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Middle-Income Jobs Finally Show Signs of a Rebound

William C. Dudley of the Federal Reserve Bank of New York announced job gains on Thursday.Credit...Dave Sanders for The New York Times

The American economy is finally creating more middle-income jobs, according to a new analysis released Thursday by the Federal Reserve Bank of New York, in a turnabout from the feast-and-famine pattern earlier in the recovery, when hiring was strongest at the bottom and top of the wage scale.

The findings suggest that it may soon be time to retire a familiar criticism of the long but lackluster economic rebound that has been underway since the end of the Great Recession in 2009: the hollowing out of the American middle class.

Between 2013 and 2015, employers added nearly 2.3 million workers earning from $30,000 to $60,000 a year, primarily in fields like education, construction, transportation and social services. That was roughly 50 percent more than in either the high-wage or low-wage categories during the same period.

By contrast, the Fed researchers found, of the nearly 7.6 million jobs created from 2010 to 2013, only about a fifth fell into the middle-tier category, with the largest number instead coming from lower-paid sectors like food preparation and health care support.

“The tide has begun to turn,” said William C. Dudley, president of the New York Fed. “For the first time in quite a while, we are seeing gains in middle-wage jobs actually outnumber gains in higher- and lower-wage jobs nationwide.”

Although the economy has created nearly 15 million jobs since employment bottomed out in early 2010, the gains in the recovery have been noticeably uneven. While many cities along the East and West Coasts have been prolific job creators, parts of the Midwest and South have not experienced similar improvements.

At the same time, most American workers have made only paltry wage gains until recently, despite steady hiring that has helped bring the national unemployment rate down to 4.9 percent last month from a high of 10 percent in late 2009.

“It’s important, but we are coming off of a really low threshold,” said Diane Swonk, a veteran independent economist based in Chicago, referring to the new Fed study. “We’ve shifted gears, but we’re only now beginning to regain the quality in terms of jobs.”

“We’ve got a long way to go,” Ms. Swonk added, noting that after inflation, family incomes were still below where they were in 2000. “It’s more than a lost decade.”

The nascent national improvement identified by the Fed researchers in New York also held true in the metropolitan region in recent years, with New York City and surrounding suburbs adding 179,000 middle-wage jobs from 2013 to 2015, compared with just 18,000 from 2010 to 2013.

The shift coincided with the passing of the baton from finance to technology as the major driver in local job creation.

More than any area in the United States, with the possible exception of San Francisco, New York City has come to symbolize an economy built on vast gains for a lucky few, with most everyone else largely standing still.

But as the motor of New York’s economy, Wall Street is yielding to Silicon Alley and Brooklyn, as technology companies like Google and smaller start-ups bulk up while banks and hedge funds slim down.

Since 2010, tech employment in New York City has jumped by 53,000, while securities industry jobs have increased by just 12,000.

In fact, with 172,400 workers in 2015, employment in the New York securities industry remains well short of where it peaked before the financial crisis. There were more than 125,000 tech workers in New York City last year, nearly double the total a decade ago.

“In the past, the city has counted on job growth from Wall Street to fuel economic growth during recoveries and expansions,” Mr. Dudley said. “This time around, however, job gains in the securities industry have been quite meager.”

Hiring in fields like internet publishing, online shopping and scientific research and development, Mr. Dudley added, “is picking up much of the slack created by the softness of the securities industry.”

The local tech boom has also spread the largess well beyond the canyons of Wall Street. Private sector job growth in Brooklyn, Queens and the Bronx was stronger last year than it was in Manhattan.

While technology companies are still mostly based in Manhattan, Brooklyn has benefited from what economists call a multiplier effect, as young tech workers move to the borough in search of more affordable housing and patronize restaurants, clubs and other services there.

The South Bronx, once synonymous with urban decay, is also on an upswing, especially around the markets in the Hunts Point area, said Jason Bram, a researcher with the New York Fed. Queens has benefited from its proximity to local airports.

Suburban counties like Rockland, Westchester and Nassau are also prospering again, and closer-in counties in New Jersey, like Bergen, Essex, Middlesex and Monmouth, are finally showing signs of life.

Still, large parts of upstate New York, including Binghamton, Elmira and Syracuse, are struggling economically. Ithaca and Albany have been exceptions upstate, paced by gains in education and emerging fields like nanotechnology.

There’s plenty of need for further improvement, Mr. Dudley said, but he suggested that the increase in middle-class jobs since 2013 may mark a turning point in the recovery.

“This is an important development in the economy,” he said. “If it were to continue, it would create more opportunities for workers and their families who have been struggling up to now.”

A version of this article appears in print on  , Section B, Page 1 of the New York edition with the headline: The Fed Sees Mid-Income Jobs Finally Rebounding. Order Reprints | Today’s Paper | Subscribe

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