San Antonio is a good place to begin exploring the relation between jobs and the severe financial distress that may lead to bankruptcy. For one thing, it lies in one of the federal judicial districts (Western Texas) that was included in earlier studies so that we have data from more than one point in time. For another, the changes in its economy over the past two decades illustrate developments that we believe are important to understanding the fault lines in middleclass America. Our data suggest that job-related income interruption is by far the most important cause of severe financial distress for middle-class Americans.
Job-related financial stress is implicated in over two-thirds of the bankruptcies we studied. Although layoffs are a major factor, middleclass people can find themselves in serious trouble even if they have a job because the job may change and both income and benefits may erode. If there is a single, dominant crack in middle-class security, it is the fissure related to jobs and the changing structure of employment. The structure of employment risk we have found tracks the evolution of the work force in San Antonio and throughout the country. These factors continued to operate throughout the 1990s, fueling a record number of bankruptcies even amid record low unemployment.
San Antonio never appears on the lists of cities with high unemployment rates, but a quiet transformation of the 1980s changed San Antonio with results familiar to residents of the rust belt, the Pacific coast, or New England: the job mix changed. For the sake of simplicity, we might classify jobs as requiring either high or low skills from the worker, and as providing either high or low pay in return. There are then four possible categories: high skill–high wage, high skill–low wage, low skill–high wage, and low skill–low wage. During the 1980s, the proportion of San Antonio jobs that fell within each quadrant of this categorization shifted.
Some good jobs came to San Antonio, providing high pay for high skills. These good new jobs overwhelmingly employed skilled service professionals, people with college educations and often advanced degrees. Between 1980 and 1990, San Antonio added 23,678 high skill– high wage jobs, a little over half of them in medical and dental services and laboratories, and nearly 17 percent each in education, law, and management services.
But many of San Antonio's new jobs were less attractive. San Antonio gained even more new jobs - 26,552 - in the low skill–low wage sector. Although these jobs were also service jobs, they required little in the way of formal credentials. Over half were in eating and drinking establishments, with food stores, hotels, and amusement services accounting for the remainder.
Such jobs keep the worker out of the unemployment line, but they typically offer low pay. They are more likely to be part-time or seasonal, and they rarely provide fringe benefits. Chances for promotion and greater job security are slim. Even so, where such jobs are plentiful, few people are likely to be looking for work, because these jobs are readily available to anyone who can run a cash register or wipe a table.
Academics call this phenomenon job polarization: the loss of middle-range jobs, leaving only the extremes of high skills and wages and low skills and wages. San Antonio lost nearly 9,000 low skill– high wage jobs in textiles, food, transportation and equipment, and electrical manufacturing. Another 5,600 jobs disappeared in construction and railroads. With relatively low levels of schooling, many workers who were displaced from these jobs had few options in the new high skill–high wage sector.
Their principal option was to seek jobs in the growing low skill–low wage sector, with a resulting loss of income, benefits, and job security. Workers just entering the labor market found that therewere few low-skill jobs with high wages open to them. The sea change in employment is captured in one statistic: for every four low skill–low wage or high skill–high wage jobs San Antonio gained, a low skill–high wage job was lost, most of them jobs in manufacturing. The polarization of income follows close onto the polarization of jobs.
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