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DOCUMENT RESUME CE 074 422 ED 409 463 Judy, Richard W.; D'Amico, Carol AUTHOR Workforce 2020: Work and Workers in the 21st Century. TITLE Hudson Inst., Indianapolis, IN. INSTITUTION ISBN-1-55813-061-6 REPORT NO PUB DATE 97 175p.; For "Workforce 2000," see ED 290 887. NOTE Hudson Institute, Herman Kahn Center, P.O. Box 26-919, AVAILABLE FROM Indianapolis, IN 46226; telephone: 1-800-HUDSON-0. Books (010) PUB TYPE MF01/PC07 Plus Postage. EDRS PRICE *Aging (Individuals)/ Change; Competition; Economic DESCRIPTORS Development; Employment Opportunities; *Employment Patterns; Employment Projections; *Futures (of Society); Global Approach; International Relations; *Labor Force Development; *Labor Market; Labor Needs; Labor Supply; *Technological Advancement ABSTRACT The sequel to "Workforce 2000," this book lays out the general contours of the employment landscape depicting the many roads to "Workforce 2020" and offers the best ideas about what lies ahead and what workers should do to prepare for the journey. Chapter 1 examines the forces shaping the U.S. economy: rapid technological change; further global integration of the economy; rapid economic growth in certain developing nations; deregulation and liberalization, both nationally and globally; and demographic change. Chapter 2 discusses the following: how and why the nature of work is changing; the growing irrelevance of gender in the workplace; the extent to which job security is decreasing; the increase in temporary employment; the shift away from work in traditional offices made possible by "telecommuting" alterations in earning patterns; and emerging changes in occupational structure. Chapter 3 focuses on change in the composition of the work force. It examines the growth and aging of the total population; the resultant growth and aging of the work force; and the gradual ethnic diversification of both population and work force. Chapter 4 provides a list of what not to do, general recommendations to building a prosperous and dynamic Workforce 2020. Notes and an index are provided. (YLB) ******************************************************************************** Reproductions supplied by EDRS are the best that can be made from the original document. ******************************************************************************** . "1 I , 1 Ill I k U S DEPARTMENT OF EDUCATION Mee of Educational Research and improvement ATIONAL RESOURCES INFORMATION ED CENTER (ERIC) This document has been reproduced as received from the person or organization V originating it Minor changes have been made to improve reproduction quality Points of view or opinions stated in this document do not necessarily represent official OERI position or policy PERMISSION TO REPRODUCE AND DISSEMINATE THIS MATERIAL HAS BEEN GRANTED BY ) e.; LI/Lc TO THE EDUCATIONAL RESOURCE INFORMATION CENTER (ERIC) EST COPY AVAILABLE 2 WORKFORCE 2020 WORK AND WORKERS IN THE 21ST CENTURY 3 WORKFORCE 2020 WORK AND WORKERS IN THE 21ST CENTURY Richard W. Judy and Carol D'Amico With contributions by Gary L. Geipel Justin A. Heet Donald K. Jonas Alan Reynolds William Styring III Hudson Institute Indianapolis, Indiana 4 Hudson Institute Indianapolis, Indiana ISBN #1-55813-061-6 Copyright © 1997 Hudson Institute, Inc. All rights reserved. No part of this publication may be reproduced, by any process or technique, without the express written consent of the pub- lisher, except in the case of brief quotations embodied in critical articles and reviews. The views of this book are solely the views of the authors. No opinions, statements of fact, or conclusions contained in this document can be properly attributed to Hudson Institute, its staff, its members, or its con- tracting agencies. Printed in the United States of America This book may be ordered from: Hudson Institute Herman Kahn Center P.O. Box 26-919 Indianapolis, Indiana 46226 (317) 545-1000 1-800-HUDSON-0 5 CONTENTS List of Illustrations viii x Acknowledgments xii Preface Executive Summary 1 Chapter One: The Forces Shaping the American Economy 11 Rapid Technological ChangeThe Seminal Force 12 The Impact of Information Technology on the Economy 13 IT Offers Clues for the Future 15 Further Global Integration of the U.S. Economy 22 The Share of America's Manufacturing Workers with Export- Related Jobs is Large and Rising 26 Globalization Greatly Benefits America 26 29 Export-Related Jobs Pay Well America's Foreign Trade Deficit Reflects Our Low National Savings Rate and the Nation's Attractiveness to Foreign 29 Investors Rapid Economic Growth in Populous, Export-Oriented Developing Nations 30 Asia's Rapid Economic Growth is Likely to Continue for Many Years 31 Low-Skilled American Manufacturing Workers Face Increasing Direct Competition 33 Deregulation and Liberalization, Both Nationally and Globally 36 Boomer Demographics: The Middle Aging of America 38 Broader Markets for Products, Services, and Capital 39 Diminishing Monopoly and Intensifying Competition 40 Everywhere Booming Local Markets 43 44 The Continuing Shift of Production from Goods to Services 48 Summary: Implications for the American Workforce vi Workforce 2020 Chapter Two: Changes in Work, Compensation, and Occupations 51 The Changing Nature of Work 51 Gender Shift in the Workplace 52 Dynamic Labor Markets 54 Contingent and Alternative Work Arrangements 54 Telecommuting 57 What Has Happened to Earnings? 59 Growing Dispersion of Earnings 59 Income Mobility 60 Skills and Education Strongly Influence Earnings 62 The Earnings of Whites, Blacks, and Hispanics 63 Higher Education is No Guarantee of Higher Earnings 66 Jobs of the Future 69 Jobs and Employment in the Early 21st Century 69 Job Growth is Most Rapid in the Best-Paying Occupations 75 Growing and Shrinking Occupations 77 Skills for Growing Occupations: Will There be a Deficit? 81 Summary 83 Chapter Three: The Workforce to the Year 2020 87 Slow Population Growth Ahead 89 Regional Disparities in America's Population Growth 91 The Graying of the American Population Will Radically Alter Social Security 92 Slow Growth for the Workforce 97 Raising the Retirement Age: Implications for Labor-Force Participation 100 More Older Americans Will Keep Working Longer 103 Older Americans in the Workforce: Implications for Everyone 104 Making Retirement More Affordable 107 The Gradual Diversification of the American Population and Workforce 107 Workforce 2000 and the Diversification of the Workforce 110 Workforce Skills and Education: Implications of Diversification 114 Summary 118 Table of Contents vii Chapter Four: Rising to the Challenges of Workforce 2020 121 2020: One America, Three Worlds 122 2020: The American Dream Never Worked This Well 123 What Not To Do 125 Don't Protect Sweatshops 125 Don't Demonize Technology 127 Don't Make It Too Expensive to Hire or to Fire 127 Better Ways Forward 128 Understand the Challenges 128 Expand the Pool of Workers 129 Increase Workforce Participation 131 Promote Upward Mobility Through Job Training and Education 133 Primary Education Comes First 134 Don't Lower Higher Education 136 Rising to the Challenges 140 Endnotes 143 Index 153 About the Authors 159 About Hudson Institute 160 ILLUSTRATIONS Figures Moore's law in action: computer power doubling every 18-20 1-1. months Transport and communications costs have plummeted in the 20th 1-2. century World trade outpaces world output growth 1-3. Foreign trade also grows in the U.S. 1-4 Exports outpace economic growth in Asia's rapidly developing 1-5. economies Low-skilled workers in developing countries are paid less, rela- 1-6. tive to the highly skilled, than they are in the U.S. Although manufacturing employment as a whole dropped from 1-7. 1983-1993, managerial, professional, and marketing jobs actually increased 2-1. On average, better educated workers earn better 2-2. The relative sizes of the major occupational categories will change gradually 2-3. Distribution of jobs by required skill level: language development Distribution of jobs by required skill level: mathematics develop- 2-4. ment Distribution of jobs by required skill level: reasoning development 2-5. Official projections of the total U.S. population to 2050 vary 3-1. widely Population growth in the West and South outstrips the rest of the 3-2. nation America ages, 1900-2050 3-3. Female labor force participation will continue to rise for nearly 3-4. all age groups Male labor force participation fell until the mid-1990s, especially 3-5. in the older age groups 3-6. The labor force will grow slowly barring an increase in labor force 9 participation rates Illustrations ix Employer-provided health insurance coverage has been declining 3-7. The ethnic composition of the American workforce is gradually 3-8. changing In California, white non-Hispanics will comprise a minority of 3-9. every age group in the population under the age of 50 by the year 2010. 3-10. Students from different ethnic groups tend to concentrate in some- what different fields Tables U.S. manufacturing jobs depend increasingly on exports 1-1. 2 -la. Percent distribution of employment of bachelor's degree holders, males aged 35-44, by earnings quintile and major field of study, 1993 2-1 b. Percent distribution of employment of bachelor's degree holders, females aged 35-44, by earnings quintile and major field of study, 1993 U.S. job growth to 2005 2-2. Projected changes in major occupational categories, 1994-2005 2-3. Employment change from 1989-1995 and median earnings in 2-4. 1993; by industry and occupation The 25 fastest growing occupations, 1994-2005 2-5. The 25 fastest shrinking occupations, 1994-2005 2-6. The ratio of the prime working age population to the elderly is 3-1. falling Labor force participation rates for educated men remain high 3-2. 3-3. How the workforce composition is changing: getting the arith- metic right 0