Blue-collar workers could save the US from recession as the tech industry withers
The Biden administration has been pushing for a blue-collar boom, and that's coming to fruition.
As white-collar work contracts a bit, the labor market might rely more on blue-collar jobs.
But experts say those jobs need to be coupled with robust care, high wages, and unions.
The jobs recovery from the pandemic has been astounding — and you can thank your local blue-collar workers for that.
It stands in stark contrast to the ever-withering tech industry. After a pandemic-era tech jobs boom — and now bust — more and more Americans are returning to blue-collar work for better pay and more security. It's no secret that some tech workers are already leaving without a plan, or branching out into creating their own goods.
Data shows that if you want security, blue-collar service jobs are the way to go. Layoffs and discharges went down in retail trade in March 2023, and, while they ticked up a bit in leisure and hospitality, workers in that sector still felt comfortable quitting at higher rates than the economy's average quit rate.
"When you look at this recovery overall, the president talks about wanting to build an economy from the bottom up and middle out, and certainly that's what we see when we look at this recovery in terms of jobs," Heather Boushey, a member of the White House's Council of Economic Advisers, told Insider.
It's the blue-collar boom the Biden administration aimed for, and it may also be better for the economy. As AI stands poised to potentially remake white-collar work, blue-collar work may emerge even more resilient. The real challenge is making those jobs — which used to be enough to support workers and their families — back into sustainable careers.
"The best indication of the quality of the jobs out there for the blue-collar economy, if you want to call it that, is that it looks like we're going to have a summer of strikes across the country," Adam Hersh, a senior economist at the left-leaning Economic Policy Institute, told Insider.
Manufacturing and blue-collar work is picking back up
For decades before the pandemic, employment in manufacturing had been tumbling from the highs last seen in the 1970's. The Biden administration has been devoted to turning that around, pouring billions into projects devoted to bringing manufacturing jobs back stateside. So far, it seems to be working.
"Not only has this recovery been much steeper than prior recoveries — we have added jobs faster and quicker — but we've also seen much steeper recoveries in manufacturing, which has seen a historic recovery," Boushey said.
In April, the country added 253,000 jobs, more than expected as the labor market seemed destined for a larger cooling down and gains in the months prior were revised down. As Insider's Madison Hoff reports, the labor market has been "shockingly resilient" — keeping the country afloat and helping avert a recession. Construction added 15,000 jobs, as that sector's employment sits near historic highs, while manufacturing added 11,000 jobs — part of a steady uptick since 2020.
Once again, blue-collar service work helped power the jobs engine: Leisure and hospitality continues to be one of the economy's most robust job-adders, with accommodation and food services and retail trade also doing some heavy lifting, together adding another 31,000 jobs.
A blue collar boom could help ease some of the problems that ailed the country and led to higher prices across some sectors. For instance, the Biden administration has launched a massive push to bring semiconductor manufacturing to the US to reduce dependence on China and solve a pandemic-era semiconductor chip shortage, which led to skyrocketing prices and low availability for things like new cars and computers.
"By looking at where are these pain points in our economy and trying to say, 'we've got to make some of this here, it's critical,' we are creating jobs," Celeste Drake, deputy director for labor and economy at the National Economic Council, told Insider. "But we're making the whole economy more resilient, and all the workers are playing a vital role in that."
4 ways to make blue-collar jobs good jobs
There's still a problem, though, looming over the blue collar boom: As manufacturing has declined, so, too, have wages relative to the amount of hours worked.
"One visual that has really motivated the President from long before he became president is this chart that shows the gap that has emerged since 1980 between the wages paid to workers and the productivity that happens inside firms," Boushey said. "And these used to move in tandem for decades, and then sometime around 1980, they stopped moving in tandem and productivity began significantly outpacing wages."
Experts pointed to a few different ways to improve the quality of the jobs that might dominate the economy. One, according to Boushey, is ensuring that markets are actually fair and competitive — paring down on the power that employers have to set wages, what's called monopsony. Lina Khan, the chair of the Federal Trade Commission, previously told Insider that ending restrictive noncompete clauses in employment contracts blocking workers from moving to or starting their own competitors could encourage competition and help chip away at monopsony.
Robust child and elder care might be key, too.
"America's middle income workers and low income workers, they need access to care for both their aging loved ones and their children that is safe, affordable, and enriching," Boushey said. "And the only way to do that is for government to subsidize it."
Unions could also play a key role. Research from Cornell University's ILR Review has found that a worker who's in a union for their entire career was estimated to earn a million dollars more than someone who's never been in a union.
Importantly, workers without a college degree who are in unions their whole careers make more than workers with a degree, but who are not in a union — a key distinction for blue-collar workers, many of whom are powering robust gains in jobs for workers without degrees.
"There were times in the past where a lot of people think of manufacturing jobs and construction jobs as good jobs, and in many cases they are," Drake said. "But in the past, when both sectors had more union density, those jobs were even better."
And another key to the puzzle is treating blue-collar work with respect, like any other work — including high-paying tech jobs.
"When those workers aren't treated with the full respect that they deserve, or the recognition of their competence, the recognition of the important contributions they make, it can be a potential dignity threat," Kristen Lucas, an associate professor in college of business at University of Louisville who's studied the importance of dignity and narratives in blue-collar jobs, told Insider.
Already, Lucas thinks that the narrative around blue-collar jobs as not as good as white-collar work is changing.
"People are taking a good hard look at the rise of the cost of college tuition, the less security offered by white collar jobs. And all of a sudden white collar jobs don't look as fabulous in comparison," Lucas said.
"Some people are doing a real hard look at the things that they find intrinsically interesting, professionally and personally motivating," Lucas added. "The idea of building something with your hands, doing physical work, I think is really appealing to a lot of folks."
Are you thinking of taking the plunge into blue-collar work, or have you already? Email this reporter at email@example.com.
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