in the UK in the last thirty years. The majority of employment growth can be found in the growth of high-paying sectors, partially at the expense of middle-paying sectors. In effect, the middle tier of jobs and the middle social class that did them are disappearing. Immediately, an issue arises for social mobility whereby there is limited opportunity for occupational transitions between low and high-paying sectors, where middle-paying sectors are shrinking.
Furthermore, research by Salvatori directly addresses job polarisation as a result of compositional changes in skills mix within the workforce. His findings conclude that the main feature of polarisation in the UK job market “has been a shift of employment towards high-paid occupations which have gained 80% of the employment shares lost by middling occupations” (2018, p3). This reiterates the findings of the IFS report by describing job polarisation as a simultaneous decrease in middle-paying occupations and increase in high-paying occupations, where the increase in high-paying occupations is notably large. The connection between these decreasing and increasing outcomes is at the root of the causes, and the effects, of job polarisation in the UK.
What has caused job polarisation in the UK?
Traditionally, the argument as to why polarisation has occurred in the UK job market has been owed to the automation brought with technological development. David Autor writes on the topic, describing how ‘As the price of computing power has fallen, computers have increasingly displaced workers in accomplishing explicit, codifiable tasks’ (2014, p9). The middle-paying occupations are the typical sectors where technology can easily (cost-effectively) substitute workers. It is in this sense that job polarisation has been considered since the rise of automation in the 19th century. Autor’s paper describes the bounds of substitution: a computer cannot be tasked to carry out a job that is not completely and explicitly understood (2014). This has protected the higher-skill occupations that have seen a boost in employment share in the last thirty years. Hence, a description of the role of technology in the substitution of middle-paying jobs becomes a simple description of the polarisation evident in the job market.
However, there are indications in some research on the topic of job polarisation that suggests an alternative underlying mechanism is driving the change. Salvatori recognises the significance of a growing number of graduates in causing the rise in high-paid occupations (2018). Equally, the work of Daniel Oesch examines the extent to which the rise of higher education in Western Europe has played a role in creating a larger number of high-skilled, high-paying occupations (2013). The amount of 18-64 year old individuals in the workforce with a degree rose from 13% in 1993 to 42% in 2022 (Xu, 2023, p13). The expansion of higher education in the UK and the subsequent rising number of graduates has a direct effect on the skills mix of the labour force. Employers respond to this, as well as technology change, which influences the occupational structure of the job market. Therefore, the effects of job polarisation can also be owed, at least in part, to the nature of the UK’s education system.
Who is it affecting?
It is important to understand how job polarisation is affecting different types of workers, according to their social capital. Those who start in life with high social capital, able to attain a high level of education, and enter a high-paying occupation may be the ones reaping the benefits of job polarisation in the last thirty years. Those who begin with low social capital, do not move on to higher education, and enter the workforce in a low-paying occupation may be finding it harder and harder to mobilise upwards. If this can be empirically evidenced, the employment structure in the UK will be actively driving social divisions.
Firstly, to highlight the role of educational attainment, a finding of Salvatori’s study shows that the gains and losses of job polarisation are a function of initial education level. He found that those with the lowest initial education level are the sector of the workforce that have lost the largest employment share. Meanwhile, those with the highest initial education level are the sector of the workforce that gained the largest employment share (Salvatori, 2018, p6). This mirrors the view that job polarisation is connected to a growing number of graduates.
A recent study isolates the role occupation has in determining social mobility. It finds that there is a negative relationship between the extent of polarisation in the job market and the degree of social mobility (Garcia-Penelosa et al 2023). What this means is that as polarisation takes place, the ability for people to use occupational transitions in order to gain human capital and access a higher income decreases. Those who start their careers in low-paid occupations have a decreased chance of mobilising upwards over their careers. At the same time, as the employment share of high-skilled jobs increases, the advantage for those who come from a high-income background grows. This is shown in Garcia-Penelosa and colleagues’ study where they find that out of those who begin in a low-income initial occupation, those who come from a high-income background have an increased chance of upward mobility since polarisation has occurred (2023, p17 ). This is particularly noteworthy as it works against the common trend, stressing the significance of family background in determining the distribution of effects that job polarisation brings. While initial occupation and initial educational level matters, family background can substitute as social capital for those that would otherwise have limited social mobility. To expand, Garcia-Penelosa and colleagues found that parental income created a greater advantage for those born in 1970 than those born in 1958. More specifically, increasing parental income by one standard deviation gave those born in 1950 a 21% increase in the chance of entering a high-paying occupation. In 1970, the same increase in parental income gave a 73% increase in the chance of entering a high-paying occupation (Ibid, p11). This verifies the extent to which family background dictates an individual’s intra-generational mobility (the degree of mobility across occupations over an individual’s lifetime).
Two conclusions can be drawn from these findings. Firstly, the positive effect of growth in high-income sectors is correlated to a negative effect of ‘missing out’ for others. Where ‘missing out’ entails decreasing access to upward social mobility through occupational transitions. Secondly, the division of these effects is a function of family background and educational attainment. These two factors are interconnected since family background can affect the level of education an individual attains. In short, your starting position matters.
How to combat the negative effects of job polarisation?
As the research shows, the losses and gains of job polarisation are a function of initial education level. Those with a higher initial level have received the gains of high-income occupation growth. Moreover, those with a high-income family background are protected from the negative effects of polarisation; even if they have a low-income occupation, a high-income family background gives an individual an increased chance of upwards social mobility. It could be said that job polarisation is a trend that works against the least well-educated and the least well-off. By understanding these effects, we can look towards solutions that counteract the reinforcement of social divisions that job polarisation brings with it.
Acknowledging the role that initial education level plays verifies what Garcia-Penelosa and colleagues write at the start of their study. ‘It is the possibility of learning that will create a relationship between the structure of jobs and mobility’ (2023, p4). The reduced access to learn more and receive further training for those with low initial education levels who go into low-paying sectors is a key part of their limited social mobility. Evidence of the ‘skills gap’ in society contributes to the nature of job polarisation. Staton writes that the UK has a need for staff that is growing more quickly than workers are gaining the skills and experience to fill them. They quote the Employers Skill Survey which reports that 36% of all 2022 UK vacancies were due to skills shortages. They also quote the Learning and Work Institute who report that over the past decade, government investment in adult education has halved, and spending on training has fallen by 28%. This shows that polarisation in the job market is correlated to the decreasing amount of money and resources given to allow further education and skills acquisition for workers, especially those who begin in low-income sectors. This indicates that to increase the social mobility for those who are currently stuck at the start line of career progression, more should be done to provide the education and training these workers need to progress upwards. Furthermore, this education and training cannot rely on workers’ ability to afford it themselves which would merely reinforce the current bias towards those with wealthy family backgrounds.
To add, employers are easing off on qualification requirements. The number of UK job postings that don’t require a degree went up by 90% in the year 2021-22 (Berwick, 2023). The university degree itself isn’t the golden ticket to a high-paying career it once was. So, what is? Writing for the Financial Times, Jacobs highlights what it is that university offers to individuals beyond formal qualifications. They quote the Social Mobility Foundation who emphasise the ‘lifelong career advantage’ that the social connections made in university create for graduates (2023). In essence, higher education sets individuals up with the social capital that unlocks doors which remain closed to others, even if that social capital is no longer evidenced by the degree itself. It is clear that the rise in graduates has meant that higher education is becoming the narrow path individuals have to follow in order to access high-paying jobs. Therefore, investment in alternative opportunities for those from low-income backgrounds or those who won’t attend higher education before starting work to acquire the social capital needed to mobilise upwards is the key to reworking the effects of polarisation away from existing social divisions.
Finally, despite the clear divisions this review has stressed, the effects of job polarisation are creating negative effects that extend beyond the sectors and individuals that are disproportionately ‘missing out’ on the gains of high-income employment growth. There is evidence to suggest that the increasing number of graduates is saturating the higher end of the workforce. The graduate premium still exists in the UK: £130,000 more earned across a lifetime for men, £100,000 for women (Britton et al, 2020, p7). However, it has been steadily decreasing in past years (Stansbury, Turner & Balls, 2023). This implies that the job market is slowing in its ability to restructure for the growing pool of graduates, and not all graduates will see a distinct benefit from their degree. In fact, the IFS reports that ‘the group most negatively affected by patterns of occupational change in recent decades may not be low-skilled workers but rather graduates from poorer family backgrounds who are unable to fully capitalise on their education’ (2023, p3). Consequently, even a high level of educational attainment cannot guarantee career security and mobility in the current state of the job market.
One response to the broad issue of job polarisation is given by David Autor in a recent NPR: Planet Money article. Having extensively studied the effects of polarisation in the US, Autor proposes a reimagining of the uses of new technology. It is suggested that artificial intelligence could play an equalising role for the workforce. The powers of artificial intelligence (AI) could be used as a tool for low and middle-skilled workers to more easily overcome the barriers to entry for higher-paying, higher skilled jobs. In other words, AI could make elite expertise that comes with higher education, or more commonly, a career within high-paying occupations, cheaper and more accessible (Rosalsky, 2023). The employment structure that lets those who start at the top stay at the top could be destabilised to the advantage of those who start their careers with less knowledge and less social capital. Paired with the potential of the skills gap and increased spending on adult training and education, this offers a unique opportunity for those currently undermined by a polarised job market.
The disproportionate growth of high-income occupations in the last thirty years characterises job polarisation in the UK. The boom of higher education is providing an increasing number of graduates that has helped to shape this change. However, the saturation at the higher end of the employment structure is becoming an issue, even for the graduates themselves. The dominating outcome of job polarisation is a repression of social mobility, to the effect that an individual’s starting position in life is playing an increasingly significant role in determining their intra-generational mobility. Educational attainment acts as a contributing factor whereby the portion of the workforce with the highest initial education level have reaped the largest gains from polarisation. But family background remains an overshadowing factor, since even those who receive a university education will be held back by a low-income family background. It seems, then, that job polarisation is implying to rising generations that ‘you’ll get what you’re given’ and, try as they might, there is a dwindling opportunity to mobilise upwards from their initial background and education. This being the case, the potential to restructure a bias system lies in government spending on adult education and on-the-job training programs in response to the opportunity evidenced by the current skills gap problem within UK vacancies. Similarly, AI could be reimagined as an equalising force for low-skilled workers. In the right context, individuals could use the technology to match the expertise of those who continue to benefit from the social capital provided by higher education and high-skilled occupations. If these counteractive actions succeed, it may well be that you can get what you’re given, and then some.
Autor, D. (2014). ‘Polanyi’s paradox and the shape of employment growth’, NBER Working Paper Series. Available at: http://www.nber.org/papers/w20485 [Accessed 06/01/24]
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Garcia-Penelosa, C., Petit, F., & Ypersele, T. (2023). ‘Can workers still climb the social ladder as middling jobs become scarce? Evidence from two British cohorts’, Labour Economics, 84, pp1-28.
Jacobs, E. (2023). ‘University is more than just a springboard to a job’, Financial Times. Available at: https://www.ft.com/content/daf145c6-99fa-4c53-bc76-3fd3f77c076a [Accessed 06/01/24]
Oesch, D. (2013). ‘Occupational change in Europe: how technology and education transform the job structure’, Oxford: Oxford University Press.
Rosalsky, G. (2023). ‘What of AI could rebuild the middle class?’, NPR: Planet Money. Available at: https://www.npr.org/sections/money/2023/05/09/1174933574/what-if-ai-could-rebuild-the-middle-class [Accessed 06/01/24]
Salvatori, A. (2018). ‘The anatomy of job polarisation in the UK’, Journal for Labour Market, 52 (8), pp1-15.
Stansbury, A., Turner, D., & Balls, E. (2023) ‘Tackling the UK’s regional economic inequality: binding constraints and avenues for policy intervention’, Contemporary Social Science, 18 (3-4), pp318-356.
Staton, B. (2023). ‘Yawning skills gap pose ‘a real challenge’’, Financial Times. Available at: https://www.ft.com/content/7c8d5393-f84e-4d23-8c61-da2f40e9896f [Accessed 06/01/24]
Xu, X. (2023). ‘The changing geography of jobs’, Institute for Fiscal Studies. Available at: https://ifs.org.uk/publications/changing-geography-jobs [Accessed 06/01/24]