The Labor Market of the 1980s: Unemployment Omens in a Growing Economy

This report provides discussion over the nature of job growth, the labor market of the 1980s, and the skill and pay ladder.

SUMMARY ISSUE DEFINITION BACKGROUND AND ANALYSIS Economic Relationships The Unemployed Involuntary Part-time Discouraged Workers Summing-up Job Growth A National Problem? Policy Implications LEG1 SLATION FOR ADDITIONAL READING THE LABOR MARKET OF THE 1 9 8 b : UNEMPLOYMENT WENS I N A GROWING ECONOMY I n J u l y 1 9 8 1 t h e U n i t e d S t a t e s economy peaked a n d t h e economic d o w n t u r n which l a s t e d u n t i l December 1982 began. Not u n t i l more t h a n 4 y e a r s l a t e r (March 1 9 8 7 ) d i d t h e a v e r a g e number of unemployed i n d i v i d u a l s f a l l t o t h e l e v e l i t was b e f o r e t h e r e c e s s i o n began. The unemployment r a t e i t s e l f i s o n l y 0.9 o f a p e r c e n t a g e p o i n t l o w e r t o d a y t h a n i t was a t t h e s t a r t of t h e r e c e s s i o n ( 6 . 3 % v s . 7.2%). T h i s i s t r u e i n s p i t e o f t h e f a c t t h a t s i n c e t h e end o f t h e r e c e s s i o n t h e economy h a s g e n e r a t e d more t h a n 13 m i l l i o n j o b s . Why h a s n ' t t h e l e v e l of unemployment f a l l e n below i t s p r e - r e c e s s i o n low? Why d o e s t h e American worker a p p e a r t o h a v e a c c e p t e d t h i s h i g h l e v e l o f unemployment? What i s t h e p r o g n o s i s f o r t h e l a b o r m a r k e t i n t h e i m n e d i a t e f u t u r e and what a c t i o n s i s t h e 1 0 0 t h C o n g r e s s t a k i n g t o d e a l w i t h t h e problems c u r r e n t l y c o n f r o n t i n g t h e American w o r k e r ? Economic g r o w t h o v e r y e a r a s measured by real employment g r o w t h h a s been into the labor force; it level significantly. t h e p a s t 2 y e a r s h a s been modest ( u n d e r 3% a g r o s s n a t i o n a l product change). Consequently, a b l e o n l y t o a b s o r b new e n t r a n t s and r e e n t r a n t s h a s n o t been a b l e t o r e d u c e t h e unemployment The p o o l of unemployed w o r k e r s t o d a y i s made u p o f many d i v e r s e g r o u p s ; t h u s , p o l i c i e s and programs may need t o be c r a f t e d t h a t t a k e i n t o a c c o u n t t h e comnon a s w e l l a s t h e u n i q u e problems o f t h e s e g r o u p s . The p r o b l e m s o f j o b - s e a r c h d i s c o u r a g e m e n t and i n v o l u n t a r y p a r t - t i m e employment h a v e a l s o been r a i s e d r e c e n t l y . S i m i l a r l y , unemployment may n o t n e c e s s a r i l y be a n a t i o n a l i s s u e ; r a t h e r , i t may have become a S t a t e o r r e g i o n a l problem. There i s a l s o c u r r e n t l y a debate over t h e n a t u r e of r e c e n t job g r o w t h : h a v e most new j o b s been c r e a t e d a t t h e b o t t o m of t h e s k i l l and pay l a d d e r o r have t h e y been a t t h e h i g h e r s k i l l and pay l e v e l s ? The a n s w e r d e p e n d s on what and how o n e m e a s u r e s employment o p p o r t u n i t i e s . The 1 0 0 t h C o n g r e s s h a s begun t o d e b a t e t h e n a t u r e and c a u s e s o f c u r r e n t unemployment. The l e g i s l a t i v e p r o p o s a l s h a v e been a s d i v e r s e as t h e problems. ISSUE DEFIYITIObl The economic r e c o v e r y from t h e 1981-1982 r e c e s s i o n i s now i n t o i t s f i f t h year. The economy h a s g e n e r a t e d about 12 m i l l i o n jobs from i t s previous high before the recession. Nevertheless, t h e r e a r e n e a r l y a s many Americans w i t h o u t j o b s today a s when t h e 1981-1982 r e c e s s i o n s t a r t e d . During 1985 and 1986 unemployment was s t u c k around t h e 7% r a t e ( t h e r e h a s been a d e c l i n e below t h e 7% r a t e t h e p a s t few months); f o r e a c h of t h e l a s t 2 4 months, about 9.5 t o 8 m i l l i o n Americans have noe been a b l e t o f i n d jobs. The l a s t t i m e unemployment remained above t h e 7% l e v e l f o r any p e r i o d o f t i m e , Congress t o o k a c t i o n and passed t h e Economic S t i m u l u s A p p r o p r i a t i o n s Act (May 1977) a p p r o p r i a t i n g $20.1 b i l l i o n f o r p u b l i c s e r v i c e , pub1 i c works, and o t h e r job-generating programs. I n t h e 100th Congress, what a c t i o n , i f any, might be t a k e n t o t r y t o r e d u c e unempl oyment? BAcKGRrn rn ANALYSIS Economic R e l a t i o n s h i p s As a g e n e r a l r u l e of thumb, t h e r e a l g r o s s n a t i o n a l product (GNP) must grow by a b o u t 2.5% t o 3.0% j u s t t o m a i n t a i n a g i v e n r a t e of unemployment i n t h e f a c e of a growing l a b o r f o r c e . , I n o r d e r t o r e d u c e t h e unemploymens r a t e by one-half of a p e r c e n t a g e p o i n t , i t i s g e n e r a l l y assumed t h a t r e a l GNP w i l l need t o grow by a n a d d i t i o n a l p e r c e n t a g e p o i n t above t h e 2.5% t o 3.0% p e r c e n t range. T h i s i s because of o f f s e t t i n g f a c t o r s such a s i n c r e a s e d l a b o r p r o d u c t i v i t y , r e e n t r y of p e r s o n s i n t o t h e l a b o r market i n r e s p o n s e t o i n c r e a s i n g employment o p p o r t u n i t i e s , and l o n g e r work wee.ks. I n 1985 r e a l GNP grew by 2.7%; i n 1986 t h e growth r a t e was 2.5%; and f o r 1987 i t i s p r o j e c t e d t o be 2.5%. Thus, f o r t h e coming y e a r , l i t t l e , i f a n y , improvement i s e x p e c t e d i n t h e unemployment r a t e . Another s i g n i f i c a n t f a c t i s s h e slow r a t e sf l a b o r f o r c e growth e x p e r i e n c e d i n t h e c u r r e n t recovery. In t h e f i r s t 4 years a f t e r t h e 1973-1975 r e c e s s i o n , t h e l a b o r f o r c e grew a t an a n n u a l r a t e of 2.9%. I n t h e c u r r e n t r e c o v e r y t h e l a b o r f o r c e h a s grown by o n l y 1.9%. I f t h e l a b o r f o r c e had i n c r e a s e d a t t h e same r a t e a s i n t h e p o s t 1973-1975 r e c o v e r y , t h e l e v e l and r a t e of unemployment today would most l i k e l y be much h i g h e r . N e v e r t h e l e s s , from a n a g g r e g a t e p o i n t of view, a d d i n g an a v e r a g e of 2 m i l l i o n j o b s t o t h e economy e v e r y y e a r may n o t sound t o o bad. But t h e growth h a s n o t been even a c r o s s a l l i n d u s t r i e s ( t a b l e 1 ) . For example, o v e r t h e p a s t y e a r 3.3 m i l l i o n jobs have been added t o t h e economy (May May 19871, a l l i n t h e s e r v i c e producing s e c t o r . Of t h o s e 1986 i n d u s t r i e s i n t h e goods producing s e c t o r (mining, c o n s t r u c t i o n , and m a n u f a c t u r i n g ) , o n l y c o n s t r u c t i o n i n d u s t r y employment i n c r e a s e d . (The employment d e c l i n e i n t h e mining i n d u s t r y h a s outweighed t h e c o n s t r u c t i o n and modest manufacturing g a i n s , c a u s i n g t o t a l employment i n t h i s s e c t o r t o f a l l over t h e year.) - The Unemployed I t i s t h e workers from t h e s e d e c l i n i n g i n d u s t r i e s about whom t h e Congress, and r e c e n t l y P r e s i d e n t Reagan, have been most concerned. The chairman of t h e S e c r e t a r y of L a b o r ' s Task Force on Economic Adjustment h a s n o t e d t h a t h a l f of a l l t h e job l o s s e s i n t h e l a s t r e c e s s i o n were permanent. ( I n p a s t r e c e s s i o n s , about o n e - t h i r d of t h e job l o s s e s were permanent.) S i n c e t h e s e job l o s e r s have l i t t l e chance of r e g a i n i n g employment w i t h t h e i r p r e v i o u s employer, t h e y have come t o be c a l l e d " d i s l o c a t e d " o r " d i s p l a c e d " workers. According t o t h e Bureau of Labor S t a t i s t i c s , among t h e s e workers (workers who had been a t t h e i r j o b s f o r a t l e a s t 3 y e a r s b e f o r e t h e y became unemployed) who l o s t t h e i r j o b s between J a n u a r y 1981 and J a n u a r y 1986, t w o - t h i r d s were reemployed, about o n e - f i f t h were unemployed, and 15% had dropped o u t of t h e l a b o r f o r c e when s u r v e y e d i n J a n u a r y 1986. Of t h e 3.4 m i l l i o n reemployed w o r k e r s , many had t a k e n jobs a t lower r a t e s of pay ( 4 4 % ) . Furthermore, about 330,000 who had been working f u l l - t i m e were now working o n l y part-time. Many l a b o r market o b s e r v e r s have argued t h a t t h e l a r g e e x c e s s o f manufactured i m p o r t s o v e r e x p o r t s o v e r t h e p a s t few y e a r s h a s been t h e p r i m a r y r e a s o n f o r t h e d e c l i n e i n manufacturing employment. Between 1977 production i n t h e and 1980 i t i s e s t i m a t e d t h a t export-related m a n u f a c t u r i n g i n d u s t r y accounted f o r 80% of t h e g a i n i n m a n u f a c t u r i n g employment d u r i n g t h o s e y e a r s . S i n c e t h e n , i n p a r t b e c a u s e of t h e s t r e n g t h of t h e d o l l a r r e l a t i v e t o o t h e r c u r r e n c i e s , t h i s job g e n e r a t i n g A Department o f C o m e r c e s t u d y concluded process has reversed i t s e l f . t h a t j o b s d i r e c t l y o r i n d i r e c t l y r e l a t e d t o e x p o r t s f e l l by 1.8 m i l l i o n between 1980 and 1984 ( m o s t l y i n m a n u f a c t u r i n g ) . Another s t u d y found t h a t between 700,000 and 2.1 m i l l i o n j o b s were l o s t i n 1984 due t o ( n o n - o i l ) i m p o r t s , depending upon o n e ' s assumptions. The Commerce Department a l s o found, however, t h a t between 1980 and 1984 t h e r e were employment g a i n s f r o m t r a d e i n t h e a g r i c u l t u r a l , w h o l e s a l e and r e t a i l t r a d e , t r a n s p o r t a t i o n , comnunication, u t i l i t y , f i n a n c i a l , and s e r v i c e s s e c t o r s . Thus, w h i l e t h e t r a d e problem h a s had a n e g a t i v e impact on t h e m a n u f a c t u r i n g s e c t o r , such h a s n o t been t h e c a s e i n o t h e r s e c t o r s of t h e economy . S t r o n g i n t e r n a t i o n a l c o m p e t i t i o n i n t h e manufacturing s e c t o r h a s had a move towards e f f i c i e n c y i n t h e a n o t h e r i m p o r t a n t consequence industry. While employment i n t h e i n d u s t r y h a s n o t a c h i e v e d i t s p r e - r e c e s s i o n peak, r e a l o u t p u t s u r p a s s e d t h e p r e v i o u s l e v e l i n 1984. D u r i n g t h e r e c o v e r y from t h e 1981-1982 recession, productivity i n m a n u f a c t u r i n g h a s i n c r e a s e d a t a n annual r a t e of 4.2% a s compared t o a 0.9% r a t e f o r non-manufacturing b u s i n e s s e s . Thus, fewer workers a r e needed t o produce h i g h e r l e v e l s of o u t p u t . These improvements i n p r o d u c t i v i t y f u r t h e r r e d u c e t h e chances of d i s p l a c e d workers r e g a i n i n g t h e i r jobs. -- I n t h e c o n s i d e r a t i o n of p o l i c y a l t e r n a t i v e s t o a d d r e s s t h e d i s l o c a t e d worker problem, i t i s t h e r e f o r e important t o t a k e i n t o a c c o u n t t h e g a i n s b e i n g made i n t h e manufacturing i n d u s t r y . I f one were t o c o n c l u d e t h a t t h e d e c l i n e i n m a n u f a c t u r i n g employment h a s been due t o t a l l y t o f o r e i g n c o m p e t i t i o n , p o l i c y d e c i s i o n s based on t h i s c o n c l u s i o n may n o t be appropriate. B e c a u s e f o r e i g n c o m p e t i t i o n h a s awakened American m a n u f a c t u r e r s f o r t h e need t o modernize, r e s t r i c t i n g t r a d e may n o t l e a d t o any s i g n i f i c a n t i n c r e a s e s i n manufacturing employment. Fewer workers a r e now needed t o produce p r e v i o u s l e v e l s of o u t p u t . Policy considerations s h o u l d , t h e r e f o r e , t a k e i n t o account p r o d u c t i v i t y g a i n s and p e r h a p s f o c u s on means t o d e a l w i t h t h e t r a n s i t i o n t o a more e f f i c i e n t m a n u f a c t u r i n g industry. D i s p l a c e d workers, however, make up o n l y about 1 m i l l i o n of t h e 7.5 t o 8 m i l l i o n p e r s o n s r e p o r t e d a s unemployed each month. Who a r e t h e o t h e r 7 million? About 1.4 m i l l i o n of t h e unemployed a r e t e e n a g e r s (16 t o 19 years old). Nearly 75% of t h i s group a r e w h i t e and 25% b l a c k . Teenage unemployment h a s been i n t h e 17% t o 18% r a n g e o v e r t h e p a s t y e a r . For w h i t e t e e n s t h e r a t e h a s ranged between 15% and 16%; f o r b l a c k t e e n s between 35% and 40%. These h i g h r a t e s of t e e n a g e unemployment, however, can b e m i s l e a d i n g . The pool o f unemployed t e e n a g e r s is made up of f u l l - t i m e s t u d e n t s l i v i n g a t home; some who a r e s e e k i n g p a r t - t i m e work and o n l y a t t h e h o u r s t h a t t h e y a r e f r e e ; and o t h e r s who a r e t e s t i n g a l t e r n a t i v e jobs and who remain unemployed f o r o n l y s h o r t p e r i o d s of time. On t h e o t h e r hand, t h e pool of unemployed t e e n a g e r s does n o t i n c l u d e t h o s e who have become d i s c o u r a g e d and have g i v e n up l o o k i n g f o r work. With whom t h e n d o e s t h e problem l i e ? One group h a s been i d e n t i f i e d a s having a p e r s i s t e n t problem i n f i n d i n g work and remaining unemployed f o r l o n g m i n o r i t y high-school d r o p o u t s from l o r i n c o m e f a m i l i e s . p e r i o d s of t i m e T h i s g r o u p makes up l e s s t h a n 10% of unemployed t e e n s . - N e a r l y o n e - t h i r d of t h o s e c u r r e n t l y unemployed a r e prime a g e men T h i s i s up s i g n i f i c a n t l y from o n e - f o u r t h o f t h o s e ( a g e d 25 t o 5 4 ) . unemployed p r i o r t o t h e 1981-1982 r e c e s s i o n . A r e c e n t s t u d y h a s concluded t h a t most of t h e s e men have dependents. I t i s a l s o i m p o r t a n t t o n o t e t h a t o n l y one o u t of e v e r y f i v e men i n t h i s a g e group h a s been i d e n t i f i e d a s a d i s p l a c e d worker. Thus, a s i g n i f i c a n t p r o p o r t i o n of t o d a y ' s unemployed prime-aged men a r e n o t t h o s e whose jobs were a b o l i s h e d o r whose p l a n t s s h u t down. They a r e , however, i n c r e a s i n g l y job l o s e r s r a t h e r t h a n t h o s e who have l e f t t h e i r jobs v o l u n t a r i l y . S i n c e prime-age men tend t o be i n h i g h e r wage o c c u p a t i o n s , t h e s e workers have been found t o have l o n g e r s p e l l s o f unemployment a s t h e y s e e k o u t jobs paying comparable wages. What a l l o w s t h e s e men t o prolong t h e i r s p e l l s of unemployment? Another 25% of t h e unemployed a r e prime-age women between t h e a g e s of 25 and 54. Unlike f o r prime a g e men, however, t h i s p e r c e n t a g e i s up o n l y s l i g h t l y from 23% b e f o r e t h e 1981-1982 r e c e s s i o n s t a r t e d . On t h e o t h e r hand, t h e p r o p o r t i o n of t h i s group t h a t i s employed h a s i n c r e a s e d from 62% t o a b o u t 67% o v e r t h e same t i m e p e r i o d . I n f a c t , t h e number of prime-age women f i n d i n g employment o v e r t h e p o s t - r e c e s s i o n p e r i o d h a s been g r e a t e r t h a n t h e number of prime-age men. The number of dual-worker c o u p l e s h a s i n c r e a s e d by n e a r l y 20% s i n c e t h e end of t h e r e c e s s i o n . F a m i l i e s i n which b o t h t h e husband and w i f e work now make up 46% o f a l l c o u p l e s , up from 39% i n 1982. Thus, an unemployed worker may now be b e t t e r f i n a n c i a l l y a b l e t o e x t e n d t h e l e n g t h of h i s f h e r job s e a r c h and e x t e n d h i s / h e r p e r i o d of unemployment b e f o r e having t o a c c e p t a job t h a t pays l e s s t h a n t h e one they held previously. I n summary, t h e i n c r e a s i n g number of d u a l - e a r n e r f a m i l i e s h a s , most l i k e l y , reduced t h e f i n a n c i a l burden a s s o c i a t e d w i t h a p e r i o d of unemployment. N e v e r t h e l e s s , t h e r e a r e s t r o n g s i g n s t h a t many unemployed p e r s o n s w i l l need t o a c c e p t lower wage l e v e l s i f t h e y hope t o become reemployed. Involuntary Part-time I n 1986 a b o u t 5.5 m i l l i o n workers h e l d p a r t - t i m e jobs even though t h e y would have p r e f e r r e d t o have worked f u l l time. T h i s number was v i r t u a l l y u n c h a n g e d f r o m i t s 1985 l e v e l . While down from i t s p o s t - r e c e s s i o n peak, t h e 1986 l e v e l i s r e l a t i v e l y h i g h by h i s t o r i c a l standards. The f a c t t h a t t h i s l e v e l h a s n o t d e c l i n e d may i n d i c a t e t h a t some workers have chosen p a r t - t i m e work o v e r unemployment. To t h e e x t e n t t h a t t h i s i s t r u e , t h e unemployment r a t e i s lower t h a n i t might o t h e r w i s e be and t h e employment l e v e l h i g h e r t h a n i t might o t h e r w i s e be. Discouraged Workers I n c r e a s i n g a t t e n t i o n h a s been g i v e n t o a group of i n d i v i d u a l s who a r e n o t i n t h e l a b o r f o r c e , t h i n k t h a t t h e y want t o work, b u t do n o t l o o k f o r work b e c a u s e t h e y b e l i e v e t h a t t h e r e a r e no j o b s a v a i l a b l e f o r them. I n the fourth O f f i c i a l l y , t h i s group i s c a l l e d d i s c o u r a g e d workers. q u a r t e r of 1986, t h e r e were about 1.1 m i l l i o n p e r s o n s i n t h i s group. The s i z e o f t h e d i s c o u r a g e d worker p o p u l a t i o n changed l i t t l e o v e r t h e p a s t y e a r and i s l a r g e r t h a n t h e number of d i s c o u r a g e d workers t h a t e x i s t e d b e f o r e t h e d u a l r e c e s s i o n s of t h e 1980-1982 p e r i o d . S l u g g i s h r e a l economic growth, a slow growing l a b o r f o r c e , and t h e i n c r e a s e i n t h e number of f a m i l i e s w i t h two o r more workers have l e d t o an unemployment r a t e t h a t h a s shown l i t t l e improvement o v e r t h e p a s t s e v e r a l years. Slow economic growth i s p r o j e c t e d t o c o n t i n u e ; t h u s w e s h o u l d n o t be s u r p r i s e d t o s e e o n l y a modest improvement i n t h e unemployment r a t e over t h e next year. J o b Growth The s i g n i f i c a n c e of t h e r a p i d growth i n t h e s e r v i c e s e c t o r i n t h e A t t h e h e a r t of t h e United S t a t e s i s a m a t t e r of c o n s i d e r a b l e d e b a t e . d e b a t e i s t h e concern t h a t low wage jobs a r e i n c r e a s i n g r a p i d l y w h i l e h i g h paying j o b s a r e i n c r e a s i n g s l o w l y . Over 20% o f t h e jobs added t o t h e economy i n t h e 1982-1986 p e r i o d were i n t h e e x e c u t i v e , a d m i n i s t r a t i v e , and m a n a g e r i a l o c c u p a t i o n s ( s e e t a b l e 3 ) . F u l l - t i m e workers i n t h i s g r o u p had t h e h i g h e s t median weekly e a r n i n g s of any o c c u p a t i o n a l group i n 1986 ($511). The s a l e s o c c u p a t i o n s accounted f o r t h e n e x t h i g h e s t number of new j o b s o v e r t h i s t i m e p e r i o d ( a b o u t 20%). F u l l - t i m e workers i n t h e s e o c c u p a t i o n s e a r n e d o n l y s l i g h t l y more t h a n t w o - t h i r d s o f what m a n a g e r i a l workers made ($351). The t h i r d h i g h e s t group w i t h r e s p e c t t o j o b g a i n s were p r o f e s s i o n a l o c c u p a t i o n s ( 1 4 % ) . T h i s group had t h e second h i g h e s t l e v e l of weekly median e a r n i n g s ($500). A d m i n i s t r a t i v e s u p p o r t ( i n c l u d i n g c l e r i c a l ) workers followed c l o s e behind (12%). The median weekly e a r n i n g s f o r f u l l - t i m e workers i n t h i s group was $300 o r a b o u t 60% of t h e m a n a g e r i a l wage. Employment i n t h e s e r v i c e o c c u p a t i o n s ( e x c l u d i n g p r i v a t e household and p r o t e c t i v e s e r v i c e w o r k e r s ) grew by 11%. F u l l - t i m e median weekly e a r n i n g s of t h i s group were $209 i n 1986, t h e lowest o f a n y major o c c u p a t i o n a l group. The c o n s t r u c t i o n t r a d e o c c u p a t i o n s i n c r e a s e d by a b o u t 10% from 1982 t o 1986. Median weekly e a r n i n g s f o r t h i s group were $401. These s i x groups accounted f o r 86% of t h e 1982-1986 employment growth. P u t t i n g th.ese p i e c e s t o g e t h e r , we f i n d t h a t t h r e e of t h e s i x g r o u p s d i s c u s s e d above ( a c c o u n t i n g f o r about 43% of t h e jobs c r e a t e d d u r i n g t h e 1982-1986 p e r i o d ) p a i d above t h e median weekly e a r n i n g s of a l l f u l l - t i m e wage and s a l a r y workers ($358). Median weekly e a r n i n g s of s a l e s workers (14% of t h e p e r i o d ' s job growth) were v e r y c l o s e t o t h e e a r n i n g s f i g u r e f o r a l l workers. Only i n t h e c a s e of a d m i n i s t r a t i v e s u p p o r t ( i n c l u d i n g c l e r i c a l ) and s e r v i c e ( e x c l u d i n g p r i v a t e household and p r o t e c t i v e s e r v i c e ) workers ( a c c o u n t i n g f o r 23% of t h e 1982-1986 employment growth) were j o b s c r e a t e d below t h e median weekly e a r n i n g s f o r a l l f u l l - t i m e workers. These d a t a q u e s t i o n t h e v a l i d i t y of t h e argument t h a t most of t h e p o s t r e c e s s i o n job growth h a s been i n low paying jobs. I n t h e s e d e b a t e s o v e r job growth a v e r y i m p o r t a n t f a c t i s b e i n g t h e v a s t m a j o r i t y of jobs t h a t become a v a i l a b l e d u r i n g a overlooked y e a r a r e t h e r e s u l t of replacement r a t h e r t h a n t h e a d d i t i o n of new jobs. The l a t e s t d a t a a v a i l a b l e f o r measuring replacement needs a r e from 1983-1984. Using t h e s e p a r a t i o n r a t e s c a l c u l a t e d by t h e Bureau of Labor S t a t i s t i c s ( t h e p e r c e n t a g e of p e r s o n s whose o c c u p a t i o n t h i s y e a r i s d i f f e r e n t from t h e i r o c c u p a t i o n l a s t y e a r ) , we can e s t i m a t e t h e number of jobs t h a t became a v a i l a b l e d u r i n g t h e r e c o v e r y a s a r e s u l t of "replacement needs." ( T h i s c a l c u l a t i o n i s shown i n t a b l e 3.) The s i x o c c u p a t i o n a l g r o u p s d i s c u s s e d e a r l i e r t h a t accounted f o r 86% of t h e n z employment growth o v e r t h e 1982-1986 p e r i o d accounted f o r o n l y 50% of a l l job openings t h a t became a v a i l a b l e d u r i n g t h i s t i m e p e r i o d . -- Administrative support (including c l e r i c a l ) occupations o f f e r e d t h e g r e a t e s t number of job o p p o r t u n i t i e s o v e r t h e p o s t - r e c e s s i o n p e r i o d ( 1 4 m i l l i o n jobs a c c o u n t i n g f o r 1 7 % of a l l job o p e n i n g s ) . S e r v i c e o c c u p a t i o n s ( e x c l u d i n g p r i v a t e household and p r o t e c t i v e s e r v i c e s ) were a c l o s e second Next were s a l e s ( a b o u t 12 m i l l i o n openings o r 15% of t o t a l o p e n i n g s ) . o c c u p a t i o n s ( 1 1 m i l l i o n jobs and 14% of a l l o p e n i n g s ) ; e x e c u t i v e , a d m i n i s t r a t i v e , and managerial o c c u p a t i o n s ( 7 m i l l i o n o p e n i n g s o r 9% of t h e t o t a l 1; p r o f e s s i o n a l o c c u p a t i o n s (6.7 m i l l i o n openings o r 8% of t h e t o t a l ) ; and machine o p e r a t o r s , a s s e m b l e r s , and i n s p e c t o r s (6.2 m i l l i o n openings o r 7.6% o f t h e t o t a l ) . C o n s t r u c t i o n t r a d e o c c u p a t i o n s , which were 10% of new employment growth over t h e p o s t - r e c e s s i o n a r y p e r i o d , were l e s s t h a n 5% of t o t a l job openings o v e r t h e same p e r i o d . Thus, w h i l e new employment growth s i n c e t h e end of t h e 1981-1982 r e c e s s i o n h a s been p r i m a r i l y i n t h e high-wage o c c u p a t i o n s , t o t a l employment o p e n i n g s ( t a k i n g i n t o a c c o u n t replacement n e e d s ) h a s been i n low-wage o c c u p a t i o n s . (see chart 1.) A Y a t i o n a l Problem? I n 198% t h e a n n u a l a v e r a g e unemployment r a t e f o r t h e Nation a s a whole was 7.5%. Twenty-three S t a t e s had unemployment r a t e s e x c e e d i n g t h i s l e v e l and a c c o u n t e d f o r 57% of a l l unemployed p e r s o n s i n 1981. I n 1986 t h e n a t i o n a l unemployment r a t e averaged 6.9%. Twenty-three S t a t e s a g a i n exceeded t h i s n a t i o n a l a v e r a g e ( n o t a l l t h e same S t a t e s b u t t h e r e was CRS- 7 c o n s i d e r a b l e o v e r l a p ) , b u t i n 1986 t h e y accounted f o r o n l y 50% of a l l unemployed p e r s o n s . T h i s i n d i c a t e s t h a t when t h e 1981-1982 r e c e s s i o n began, unempLoyment was c o n c e n t r a t e d i n t h e more populous S t a t e s . More s p e c i f i c a l l y , 48% of t h e c i v i l i a n l a b o r f o r c e l i v e d i n t h e 2 3 S t a t e s t h a t had an u n e m p l o ~ e n tr a t e above t h e n a t i o n a l a v e r a g e i n 1981; i n 1986 o n l y 40% o f t h e c i v i l i a n l a b o r f o r c e l i v e d i n t h e 23 S t a t e s w i t h unemployment above t h e n a t i o n a l a v e r a g e . Thus, w h i l e an e q u a l number of S t a t e s have unemployment r a t e s above t h e n a t i o n a l a v e r a g e t o d a y a s t h e y d i d 5 y e a r s a g o , t h e y a c c o u n t f o r a s m a l l e r p r o p o r t i o n of t h e N a t i o n ' s l a b o r market. P e r h a p s t h i s phenomenon h e l p s e x p l a i n why t h e United S t a t e s h a s t o l e r a t e d a p r o l o n g e d p e r i o d of r e l a t i v e l y h i g h unemployment f o r a r e l a t i v e l y l o n g period of time. Policy Implications The above d i s c u s s i o n i l l u s t r a t e s t h a t t h e problems e x i s t i n g i n t h e U.S. l a b o r market t o d a y a r e m u l t i f a c e t e d ; t h e r e f o r e , t h e r e i s no s i n g l e s o l u t i o n . C o o r d i n a t e d f i s c a l and monetary p o l i c i e s g e a r e d toward s t r o n g e r economic growth w i l l e n a b l e us t o a b s o r b normal l a b o r f o r c e growth and t o b e g i n t o r e d u c e t h e h i s t o r i c a l l y h i g h r a t e of n a t i o n a l unemployment. disadvantaged youth i n p a r t i c u l a r w i l l r e q u i r e programs n o t Youth o n l y t o p r e p a r e them f o r t h e world of work t o d a y b u t a l s o t o e n c o u r a g e them t o remain i n school s o t h e y can e n t e r t h e l a b o r market p r e p a r e d t o d e a l w i t h t h e new t e c h n o l o g i e s t h a t a r e c o n s t a n t l y changing t h e n a t u r e o f work. -- -- The ati ion's manufacturing s e c t o r h a s shown i t s s e n s i t i v i t y t o i n t e r n a t i o n a l c o m p e t i t i o n i n t h e 1980s. While t h e i n d u s t r y i s t a k i n g p o s i t i v e s t e p s t o modernize i n o r d e r t o remain c o m p e t i t i v e , t h e r e w i l l b e i n e v i t a b l e job l o s s a s p r o d u c t i v i t y w i t h i n t h e s e c t o r c o n t i n u e s t o i n c r e a s e . What, i f a n y t h i n g , can be done f o r t h o s e d i s p l a c e d a s a r e s u l t of t h e i n c r e a s e d c o m p e t i t i o n ? Most a n a l y s t s a r e s u g g e s t i n g r e t r a i n i n g ; b u t how i s t h i s b e s t accomplished and f o r which jobs s h o u l d t h e s e workers be r e t r a i n e d ? The multiple-worker f a m i l y now a p p e a r s t o be t h e norm r a t h e r t h a n t h e e x c e p t i o n . How h a s t h i s changed t h e burden of unemployment? What d o e s i t mean i n t e r m s of programs and p o l i c i e s t o a i d t h e unemployed? These a r e i s s u e s we a r e now o n l y beginning t o i n v e s t i g a t e . And what a b o u t t h e f u t u r e n a t u r e of work? W h a t t y p e o f employment o p p o r t u n i t i e s w i l l be a v a i l a b l e f o r workers i n t h e upcoming decade? While r e c e n t new j o b growth h a s been c o n c e n t r a t e d i n h i g h e r paying s e r v i c e i n d u s t r i e s , w i l l t h i s t r e n d c o n t i n u e ? More i m p o r t a n t l y , more a t t e n t i o n w i l l need t o be g i v e n t o jobs that d e v e l o p because o f replacement needs which by f a r and away a r e t h e major s o u r c e o f employment o p p o r t u n i t i e s t h a t e x i s t a t any g i v e n time i n t h i s c o u n t r y . A s a n a l y z e d above, t h e c u r r e n t unemployment "problem" i s r e a l l y a c o m p o s i t e of many problems. For t h e most p a r t , c o n g r e s s i o n a l r e s p o n s e s t o d e a l w i t h t h e problems a r e s i m i l a r l y d i s p a r a t e . L e g i s l a t i o n h a s been i n t r o d u c e d d i r e c t e d toward d i s a d v a n t a g e d y o u t h , d i s l o c a t e d w o r k e r s , and t h e hard-core unemployed. A sampling of t h e l e g i s l a t i o n f o l l o w s : Youth H.R. 16 (Hawkins) E s t a b l i s h e s a program t o p r o v i d e p a r t - t i m e s c h o o l y e a r and f u l l - t i m e sumner employment t o unemployed, economically d i s a d v a n t a g e d y o u t h (16-19) who a r e p u r s u i n g f u r t h e r e d u c a t i o n o r t r a i n i n g l e a d i n g t o meaningful u n s u b s i d i z e d employment. I n t r o d u c e d J a n . 6 , 1987; r e f e r r e d t o C o w i t t e e on E d u c a t i o n and Labor. R e f e r r e d t o Employment O p p o r t u n i t i e s Subcommittee Feb. 23, 1987. H.R. 18 ( U d a l l ) / S. 27 (Moynihan) Es t a b 1 i s h e s t h e American C o n s e r v a t i o n Corps f o r e c o n o m i c a l l y , H.R. s o c i a l l y , p h y s i c a l l y , o r e d u c a t i o n a l l y d i s a d v a n t a g e d y o u t h (16-25). 18 i n t r o d u c e d Jan. 6 , 1987; r e f e r r e d t o Comniteees on I n t e r i o r and I n s u l a r A f f a i r s , and Education and Labor. R e f e r r e d t o Employment O p p o r t u n i t i e s Subcommittee Feb. 23, 1987. Hearings h e l d May 21, 1987. S. 27 i n t r o d u c e d Jan. 6, 1987; r e f e r r e d t o Committee on Energy and N a t u r a l Resources. R e f e r r e d t o N a t i o n a l Parks and P u b l i c Lands Subcommittee Feb. 5 , 1987. B.R. 687 (Ltoybal)! B.R. 978 (Caydos) E s t a b l i s h e s t h e C i v i l i a n C o n s e r v a t i o n Corps I1 f o r y o u t h (16-25) t o perform such p r o j e c t s on p u b l i c o r I n d i a n l a n d s o r w a t e r s a s t h e S e c r e t a r y H.R. 687 i n t r o d u c e d J a n . 21, 1987; H.R. of t h e I n t e r i o r may a u t h o r i z e . 978 on Feb. 4 , 1987. Both b i l l s r e f e r r e d t o Committee on Education and Labor. B i l l s r e f e r r e d t o Employment O p p o r t u n i t i e s Subcommittee Feb. 23, 1987. D i s l o c a t e d Workers H A . 90 (Hawkins) E s t a b l i s h e s programs of e d u c a t i o n and t r a i n i n g f o r workers who become unemployed because o f i m p o r t s and t e c h n o l o g i c a l change. I d e n t i c a l t o t h e e d u c a t i o n and t r a i n i n g component of l a s t y e a r ' s Trade and I n t e r n a t i o n a l Economic P o l i c y Reform Act which passed t h e House i n 1986. Introduced Jan. 6 , 1987; r e f e r r e d t o Committee on Education and Labor, H e a r i n g s h e l d Feb. 1 0 , 11, 19, 25 and Mar. 4, 11, 12, 1987. Ordered r e p o r t e d o u t by 1, 1987. P r o v i s i o n s of measure C o m m i t t e e w i t h amendments, Apr. i n c o r p o r a t e d i n t o 8.8. 3. 1122 (W. Ford e t a l l Implements t h e r e c o w e n d a t i o n s of t h e S e c r e t a r y of ~ a b o r ' s Economic Adjustment and Worker D i s l o c a t i o n Task Force. I n t r o d u c e d Feb. 18, 1987; r e f e r r e d t o C o r n i t t e e on Education and Labor. H e a r i n g s h e l d by Labor-Management R e l a t i o n s and Employment O p p o r t u n i t i e s Subcommittees Mar. 1 7 , 1987. Ordered r e p o r t e d , amended, June 9. Reported, amended, Aug. 7 , 1987 (H.Rept. 100-285). 8.8. H.R. 1155 ( n i c h e 1 e t a l . ) / S. 539 (Dole e t al.) ~ d m i n i s t r a t i o n ' s " c o m p e t i t i v e n e s s " package. Among o t h e r t h i n g s , e s t a b l i s h e s a new worker r e a d j u s t m e n t program f o r d i s l o c a t e d w o r k e r s , a n expanded summer program under t h e J o b T r a i n i n g and P a r t n e r s h i p Act f o r AFDC y o u t h , a n d d e c e n t r a l i z a t i o n o f t h e Employment S e r v i c e and Unemployment I n s u r a n c e System. Both b i l l s i n t r o d u c e d Feb. 19, 1987; H.R. 1155 r e f e r r e d t o more t h a n one committee. P r o v i s i o n of measure incorporated i n t o H.R. 3 Mar. 18, 1987. S. 539 r e a d t w i c e and put on S e n a t e L e g i s l a t i v e C a l e n d a r under General Orders ( C a l e n d a r No. 1 8 ) . S. 538 (kletzenbaum e t a l . ) Implements che recomnendations of t h e S e c r e t a r y of L a b o r ' s Task Force on Economic Adjustment and Worker D i s l o c a t i o n . S i m i l a r but n o t i d e n t i c a l 1122. I n t r o d u c e d Feb. 19, 1987; r e f e r r e d t o Committee on Labor t o H.R. and Human Resources. Hearings h e l d by S u b c o r n i t t e e on Employment and Committee P r o d u c t i v i t y and S u b c o w i t t e e on Labor Mar. 10 and 26, 1987. markup h e l d May 8 , 1987; r e p o r t e d o u t May 19, 1987 w i t h amendments; p l a c e d on S e n a t e L e g i s l a t i v e Calendar under General O r d e r s (Calendar No. 129). W r i t t e n r e p o r t f i l e d by S e n a t o r Kennedy June 2 , 1987 (S.Rept. 100-62). Measure i n c o r p o r a t e d i n t o S. 1420 J u l y 22, 1987. A g r i c u l t u r a l Workers H.R. 1202 ( B e r e u t e r e t al.) E s t a b l i s h e s under t h e J o b T r a i n i n g and P a r t n e r s h i p Act a program t o p r e p a r e f a r m e r s , r a n c h e r s , and workers i n a g r i c u l t u r e - r e l a t e d b u s i n e s s and i n d u s t r y f o r t r a n s i t i o n t o o t h e r economic o p p o r t u n i t i e s . I n t r o d u c e d Feb. 24, 1987; r e f e r r e d t o C o r n i t t e e on Education and Labor. Referred t o Employment O p p o r t u n i t i e s S u b c o r n i t t e e Mar. 16, 1987. Disadvantaged Workers E.R. 30 (Hawkins) E s t a b l i s h e s comprehensive programs o f e d u c a t i o n , t r a i n i n g , and employment a s s i s t a n c e i n t h e S t a t e s t o e n a b l e f a m i l i e s r e c e i v i n g p u b l i c a s s i s t a n c e b e n e f i t s t o a c h i e v e long-term s e l f - s u f f i c i e n c y . Introduced J a n . 6 , 1987; r e f e r r e d t o Committee on Education and Labor. Committee h e a r i n g s h e l d Apr. 29, 30, May 5. H.R. 40 (Eavlrins) P r o v i d e s employment o p p o r t u n i t i e s t o long-term unemployed i n d i v i d u a l s i n h i g h unemployment a r e a s i n p r o j e c t s t o r e p a i r and r e n o v a t e v i t a l l y needed community f a c i l i t i e s . I n t r o d u c e d J a n . 6 , 1987; r e f e r r e d t o Comnittee on Education and Labor. R e f e r r e d t o Employment O p p o r t u n i t i e s S u b c o m i c t e e Feb. 23, 1987. H.R. 198 ( O b e r s t a r ) P r o v i d e s an emergency p u b l i c works jobs program by a u t h o r i z i n g t h e c o n s t r u c t i o n of s h o r t - t e r m i n f r a s t r u c t u r e r e p a i r p r o j e c t s . Introduced J a n . 7, 1987; r e f e r r e d t o Conmittee on P u b l i c Works. R e f e r r e d t o Economic Development Subcommittee Feb. 5, 1987. H.R. 1155 ( M i c h e l ) / S. 539 (Dole) See d e s c r i p t i o n under d i s l o c a t e d workers, H.R. 1720 (8. F o r d ) R e p l a c e s t h e e x i s t i n g AFDC program w i t h a new Family S u p p o r t Program which e m p h a s i z e s work, c h i I d s u p p o r t , and need-based f m i l y s u p p o r t s u p p l e m e n t s and amends t i t l e I V o f t h e S o c i a l S e c u r i t y Act t o e n c o u r a g e and a s s i s t needy c h i l d r e n and p a r e n t s u n d e r t h e new program t o o b t a i n t h e e d u c a t i o n , t r a i n i n g , and employment needed t o a v o i d long-term w e l f a r e dependence. I n t r o d u c e d Mar. 1 9 , 1987; r e f e r r e d t o more t h a n o n e comnittee. House E d u c a t i o n and Labor C o m i t t e e h e a r i n g s h e l d Apr. 29, 30 and May 5, 1987. H e a l t h and t h e Environment S u b c o m n i t t e e of House Energy and C o m e r c e Committee h e l d h e a r i n g s Apr. 24, 1987. P u b l i c A s s i s t a n c e and Unemployment Compensation Subcommittee of House Ways and Means Committee h e l d h e a r i n g s Mar. 30 and Apr. 1, 1987; markup h e l d Apr. 2, 6, 7, 8 , 9, 1987; f o r w a r d e d t o f u l l c o m n i t t e e Apr. 9 , 1987. Committee markup h e l d May 1 9 , 1987. R e p o r t e d , amended, by Committee on E d u c a t i o n and Labor (H.Rept. 100-159, P a r t 1 ) Aug. 7, 1987. R e p o r t e d , amended, by C o w i t t e e on Energy and Comnesee S e p t . 1 5 , 1987 (H.Repe. 100-159, P a r t 3 ) . R e p o r t e d , amended, by Committee o n Ways and Means J u n e 1 7 , I987 (H.Rept. 100-159, P a r t 2 ) . S. 514 (Kennedy e t a l e ) E s t a b l i s h e s u n d e r t h e J o b T r a i n i n g P a r t n e r s h i p Act a n i n c e n t i v e bonus f o r t h e s u c c e s s f u l placement o f c e r t a i n employable d e p e n d e n t i n d i v i d u a l s . I n t r o d u c e d Feb. 5 , 1987; r e f e r r e d t o Committee on Labor and Human R e s o u r c e s . H e a r i n g s h e l d by Employment and P r o d u c t i v i t y S u b c o n m i t t e e Mar. 6 , 1987. R e p o r t e d w i t h an amendment i n t h e n a t u r e o f a s u b s t i t u t e t o f u l l c o m n i t t e e Mar. 1 8 , 1987. R e p o r t e d t o S e n a t e by f u l l committee Mar. 20, 1987 w i t h a n amendment i n t h e n a t u r e of a s u b s t i t u t e and an amendment t o t h e t i t l e (S.Rept. 100-20). P l a c e d on S e n a t e L e g i s l a t i v e C a l e n d a r Mar. 20, 1987, under General Orders. P a s s e d S e n a t e w i t h a n amendment and R e f e r r e d t o House C o m n i t t e e on amendment t o t h e t i t l e Apr. 2 , 1987. E d u c a t i o n and Labor Apr. 7 , 1987; h e a r i n g s h e l d Apr. 29, 30, and Hay 5 , 1987. S. 777 ( ~ i m o n ) / H . ~ . 2197 (Hawkins) E s t a b l i s h e s p u b l i c s e r v i c e j o b s t o g u a r a n t e e employment o p p o r t u n i t i e s t o j o b l e s s p e r s o n s who c a n n o t f i n d work i n t h e p r i v a t e s e c t o r . S. 777 i n t r o d u c e d Mar. 1 8 , 1987; r e f e r r e d t o C o m n i t t e e on Labor and Human Resources. H e a r i n g s h e l d by Employment and P r o d u c t i v i t y S u b c o m i t t e e Mar. 2 3 , 1987. J o i n t h e a r i n g w i t h Subcommittee on t h e Handicapped h e l d Apr. H.R. 2197 i n t r o d u c e d Apr. 29, 1987; r e f e r r e d t o C o m n i t t e e on 2 8 , 1987. E d u c a t i o n and Labor. R e f e r r e d t o Employment O p p o r t u n i t i e s S u b c o m i t t e e May 8, 1987. H e a r i n g h e l d S e p t . 30, 1987. FOR ADD1 TIOUAL READ1NG Shank, Susan E. and S t e v e n E. Haugen. The employment s i t u a t i o n d u r i n g 1986: j o b g a i n s c o n t i n u e , unemployment d i p s . Monthly l a b o r r e v i e w , F e b r u a r y 1987: 3-10. U.S. Library of Congress. Congressional Research S e r v i c e . Employing [Washington] youth: dimensions o f t h e problem, by Dennis M. Roth. Apr. 24, 1984. 39 p. CRS Report 84-72 E ----- Employment s t a t u s of the LeGrande. [Washington] 1982. CRS I s s u e Brief 82098 s t a t e s : data and trends (Updated r e g u l a r l y ) . [by] Linda Ow- * * . =8* roo Crc h U 2 8: a m C 4 0 W m c r 2 2 Y s U Y s U Q W b c u u mrl s o c c c 0- 0 O I O I U 0n m o o O I O 2; dg; C - I - I ==-----wN 0 I I I I ...- - . . . - a w n - = * o m N m0 4 TABLE 4. Labor Force S t a t i s t i c s , 1947-1987 ( p e r s o n s 1 6 y e a r s of age and o v e r , i n thousands) * 4JC . Year - Non-Inst Population 1947 1948 1949 1950 1951 1952 1953* 1954 1955 1956 1957 1958 1959 1960* 1961 1962* 1963 1964 1965 1966 1967 1968 1969 1970 1971 19729 19734 1974 1975 1976 1977 1978" 1979 1980 1981 1982 1983 1984 1985 1986* 101,827 103,068 103,994 104,995 104,621 105,231 107,056 108,321 109,683 110.954 112,265 113,227 115,329 117,245 118,771 120,153 122,416 124,485 126,513 128,058 129,874 132,028 134,335 137,085 140,216 144,126 147,096 150,120 153,153 156,150 159,033 161,910 164,863 167,745 170,130 172,271 174,215 176,383 178,206 180,587 Civ. Labor Force(CLF1 Total Employed Total Uneur ployed Unemployment Rate ( X of CLF) 2,311 2,276 3,637 3,288 2,055 1,883 1,834 3,532 2,852 2,750 2,859 4,602 3,740 3,852 4,714 3,911 4,070 3,786 3,366 2,875 2,975 2,817 2,832 4,093 5,016 4,882 4,365 5,156 7,929 7,406 6,991 6,202 6,137 7,637 8,273 10,678 10,717 8,539 8,312 8,237 7,948 3.9 3.8 5.9 5.3 3.3 3 .O 2.9 5.5 4.4 4.1 4.3 6.8 5.5 5.5 6.7 5.5 5.7 5.2 4.5 3.8 3.8 3.6 3.5 4.9 5.9 5.6 4.9 5 .'6 8.5 7.7 7.1 6.1 5.8 7.1 7.6 9.7 9.6 7.5 7.2 7 .O 6.7 Not s t r i c t l y comparable w i t h p r i o r y e a r s due t o t h e i n t r o d u c t i o n of population adjustments i n these years. Data f o r 1987 a r e by q u a r t e r s . Source: Bureau of Labor S t a t i s t i c s , U.S. Department of Labor Note: Data a r e f o r n o n a g r i c u l t u r a l wage and s a l a r y workers only.