It is now well known that offshoring and automation, in that sequence, have dramatically affected the labor markets in developed economies. Routine, repetitive, and outsourceable jobs, which form the vast majority of the labor market, have fallen prey to these trends. Only those requiring high skills and cognitive resources, and less skilled manual jobs in caring and assisting occupations have escaped the trend.
The St Louis Fed has a graphic that capture these trends. It shows how routine cognitive (sales and office occupations) and routine manual (construction, transportation, and manufacturing) occupations have been declining since the eighties.
Here too, migration has the effect of increasing the supply of labor available for the manual jobs, thereby depressing wage growth and crowding-out local labor. Those with non-routine cognitive skills are the only real winners in the economy. The attendant widening of inequality is only to be expected.
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