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1 - the workforce

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To set the stage for understanding what work, workers, and workplaces will be like in twenty-first century America, we need first to appreciate the demographic, educational, and employment changes that have shaped the American workforce of today.

... what is past is prologue.
William Shakespeare
The Tempest.

THE U.S. POPULATION IS BECOMING LARGER AND MORE DIVERSE

Who are the workers of the future? Many of them will be older versions of ourselves. In fact, over half of the population of 2030 are alive today.

Over the next fifty years, the population of the United States is expected to grow by nearly 50 percent, from about 275 million in the year 2000 to an estimated 394 million people in 2050. U.S. population growth is influenced by immigration and emigration rates, as well as by birth and death rates. Immigration will play the largest role in the growth of the United States through mid-century.1

Immigration trends tell us to expect 820,000 immigrants to arrive annually in the United States. Two out of three will be working age upon their arrival. By 2050, we expect immigration to have increased the U.S. population by 80 million people. Fully two-thirds of the projected U.S. pop-ulation increase will be due to net immigration.2

In addition to immigration, the other key determinants of the U.S. population size will be birth and death rates. Particularly important to the American labor force is the large number of people born after World War II, from 1946 to 1964. This baby-boom generation--which has been a major force in the labor market for the past 20 years--has now reached its prime working years and makes up about 47 percent of the workforce.3 The youngest baby boomers, just reaching 35 years of age, will continue to participate in the workforce for many years. As this population ages, the median age of the workforce will rise.

Between 2011 and 2029, the baby boomers will be reaching the traditional retirement age of 65. Their retirements will dramatically affect the workforce of the future. Not only will the demo-graphic profile of the workforce change considerably, including a rise in the number of people with disabilities, but millions of Americans will be faced with balancing work and family, particularly the care of elderly parents. (See chapter 3 for a fuller discussion.)

Despite the fact that the post-baby-boom generation (born after 1964) is much smaller in size, the number of youths is expected to rise by 2020, partly as a result of immigration. In 2000, there will likely be over 70 million children under 17 years of age. By 2050, this under-17 population is expected to rise to over 96 million.

The other key component of population change is the death rate. Over the next 50 years, the number of deaths annually is likely to increase nearly 50 percent.4 In just 30 years, baby boomers--now 30 percent of the population--are projected to drop to only 16 percent. 5 Nevertheless, the oldest age groups are projected to increase their share of the population through the middle of the next century. In 1995, 33.5 million people were age 65 or older, and, by 2050, the elderly population is expected to more than double, representing 20 percent of the population.6

Life expectancy is projected to rise from 76 years in 1995 to 82 years in 2050.7 Even those already 65 years old have life expectancies of an additional 15 to 20 years. Because all of the increase in older Americans after 2030 can be attributed to increases in the number of people 75 years and older, there may be little direct effect on the composition of the workforce, although the impacts on families, jobs, and the marketplace (such as demand for medical services) will likely be significant.8

The changing face of the workforce

Masked in these total population changes are the details of race and ethnicity. Immigration trends, coupled with varied birth rates, will bring more diversity to the American workforce. In 1995, the United States was estimated to be 83 percent white, 13 percent black, 1 percent American Indian, Eskimo, and Aleut, and 4 percent Asian and Pacific Islander.9 Ten percent of Americans, mostly blacks and whites, were also of Hispanic origin. Nearly one in eleven Americans was foreign born.10

text versionChapter 1 Table: Percent distribution of the population

Chart 1.1 shows an alternative view of the U.S. population distribution: although Hispanics are typically white or black, they are shown here as a separate category, independent of racial back-ground. Looked at either way, the data show that the future racial and ethnic makeup of America will be considerably different than it is today. Trends show that whites will be a declining share of the future total population while the Hispanic share will grow faster than that of non-Hispanic blacks. By 2050, minorities are projected to rise from one in every four Americans to almost one in every two. The Asian and Pacific Islander population is also expected to increase. Growth rates of both the Hispanic-origin and the Asian and Pacific Islander populations may exceed two percent per year until 2030. Even at the peak of the baby-boom era, the total population never grew by two percent a year. By 2010, Hispanics are likely to become the largest minority group. In fact, after 2020, the Hispanic population is projected to add more people to the United States every year than will all other groups combined.11

EDUCATIONAL ATTAINMENT IS RISING

Deciding how far to go in school is one of the most important decisions an American worker makes, regardless of his or her race or ethnicity. Educational attainment plays a critical role in virtually every labor market outcome. On average, the more education

people have, the more likely they are to seek and find jobs, earn higher wages, and retire with a pension. (See chapter 2, Employment, wages, and benefits, for a discussion on earnings.)

Nearly 83 percent of all adults ages 25 and over have completed high school, and 24 percent have obtained a bachelor’s degree or more. This is a dramatic increase from just 30 years ago, when fewer than 54 percent of this group had completed high school and fewer than 10 percent had completed college.12 And as the younger populations age, the average educational attainment of the population will continue to rise. Eighty-seven percent of young adults, 25 to 29 years old, completed high school in 1997.

Though educational attainment is universally rising, levels vary considerably across racial and ethnic lines. Looking at 1997 data on young adults, Asian Americans have the highest high-school graduation rates at over 90 percent. For the first time in 1997, the high-school graduation rates for young blacks and whites were statistically on par at 86 and 88 percent respectively. High-school completion rates that year, however, were far lower--62 percent--for young Hispanics. Particularly troubling is that over the decade, there has been no significant change in the rate of high-school completion for young Hispanics.

The lower educational attainment rates for Hispanics are, in part, due to lower high-school completion rates by Hispanics who immigrated to the United States. High-school completion among all foreign born is considerably lower than among the native born--65 percent versus 84 percent. For example, the proportion of foreign-born Hispanics with less than a high-school diploma was almost twice as high as that of native-born Hispanics--57 percent compared with 31 percent.13

Not only are more Americans graduating from high school, but more are going to college. (See chart 1.2.) Sixty-six percent of 1998 high-school graduates entered colleges or universities in the fall. This proportion has risen over the last two years, after remaining steady from 1992 to 1995 at about 62 percent. This trend is expected to continue as the rewards to those with more schooling continue to rise and attract more young people to college. (See chapter 2 for more details.)

Nearly two-thirds of the new college students were enrolled in four-year institutions, while the rest attended two-year colleges. Young women enrolled in college at higher rates than young men--69 percent and 62 percent, respectively--a trend likely to help close the gap between women’s and men’s average earnings. Although blacks and whites graduated from high school at roughly equal rates, at the end of the century, blacks continued to lag behind in both enrollment in and graduation from college. Nearly seven out of ten young white high-school graduates went on to college compared to only six of ten young black high-school graduates and five out of ten young Hispanic graduates.14 Of those 25 and over, just 13 percent of black and 11 percent of Hispanics were college graduates in 1997, compared to 25 percent of whites and 42 percent of Asian and Pacific Islanders.15

text versionChapter 1 Table 1.2: Percent of high school graduates enrolling in college

The gap between the education levels of people with disabilities and those without is particularly troubling. The percent of adults with disabilities who have not completed high school is more than double that of adults with no disabilities. And fewer than 10 percent of adults with disabilities have graduated from college, 16 a rate achieved by the general population 30 years ago.

Nevertheless, the situation is improving. Laws and policies requiring equal access for people with disabilities, coupled with advances in assistive technologies, should soon result in rising rates of educational attainment for people with disabilities. Additional education not only improves the chances of labor market activity for workers with disabilities but reduces the gap in labor market participation between people with severe or significant disabilities and those with no disabilities. (See chart 1.3.)

text versionChapter 1 Table: Percent distribution of the population

Educational attainment has a significant impact on earnings levels throughout a worker’s life. Differences in educational attainment across these groups, among other factors, will cause the wage and pension gaps among these groups to persist.

WOMEN ARE WORKING MORE; MEN ARE WORKING LESS

Clearly, the level of labor force participation is an important determinant of earnings. A worker who puts in more hours and weeks of work generally receives higher total earnings. In 1997, 78 percent of all employed persons usually worked full time (35 hours or more a week), a proportion little changed since the early 1970s. In contrast to the stability over time in average weekly hours worked, there has been a noticeable trend toward more year-round work. During 1997, 72 percent of people with any work experience worked year round (at least 50 weeks), compared with just 65 percent thirty years earlier. (See table 1.1.)17

text versionChapter 1 Table 1.1: Work experience of the population

This trend towards year-round work primarily reflects the increasing likelihood of employed women working year round. Since 1967, the percentage of women participating in the labor force has increased by nearly half, from 41 percent to 60 percent, and the proportion of employed women working year round has climbed by 18 percentage points, from 52 to 70 percent. During the same period, the labor force participation rate of men has actually declined, from 80 percent to 75 percent, and the proportion of employed men working year round rose only slightly, from 74 to 77 percent.18

Full-time year-round work varies considerably by age. Over the past few decades, more prime age workers (25 to 54 years of age) were working full time year round, rising from 52 percent to 63 percent. In contrast, full-time year-round participation of the young is dropping as they stay in school longer. In the future, we can continue to expect the young to reduce their labor force participation as the need for additional education rises. owever, a decline of older workers’ participation has begun to reverse with the economic expansion and will likely continue as long as good employment opportunities remain plentiful. Rising trends in full-time and year-round status are likely to continue.19

Employment rates differ significantly between men and women, and those differences will likely continue into the future. While women’s employment rates are rising and men’s rates are declining, women are expected to continue to leave the labor market periodically to assume the lead role in child rearing. Since 1950, the proportion of men in the labor force has declined from 86 percent to 75 percent. In contrast, the trend for women is on the rise. In 1950, one-third of women worked outside the home. Almost fifty years later, 60 percent of women are in the labor force.20

Women are increasingly working prior to having children and returning to the workforce while their children are still preschool age. This is particularly likely for families maintained by single women, a group that is growing significantly. In 1975, 16 percent of mothers with children under six years of age did not have a spouse in the house-hold; by 1998, this figure was 26 percent.21


1U.S. Bureau of the Census, Resident Population Projections of the United States: Middle, Low, and High Series, 1996 to 2050, March 1996, http://www.census.gov/population/projections/nation/npaltsrs.txt; downloaded May 31, 1999. Middle series is used above.

2 Jennifer Cheeseman Day, Population Projections of the United States by Age, Sex, Race, and Hispanic Origin: 1995 to 2050, U.S. Bureau of the Census, Current Population Reports, P25-1130, U.S. Government Printing Office, Washington, D.C. 1996; February 1996, table C-2 and p.2. http://www.census.gov/prod/1/pop/p25-1130; Middle projections used above. Change is estimated from July 1, 1994 to 2050.

3 U.S. Department of Labor, Bureau of Labor Statistics, Current Population Survey, first quarter 1999.

4 U.S. Bureau of the Census, Resident Population Projections of the United States: Middle, Low, and High Series, 1996 to 2050, March 1996, above information from pp. 2-9 and Table F. There are expected to be 4 million deaths in 2050.

5Day, p. 7. Data as of 1995.

6U.S. Bureau of the Census, Resident Population Projections of the United States: Middle, Low, and High Series, 1996 to 2050. p. 10.

7Day, p. 4.

8 U.S. Bureau of the Census, Resident Population Projections of the United States: Middle, Low, and High Series, 1996 to 2050, Table B1.

9Day, p. 1.

10 U.S. Bureau of the Census, How We're Changing: Demographic State of the Nation: 1997, Current Population Reports, P23-193, March 1997, p. 2.

11 Day, p. 1.

12 Jennifer C. Day and Andrea E. Curry, Educational Attainment in the United States: March 1998 (Update), P20-513, October 1998, U.S. Department of Commerce, Economics and Statistics Administration, Census Bureau. Time series available at http://www.census.gov/popula-tion/socdemo/education/tablea-02.txt

13 Jennifer C. Day and Andrea E. Curry, Educational Attainment in the United States: March 1997, P20-505, May 1998, U.S. Department of Commerce, Economics and Statistics Administration, Census Bureau, pp. 2-4.

14U.S Department of Labor, Bureau of Labor Statistics, Current Population Survey. See "More High-School Graduates Enrolling in College." The Editor's Desk, October 19, 1998. Additional information is available from news release U.S. Department of Labor USDL 98-171, "College Enrollment and Work Activity of 1997 High School Graduates."

15 Day and Curry, p. 3.

16 National Organization on Disability/Louis Harris & Associates, "1998 N.O.D./Harris Survey of Americans with Disabilities." Press release available at http://www.nod.org/presssurvey.html.

17 U.S. Department of Labor, Bureau of Labor Statistics, "More People Are Working Year-Round." The Editor's Desk, December 8, 1998. These data are a product of the CPS. Additional information is available from news release USDL 98-470, "Work Experience of the Population in 1997."

18U.S. Department of Labor, Bureau of Labor Statistics, Current Population Survey.

19U.S. Department of Labor, Bureau of Labor Statistics, Report of the American Workforce, 1999, forthcoming (Chapter 3, table 3-5 in draft).

20U.S. Department of Labor, Bureau of Labor Statistics, Current Population Survey.

21 William Goodman, "Boom in Day Care Industry the Result of Many Social Changes," Monthly Labor Review, August 1995, p. 5.

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