2018 was a year of robust growth, based on various economic indicators. Gross domestic product (GDP) growth was strong. Corporate profits reached impressive heights, especially in the technology sector. Americans last enjoyed a prolonged period of low unemployment in the 1950s, with current unemployment reaching a level not seen since 1968.
But this level of growth may not last much longer. There are signs that we may be heading into a recession in the next 12 months. Major manufacturers are laying off workers. The on-again, off-again, maybe-on-again trade war with China is injecting uncertainty into already jittery markets. Workers are still not seeing appreciable growth in real wages.
With 2018 officially behind us, we wanted to take a look back to determine which jobs have been booming along with the economy. We also look ahead to 2019, highlighting those jobs that are likely to thrive despite the threat of the coming storm.
The Tech Sector Drove the Majority of Growth in 2018
Much of the growth in the U.S. economy over the past year has been due to gains in the technology sector—a trend that was reflected in PayScale’s worker survey data. Of the 10 fastest-growing jobs in our crowdsourced salary data, half were in technology professions. We saw the largest increase in full-stack software developers in 2018, with a 572% increase in respondents compared to 2017. There is intense demand for highly skilled tech workers across industries. Unsurprisingly, the PayScale Index shows that salaries for tech workers are growing at a similarly fast clip, far outstripping wage growth for nontech roles.
The aforementioned demand for highly skilled workers has led to a critical labor supply shortage across the U.S. economy. Many employers feel the shortage of talent in science, technology, engineering, and mathematics (STEM) occupations and are placing an increased emphasis on employee experience in order to keep their high-skill employees engaged and happy at work. Organizations are hiring dedicated staff whose primary focus is to keep employees happy. Accordingly, we saw a 192% increase in employee engagement managers in 2018.
2018 also saw marked job growth for nonengineering roles in the tech industry, as well as tech-adjacent roles such as digital marketers. Social media roles continue to grow in importance across industries as brands fight for consumer attention. As a result, we saw a 294% increase in directors of community engagement in 2018.
We also saw a 234% increase in lead graphic designers, reflecting organizations’ increasing demand for marketing assets. Because both of these roles are so critical to an organization’s success in 2018, it is unsurprising to see jobs in this field growing rapidly.
Tech Will Continue to Lead the Way in 2019
While job growth will not be limited to the tech industry in 2019, the proliferation and adoption of technology across all sectors of the economy means that tech jobs will continue to boom. The highest-demand job areas in 2019 will be:
- Cloud computing
- Artificial intelligence (AI)
- Big data
- Virtual/augmented reality
- Digital marketing
We expect that jobs related to cloud computing and AI will see the largest growth in the coming year. Cloud computing has become an essential pillar of the modern economy and an area of intense focus for the world’s tech giants. Over the next year, cloud computing software developers will be in high demand, as Amazon Web Services, Azure, Google Cloud, and others will continue to ramp up and expand their cloud computing services to even more industries.
The broad adoption of cutting-edge technologies and mass data collection is already being seen in the AI space, which is impacting even informal jobs like babysitting. AI designers are in short supply, with even nonprofits paying extremely lucrative salaries for talented AI software engineers. Demand for those engineers, along with their pay, will likely see significant increases in 2019.
Both cloud computing and AI require collecting vast amounts of data to be successful, which is good news for data scientists. They will likely see increased demand and wages as organizations continue to emphasize collecting and utilizing big data.
Cybersecurity analysts are also in luck. The collection of vast quantities of data increases the risk and cost of cybersecurity threats. The ongoing stream of massive data breaches has shaken consumer confidence and increases the threat of government regulation in the tech space. Many companies are trying to shore up their cybersecurity teams to protect their customer data. As a result, we expect that the ranks of cybersecurity professionals will grow significantly in 2019.
We expect continued job growth in the marijuana sector in 2019, as attitudes toward marijuana usage continue to shift. Recreational marijuana is now legal in 10 American states, as well as Canada. An additional 23 American states have legalized marijuana on a limited basis. It’s very likely that more states will pass recreational marijuana laws in the near future. All this points to job growth in the cannabis industry, so don’t be surprised to see an uptick in budtenders in 2019!
Why We May Be Heading into a Recession
Common recession indicators such as the inversion of the yield curve suggest a recession is likely within the next year or two. Yield-curve inversions—when shorter-dated securities yield more than longer maturities—have preceded every U.S. recession in recent memory anywhere from 15 months to around 2 years.
This is coupled with corporate bond debt reaching unsustainable levels, with $3 trillion in bonds just above junk-bond status. Industries at risk include natural resource companies, especially oil and gas exploration, which account for a significant amount of outstanding corporate debt. That debt is unlikely to be serviced in the near term due to a prolonged fall in oil prices.
There are also structural issues in the housing market. In the past 40 years, only one year had fewer new home starts than 2017. A lack of new home starts is likely to drive up real estate prices, which is concerning given the intense demand for affordable housing across the country. However, the most recent release of the Case-Shiller index, which measures the appreciation of single-family home values, suggests a cooling of the housing market.
These divergent trends are coupled with a quiet revolution in American home financing: Nearly half of mortgages now do not originate from traditional banks. Given the lack of a traditional financing structure for many homes in the United States, it’s unclear whether the market is sufficiently robust to weather a future downturn.
Lastly, there is concern that the student debt bubble is about to burst. As tuition for colleges continues to rise, much of the financial burden is now falling on students. Student loan debt has doubled since the Great Recession in 2007, representing $1.5 trillion in outstanding debt across 44 million Americans. Only one in four of those 44 million debt holders is actively paying down both principal and interest on his or her loans. According to the U.S. Department of Education, some 43% of all student loans are in an economically distressed state, with 10% of those loans seriously delinquent. As such, the burden of student loans is likely to be a continued drag on consumer spending for the foreseeable future.
Given the combination of all of these signs, we expect to see at least the beginnings of a recession in the next 12 months. That being said, a recession won’t stop the rapidly escalating pace of technology adoption throughout the economy. We can safely say that job titles directly associated with that progress will continue to do well in 2019 and beyond.
To determine the hottest jobs of 2018, we calculated the percentage growth in data collected for all jobs in the PayScale database between February 2018 and November 2018. We then selected the 30 jobs with the largest growth, removing any executive titles and any titles with fewer than 25 data points in either sample period. The resulting sample consisted of 19,098 data points. For each job on the list, we also provided national median pay values using data collected between November 15, 2017, and November 15, 2018, and a sample of 5,928 data points.
For the 2019 predictions, we leveraged a combination of industry expert knowledge, data on the fast-growing jobs in our database for the 2018 retrospective, and data on skills seeing the largest pay increase in recent months. Combining these pieces together, we believe the job areas in demand in 2019 will be:
- Cloud computing
- Big data
- Virtual/augmented reality
- Digital marketing
For each of these areas, we provide a specific sample job and its associated median pay using data collected between November 15, 2017, and November 15, 2018, and a sample of 3,765 data points.
Total cash compensation (TCC): TCC combines the base annual salary or hourly wage, bonuses, profit sharing, tips, commissions, and other forms of cash earnings, as applicable. It does not include equity (stock) compensation, the cash value of retirement benefits, or the value of other noncash benefits (e.g., health care).
Median pay: The median pay is the national median (50th percentile) annual total cash compensation for the needed jobs. Half the people doing these jobs earn more than the median, while half earn less. This measure is not used in the ranking.
Growth in 2018: We first determined how much data we collected in a given job from February 1, 2016, to February 1, 2018. We then determined how much data we collected in a given job from November 30, 2016, to November 30, 2018. Lastly, we calculated the growth in 2018 as the percentage difference between these two samples and provided the 30 jobs that have experienced the most growth in data collection over 2018. A value of 100% would mean we ended the year with twice as much data as we started with, signaling that the supply of workers in this job increased significantly.
|Sudarshan Sampath is Director of Research at PayScale. Sudarshan grew up in America’s heartland (Ohio) and got his MSc in Economics and Econometrics from the University of Kent in Canterbury. In his spare time Sudarshan enjoys Ken Burns documentaries, Japanese fashion, hiking and searching for the perfect landscape photo.|