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Jobs using technology are more common in some parts of the country than in others, according to a recent study. The divide is leading to a widening wage and skills gap.
As technology has grown to play a much bigger role in most people’s jobs, a curious divide has arisen: Jobs using technology are more common in some parts of the country than in others. This gap, according to a new study by The Brookings Institution, could “spawn troublesome divides among not just people, but also places.”
The study found that in 2002, only 9% of jobs around the country involved spending a large amount of time on computers or other forms of technology. By 2010, the prevalence of those kinds of jobs had doubled to 18%, and in 2020, they made up a quarter of occupations.
But this change hasn’t happened as much in some parts of the country as others, and it’s led to gaps in wages because the jobs that involve using technology the most, like being software developers, IT technicians and financial managers, pay more than others where technology is less important.
“Workers of every stripe—from corporate finance officers to salespeople to utility workers and nurses—are now spending sizable portions of their workdays using tools that require digital skills,” Brookings said in a 2017 study, which found that the importance of technology had risen in 517 of 545 occupations analyzed from 2002 to 2016.
But there are major differences in where jobs that involve technology exist.
According to the study, technology is an important part of 30% of the jobs in the 56 largest Metro areas in the country. But in the 500 areas examined with populations between 10,000 and 50,000 people, technology is important in only 20% of the jobs. In Odessa, Texas, and Apppleton, Wisconsin, for example, only 15% to 19% of jobs require high computer skills.
The fact that jobs that involve technology the most are skewed toward some areas is significant because people in those lines of work made on mean $79,000 in 2020. Those who spend a medium amount of time using technology made $54,000. And those who spent little time using technology made only $35,000.
That, the study said, helps explain why areas where the jobs most involve using technology, like Boulder, Colorado, San Jose, California, and Washington, D.C., have the highest mean annual wages, ranging from $70,000 to $100,000.
But in places where digital skills are the least important, like in Elkhart-Goshen, Ind. and Twin Falls, Idaho, mean annual wages are around $50,000.
Making matters worse, researchers found that the difference in wages is widening. A decade ago, people with jobs that most involved technology made 41% more than those with jobs that involved a medium amount of technology. Now the difference is 47%.
“We have a tier of very digital places that are pulling away like the coastal superstar hubs,” said Mark Muro, a senior fellow at Brookings Metro and a co-author of the study, referring to Silicon Valley and Seattle, among other tech hubs.
In part, the gap is widening because it is self-perpetuating. Places with jobs that most involve technology attract people who are able to use technology. Wealthier places are also more likely to train people in technology. If nothing is done, the gap could continue to widen, Muro said, “and other areas could fall back farther.”
Another disparity that’s emerged after the pandemic, according to the study, is that being able to work from the comfort of home has “enhanced many workers’ lives.”
In 2020, three-fourths of jobs that most involve technology could be done at home. In comparison, only about a fourth of jobs where technology is of medium importance and only a tiny percentage of jobs (.3%), where technology is the least important, could be done remotely.
To address the widening divide, the Biden administration has directed more “place-based” grants to these areas in an effort to increase digital skills. Congress has also passed over the past two years nearly $80 billion in grants to fund local projects around the country to address the issue.
A Brookings study looking at those grants found that 19 programs contained in the American Rescue Plan (ARPA), the Infrastructure Investment and Jobs Act, and the CHIPS and Science Act will go toward changing the economies in certain parts of the country.
A provision in the CHIPS law aimed at boosting the manufacturing of semiconductors in the U.S., for example, will create regional technology hubs in areas other than places where technology is already an important part of the economy, like Silicon Valley.
The $1 billion Build Back Better Regional Challenge included in the ARPA law has sent grants ranging from $25 million to $65 million to 21 regions. Among the programs funded in the challenge, according to the Commerce Department’s Economic Development Administration, was a $62.8 million grant to spur more clean energy and green economy jobs in 21 economically distressed and coal-impacted counties in southern West Virginia. Another grant will send $25 million to grow advanced manufacturing in the economically-distressed eastern side of Buffalo, New York.
The recent spending, though, is still “modest” compared to what’s needed “to make a dent,” Muro said. “This needs to be scaled up. There are hundreds and hundreds of communities around the country that need to change.”
Kery Murakami is a senior reporter for Route Fifty.