Our Work

Building a New Middle: How tech/ecommerce companies are creating good jobs for Americans with some college

• August 19, 2021

What would a new middle class look like? And which industries are leading the way?

We actually know who is missing from the middle class. More than one-quarter of American workers have some college (including an associate’s degree), but no bachelor’s degree. These are the people at the middle of the education distribution, and the single largest group (Figure 1) — but they are also the people who been betrayed by the transformations of the American economy in recent years.  They invested time and often took on debt to go to school, and discovered that employers did not want to pay them.

Over the past 30 years, workers with some college have seen their real earnings rise by less than 12%, slower than every other group including workers with only a high school diploma (Figure 2), As of 2019,  the average person with some college but no bachelor’s earned only $45,000, just $6,000 more than the average high school graduate. By comparison, the average person with a bachelor’s degree but no advanced degree earned $73,000 (Figure 3). That’s a huge payoff for the bachelor’s degree, but much, much less for some college.

In America, having a “middle” education does not mean earning a “middle” income or being part of the “middle” class. There’s a hole in the middle of the income distribution, and it’s hurting Americans.

But over the past few years, a surge in tech/ecommerce employment has begun filling in the middle. As of 2019, tech/ecommerce companies employed 1.8 million American workers with some college, in occupations like computer support specialists and network and computer system administrators. (That figure is based on our tabulations of the March 2020 Annual Social and Economic Supplement to the Current Population Survey, covering 2019 earnings and employment).

Moreover, tech/ecommerce workers with some college are paid more, on average, than workers with comparable education are getting elsewhere in the economy. The tech/ecommerce wage premium is 32% for workers with some college (Figure 4). Overall, tech/ecommerce workers with some college earned almost $60,000 in 2019.

Now, part of this tech/ecommerce premium is a composition effect. Tech/ecommerce workers skew more male than the overall population, and since men on average get paid more, that shows up as higher average wages. However, even when we take gender into account, the tech/ecommerce wage premium shrinks for workers with some college but does not disappear. Men with some college make 23% more in tech/ecommerce, on average, then comparable men with the same education. Women with some college make 20% more in the tech/ecommerce sector. That’s an important benefit of working in the tech/ecommerce sector.

For examples of the tech/ecommerce wage premium for workers with some college, a comparison to health care pay is instructive. Two-thirds of emergency medical technicians and paramedics have some college but no bachelor’s. Their median full-time weekly pay in 2019 was $912. Similarly, 60% of dental hygienists have some college but no bachelor’s, and their median full-time weekly pay was $1,094. By comparison, the median full time weekly pay for network and computer systems administrators, a tech occupation with a significant portion of workers with some college, was $1,447.

Geographically, the growth of tech/ecommerce jobs has been spread out around the country, much like manufacturing was. California is still at the top of the list with 291,000 new tech/ecommerce jobs created between 2016 and 2020, but other states with strong job creation include Florida, Ohio, Georgia, and Illinois (see table below, based on QCEW data for all education groups).

The problem of the missing middle did not spring up overnight, and it won’t disappear right away. But based on these trends, it may be time for young people to shift their aspirations away from healthcare occupations to the growing tech/ecommerce sector. That shift may alleviate some of the economic frustration and struggles that have become part of the political landscape.