Forces Shaping the Future Workforce and Workplace in the United States

306 Pages·2004·0.75 MB·English

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The 21st
Century at Work
Forces Shaping the Future Workforce
and Workplace in the United States
LYNN A. KAROLY, CONSTANTIJN W. A. PANIS
Prepared for the U.S. Department of Labor
The research described in this report was conducted by RAND Labor
and Population. The views expressed herein are those of the authors and
do not necessarily reflect the official position of the U.S. Department of
Labor.
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PREFACE
In labor as in other policy domains, government action plays out in a
context of powerful trends, some strongly affected by other govern-
ment activities and some not. Understanding this context is a pre-
requisite to sound policy formation. To aid understanding of the
forces impinging on the workforce and workplace of the twenty-first
century, the U.S. Department of Labor (DOL) asked RAND to con-
duct a study of the future of work. Specifically, we seek to answer two
sets of questions about work in the twenty-first century:
• What are the major factors that will shape the future of work in
the current century and how are those factors likely to evolve
over the next 10 to 15 years?
• What are the implications of these future trends for key aspects
of the future workforce and workplace, including the size, com-
position, and skills of the workforce; the nature of work and
workplace arrangements; and worker compensation?
To address these questions, we take a closer look at three major fac-
tors that are expected to shape the world of work in the coming
decades: shifting demographic patterns, the pace of technological
change, and the path of economic globalization. In doing so, our
objective is not so much to predict the future but rather to under-
stand key structural forces under way in the economy today, the fac-
tors associated with those trends, and whether we can expect such
trends to continue or to deviate from their present course. We also
aim to identify the implications of those trends and the challenges
they pose for decisionmakers in the public and private sectors.
iii
CONTENTS
Preface ......................................... iii
Figures ......................................... vii
Tables .......................................... ix
Boxes .......................................... xi
Summary ....................................... xiii
Acknowledgments ................................. xli
Abbreviations .................................... xliii
Chapter One
INTRODUCTION .............................. 1
The Challenges of Looking to the Future ............. 3
A Guiding Framework ........................... 6
Chapter Two
SHIFTING DEMOGRAPHIC PARAMETERS SHAPING THE
FUTURE WORKFORCE .......................... 15
Slower Workforce Growth Ahead ................... 17
The Workforce Is Becoming Ever More Diverse ........ 30
The Key Characteristic of the Future Workforce Is Skill ... 44
Addressing the Slowdown in Labor Force Growth ....... 52
Changing Demographics Also Shift Demand for Goods
and Services ............................... 72
Demographics and the Future of Work .............. 75
v
vi The 21st Century at Work
Chapter Three
THE INFORMATION AGE AND BEYOND: THE REACH OF
TECHNOLOGY ................................ 79
The Advent of the Information Age ................. 81
Applications of the “New Biology” .................. 92
Nanotechnology: Revolutionary Technology on
the Horizon ............................... 96
How Technology Is Affecting the Workforce
and Workplace ............................ 99
Technology and the Future of Work ................. 124
Chapter Four
A NEW ERA OF GLOBAL INTEGRATION ............. 127
The Phenomenon of Economic Global Integration ...... 130
Forces Behind Global Economic Integration .......... 151
How Economic Globalization Is Affecting the U.S.
Economy, the Workforce, and the Workplace ...... 159
Economic Globalization and the Future of Work ....... 179
Chapter Five
IMPLICATIONS FOR WORK IN THE TWENTY-FIRST
CENTURY .................................... 183
New Paradigms for the Organization of Production ..... 186
Shifts in Employment Relationships and Where Work Is
Performed ................................ 191
Other Workplace Dimensions: Safety, Security, and
Privacy .................................. 198
The Changing Nature of Work and the Skill Requirements
of Jobs ................................... 200
Supplying the Workforce Needs of the Future ......... 209
Changing the Rewards to Work .................... 217
Conclusions .................................. 221
Bibliography ..................................... 223
FIGURES
S.1. Labor Force Participation Rate, by Sex, 1950–2002 ... xvi
S.2. Real Private Fixed Investment in Information
Technology, 1987–2001 ....................... xxi
S.3. Real Median Hourly Wage by Education Level,
1973–2001 ................................. xxiv
S.4. U.S. Exports and Imports as a Share of GDP,
1960–2002 ................................. xxvii
1.1. Conceptual Framework ....................... 7
1.2. Female Labor Force Participation Rate, 1900–2002 ... 11
1.3. Patents Granted, 1900–2001 ................... 12
1.4. Exports and Imports as a Share of GDP, 1929–2002 ... 13
2.1. Annual Growth Rates of the Labor Force, 1950–2000,
and Projected, 2000–2030 ..................... 18
2.2. Determinants of the Size of the Workforce ......... 20
2.3. Fertility Rate, 1920–2001 ...................... 21
2.4. Labor Force Participation Rate, by Sex, 1950–2002 ... 23
2.5. Labor Force Participation Rate by Sex and Age,
1980–2010 ................................. 25
2.6. Immigration to the United States, 1950–2001 ....... 28
2.7. Age Structure of the Population in 1960, 1980, 2000,
and 2020 .................................. 32
2.8. Racial and Ethnic Composition of the Population,
1980–2020 ................................. 39
2.9. Ethnicity and Race Questions on the 2000 Census ... 40
2.10. Fertility Rate by Race, 1981–2001 ................ 41
2.11. Fertility Rate by Hispanic Ethnicity, 1989–2001 ..... 42
2.12. Immigrants by Origin, 1991–2001 ............... 42
2.13. Labor Utilization in Selected Countries, 1998 ....... 53
vii
viii The 21st Century at Work
2.14. Labor Force Participation Among Men Age 55-Plus
and at Selected Single Years of Age, 1950–2002 ...... 55
2.15. Labor Force Participation Rate by Sex and Marital
Status, 1970–2001 ........................... 60
2.16. Labor Force Participation Rate of Women with
Children by Marital Status and Age of Youngest
Child, 1970–2001 ............................ 61
2.17. Labor Force Participation Among the Disabled,
by Sex, 1983–2002 ........................... 68
2.18. Basis for Obtaining Immigrant Visas, 1994–2001 ..... 70
2.19. Composition of Expenditures, by Age Group ....... 73
3.1. Moore’s Law, Predicted and Actual, 1971–2005 ...... 82
3.2. Quality-Adjusted Price Indices for Information
Technology, 1970–2001 ....................... 83
3.3. Real Private Fixed Investment in Information
Technology, 1987–2001 ....................... 86
3.4. Real Investment in Information Technology by
Industry, 1970–2001 ......................... 87
3.5. Information Technology Patents as a Share of All
Patents, 1980–2001 .......................... 101
3.6. Labor Productivity, 1970–2002 .................. 104
3.7. Economywide Measures of Occupational Task Input,
1959–1998 ................................. 110
3.8. Real Median Hourly Wage by Education Level,
1973–2001 ................................. 113
4.1. Volume of World Merchandise Exports, 1950–2001 ... 132
4.2. Value of World Merchandise and Services Exports,
1950–2002 ................................. 133
4.3. U.S. Exports and Imports as a Share of GDP,
1960–2002 ................................. 134
4.4. Distribution of U.S. Exports and Imports by Sector,
1980 and 2002 .............................. 135
4.5. Distribution of U.S. Goods Exports and Imports by
Region, 1980 and 2002 ........................ 138
4.6. U.S. Capital Flows as a Share of GDP, 1960–2002 .... 144
4.7. Transportation and Telecommunications Costs,
1950–1990 ................................. 152
4.8. U.S. Trade and GDP Per Capita, 1960–2002 ........ 163
4.9. U.S. Trade and Employment-to-Population Ratio,
1960–2002 ................................. 171