October 1999, Vol. 122, No. 10
Research summaries:
The 1999 Report of the American Workforce
The Bureau of Labor Statistics 1999 Report on the American Workforce examines three major themes: "Just-in-time" responses to a competitive economic environment, the central role of improved skills for all workers, and the heightened pressure on the balance between work and family. Following is a summary of highlights of the report.
Just-in-time strategies
Greater skills; higher wages
Time at work
The automobile industry. Both the automobile industry and the help supply industry have each, in their own way, adopted "just-in-time" strategies in an increasingly competitive economy. The motor vehicles and equipment industry throttled down labor costs during the current economic expansion. In three major segments of the industry—motor vehicle assembly, parts manufacturing, and automotive stampings—unit labor costs were lower in 1998 than in 1991. From 1991 to 1998, unit labor costs of motor vehicle assemblers declined 0.9 percent per year. During the same period, parts manufacturers cut unit labor costs by 2.0 percent annually, on average. The automotive stampings industry had even greater success in cost-cutting, reducing unit labor costs by 4.4 percent per year.
The auto industry has leveraged the impact of these changes with strategies of lean manufacturing and just-in-time production throughout the supply chain. As a result, there has been a change in the structure of the industry: The number of people working up-stream in the automotive parts industry first surpassed the number in final assembly in 1981. Their lead has widened since 1987, as the industry shifted many design, development, and supply management functions to suppliers.
The help supply industry. This industry has facilitated flexible production strategies by providing a source of "just-in-time" labor. This has been important to employers in times of volatile economic demand. Despite its relatively small size, the help supply industry accounts for a large part of employment change, particularly in the years just after economic recessions. The volatility of the industry’s employment is due in part to its role as a buffer that employers may use when they are not certain that recovery is reliably underway.
It is noteworthy that in recent years some characteristics of employment in the temporary help industry have converged with those of other parts of the economy, For example, temporary help supply workers averaged about the same weekly hours as all other workers in the services industry in 1998. In contrast, in the early 1980s, temps worked about five-and-a-half fewer hours per week than the average services worker. However, the duration of temporary workers’ assignments is very short, compared with traditional employment. A 1995 survey showed that 42 percent of temps had been at their current assignment less than 3 months, 72 percent less than 9 months, and only 16 percent had spent more than a year in their current assignment. Differences such as these are especially important because the demographic mix of temporary help is somewhat different than that of the overall workforce.
In 1998, 53 percent of temporary help supply workers were women. In the entire nonfarm economy, female workers accounted for just 48 percent of all employees. Another demographic characteristic of interest regarding temporary workers is age. At least half of these workers are under age 35, with only a small percentage older than 45. And while the majority of temporary help workers are white, the proportion is smaller than among workers in traditional employment arrangements.
The report’s researchers find that skills are rewarded: Greater schooling and training lead to higher wage rates. In fact, of all the factors studied, the wage premium for knowledge is highest. On average, wages go up about 10 percent to 15 percent as knowledge requirements go up one level and all other factors of the job are fixed. The premiums for working more independently (less supervision and less reliance on detailed guidance) are on the order of 7 percent to 10 percent per level. There are less substantial premiums for the factors of complexity, scope, and effect of the work and for supervisory duties. There are only negligible premiums for measures of personal interaction on the job and for the physical aspects of the job.
Looked at from a productivity measurement view, more than one-fourth of the growth in labor productivity in the 1990s has been due to rises in the skill levels of workers. This represents a dramatic change from the 1970s, when skill change contributed almost nothing to labor productivity growth. Labor productivity in the private business sector grew by 1.30 percent per year on average between 1990 and 1997, and increasing skill levels accounted for 0.41 percentage point of the growth. Between 1973 and 1979, the growth rate of labor productivity was about the same as in the 1990s—1.27 percent per year—but increases in skills only explained 0.03 percentage point of this growth.
For this analysis, skills were measured by the education and work experience of individuals. Over the long term, there has been a significant increase in the proportion of work hours supplied by persons with more than a high school diploma. In 1948, most hours worked in the private sector were supplied by individuals without a high school diploma. Educational attainment has increased so much that in 1997, most hours worked are now supplied by people with more than 12 years of education. The share of hours worked by men with 13 or more years of education was 15 percent in 1948; for women, the corresponding share was 11 percent. As of 1997, the share for men with post-high-school education was 53 percent; while for women, it was 55 percent.
More recently, there also has been a significant increase in the experience level of the workforce. Mean years of work experience for women in the private-sector workforce rose from 11.7 in 1985 to 12.5 in 1997—a rise of 0.8 year. For men, the increase was nearly twice as large. The average level of job experience of men at work in the private sector rose from 17.4 years in 1985 to 18.8 years in 1997, a gain of 1.4 years.
How much time do Americans spend at work? The average worker’s weekly hours have been fairly stable since 1960, according to data from the Current Population Survey. However, this aggregate stability conceals some interesting changes. First, it is clear that women are working for pay more now than they did 30 years age. Women’s participation rates are up, and there has been a small upward trend in the number of hours an employed woman works. In 1969, a total of 27.5 percent of women age 25 to 54 worked full-time year round; by 1997, that percentage increased to 50.2 percent. By educational attainment, all groups of women experienced a rise in the percent working full-time year round. However, those women with a college degree or higher reported the smallest increase, 18.9 percentage points.
Second, although the number of hours worked in a week by the average employed man has not changed, there has been an increase in the proportion of men working extended weeks (more than 40 hours). The proportion of employed men who reported working more than 40 hours per week rose from 35.1 percent in 1979 to 39.0 percent in 1989, then to 40.2 percent in 1998. The proportion that were at work more than 60 hours increased from 9.4 percent to 11.4 percent to 11.9 percent in those same years.
Third, married-couple families, especially those with children, have reported a marked increase over the past three decades in the share among them in which both husband and wife work 35 or more hours a week. In 1969, both spouses worked full-time in about 24 percent of married couples in which both spouses were age 25 to 54 years. By 1998, this figure had risen to 43 percent. The increase was more dramatic among couples with children under age 6. In 1998, fully 31 percent of such couples had both spouses at work full-time, up from 13 percent in 1969. One result of this increase has been an extension in the total time spent at work by the average married couple. In 1998, married couples spent, on average, 14 more hours working per week than they did in 1969. Once again, married couples with children under age 6 experienced the largest increase. Their combined hours rose from 52.3 per week in 1969 to 68.3 in 1998.
Such families, however, were more likely to have some flexibility in scheduling their hours at work. From 1991 to 1997, the percent of full-time wage and salary workers with flexible work schedules on their principal job increased from 15.1 percent to 27.6 percent. Workers who were married with a spouse present were slightly more likely to have flexible work schedules in 1997. Nearly 29 percent of such workers had flexible schedules and about 31 percent of married workers with a spouse present and children under six had flexible schedules.
The Report on the American Workforce was written by three teams of researchers, each drawn from across a number of BLS statistical programs: Kent Kunze, Kenneth Lavish, Lois Plunkert, Cynthia Engle, Paul Kern, Virginia Klarquist, Shannon Martin, Francisco Moris, and Thomas Wedemire wrote the first chapter; Harriet Weinstein, Larry Rosenblum, Pamela Frugoli, Linda Moeller, Jane Osburn, Brooks Pierce, Carolyn Veneri, and Pat Wash were authors of chapter 2; and Anthony Barkume, Howard Hayghe, Mary Joyce, Larry Rosenblum, William Wiatrowski, Thomas Beers, Sasha Eidelman, Randy Ilg, Curtis Polen, Hector Rodriguez, Jay Stewart, Linda Stinson, and Stella Cromartie prepared chapter 3.
Deborah P. Klein, Associate Commissioner for Publications and Special Studies, and Richard M. Devens, Jr., chief of the BLS Publishing Division, provided overall direction for the 1999 Report on the American Workforce, and prepared this summary.
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