Low-paid and mid-paid jobs rebound
Employment in the EU increased by around 1.8 million between the second quarters of 2013 and 2014, the largest year-on-year increase since the beginning of the global financial crisis in 2008. Eurofound’s latest research on the nature of the upturn indicates that this rally is in large part due to a recovery in low-to-mid-paid jobs.
Between 2008 and 2013, the job destruction caused by the recession was concentrated in mid-paid jobs, mostly as a result of the huge job losses in the manufacturing and construction sectors. This is shown in the first two charts in Figure 1 below, which illustrate the percentage employment change per annum across five categories (quintiles) that classify all jobs in the EU from lowest-paying (1) to highest-paying (5).
Note: 1 = low-paid, 2 = mid–low-paid, 3 = mid-paid, 4 = mid–high-paid, 5 = high-paid
Employment continued to grow in highest-paying jobs throughout this period. Employment in the lowest-paying jobs also tended to be more resilient than in mid-paid jobs, suffering relatively modest losses.
The most recent data, for 2013–2014 (shown in the third chart above), is something of a break from this pattern in that most of the net new job creation has been in the low-to-mid-paid quintiles. This suggests that there has been a recovery or replacement of jobs previously destroyed as market conditions improve.
Rebound in manufacturing
While services continue to account for most of the recent employment growth (more than 7 out of every 10 workers in the EU now work in services), manufacturing employment has shown some increase since the middle of 2013, both in mid-paid technician occupations and in well-paid managerial and administrative roles.
The construction sector, however, continues to shed employment, mainly in the lower quintiles of the wage distribution.
Of the jobs that employ large numbers of people (at least 500,000), the fastest growing are service sector jobs in the highest-paid quintile, such as ICT professionals in computer programming and business professionals in management consultancies. But other lower-level service jobs, such as personal care workers in various sectors, have also shown fast growth.
As for large-employing jobs showing fast decline, the greatest relative fall in employment was in customer service clerks in financial services, probably reflecting the twin impacts of post-crisis job-cutting and the migration of basic bank-telling functions to the internet.
Three predominantly state-paid jobs also showed fast rates of decline – clerical grades in public administration, personal service workers in education, and cleaners and helpers in health services – reflecting pressures on the public sector pay bill post-2011.
A number of jobs in retail and wholesale are also in this group, suggesting that the replacement of workers by technology is having a strong impact in these sectors, resulting from the spread of self-service and online shopping. It may also relate to the post-crisis rationalisation of retail activity in the EU, evident in the rapid cross-border spread of large discount retailers and the associated decline of smaller retail outlets, as well as the demise of large, traditional retailers such as Woolworths in the UK and Arcandor in Germany.
Further detail on Eurofound’s research into recent change in the employment structure can be found in the European Jobs Monitor 2015.