Chapter 6

Opportunities to Prosper

Experience shows that America’s economy likely will continue to face challenges arising from technological innovation, globalization, demographic trends, natural disasters, and political events.  However, the flexible and dynamic nature of our labor market enables America’s workers to grasp the opportunities presented by these changes. 

In recognizing opportunities to succeed in the workforce, America’s workers strengthen our economy at the same time.  This chapter examines opportunity in the American labor market from three perspectives:  the effects of an aging population, the expanding role of women, and the experience of racial and ethnic minorities.

• The proportion of the population ages 65 and older is projected to grow from about 12.4 percent of the total population in 2000 to about 20.7 percent in 2050.  The Baby Boom generation is now just beginning to turn 60 years of age, but over the next several years, all 78.2 million of them will pass that milestone, moving into the traditional age of retirement.  The population next in line is today’s 20 to 39 year olds, and there are about half a million fewer of them, according to 2005 Census estimates.
• The growing size of the aging population relative to the younger population may contribute to better job market conditions for younger workers in terms of lower unemployment rates and more job openings.

• In the last several years, workers age 55 and older have represented a growing share of the labor force, growing from 11.6 percent in 1993 to 16.2 percent in 2005.  Over the same time, the labor force participation of workers age 55 and older has increased from 29.4 percent to 37.2 percent.
• In the future, America’s older workers – who will be more educated than previous generations of older workers – may remain in the labor force longer, thereby increasing the typical age of retirement.  Still, as older workers maintain their attachment to the labor force, they may desire more flexibility and more non-traditional work relationships.  As much as any other group of workers, older workers may benefit from the opportunities afforded by alternative work arrangements, such as part-time schedules and temporary and contract work.  Therefore, these arrangements may become even more important as employers provide the flexibility to retain productive older workers. 

• Over the last several decades, women have taken advantage of the opportunities presented by America’s dynamic labor market.
• Women’s labor force participation rate was 32.7 percent in 1948.  Over the years it increased steadily, from 46.3 percent in 1975 to a peak of about 60 percent in 2000.  At 59.3 percent in 2005, the labor force participation rate of women has plateaued since 2000. 

• More women than ever are in higher-paying occupations.  Women’s share of employment in professional and related occupations and in management, business and financial operations occupations has steadily risen over time.[18]
• Women represented 50.7 percent of all professional and related occupations in 1983 but represented 56.3 percent in 2005.  Women have also made progress in management occupations.  In 1983, women comprised 31.2 percent of workers in management, business and financial operations occupations.  By 2005, the proportion of women in such occupations had grown to 42.5 percent.  

• The progress of women in the U.S. labor market highlights the vital role of education and the opportunities available to those who pursue it.  Overall, real (inflation-adjusted) earnings of women 25 years and over increased by over one-fourth from 1979 to 2005, while real earnings of men changed very little. 
• At all levels of education, changes in real earnings since 1979 have been more favorable for women than for men.  Women’s gains in earnings varied significantly by educational attainment, and women with more education experienced larger gains in real earnings.  Indeed, women without a high school education experienced lower earnings after adjusting for inflation, while those with higher levels of education experienced higher earnings over time even after adjusting for inflation. 

• The increasing racial and ethnic diversity of the U.S. population also will create new opportunities as well as challenges for the U.S. labor market, and education will play a vital role.  As shown in Figure 6-6, the proportion of the population (all ages) whose race is classified as “white” has decreased from almost 9 in 10 in 1960 to about 3 in 4 in 2000.
• When Hispanic ethnicity is considered in addition to race, the U.S. population’s diversity is further underscored:  In 2005, about one-third of the country’s population belonged to either a racial or ethnic minority group.

• Greater population diversity naturally results in greater diversity among U.S. workers.  Immigration is a factor in the growing role of racial and ethnic minorities, but natural increase – native-born Americans – is also an important source for growth of the minority population.  The 2.9 million estimated increase in total population (all ages) between 2004 and 2005 included 1.1 million immigrants and 1.7 million native births.  Of these, 1.4 million of the native births were of minority race or ethnicity. 
• From 2004 to 2005, the Hispanic population grew by over 1.3 million, with about 39.5 percent of that growth due to immigration.  The black population increased by almost half a million over the year, with 18.0 percent of the growth due to immigration.  The Asian population increased by 421,000 over the year, with 56.7 percent of the increase due to immigration.  By comparison, the non-Hispanic white population increased by half a million, with 39.0 percent of the increase due to immigration.

• Regardless of race or Hispanic ethnicity, college graduates earn substantially more than do high school graduates and more than twice as much as high school dropouts.
• Comparing 2005 median weekly earnings of those who usually work full time (age 25 and over), the earnings premium for a bachelor’s degree or higher versus less than a high school diploma was

o       151.0 percent ($625 per week) for Whites,
o       122.6 percent ($456 per week) for Blacks or African Americans,
o       160.4 percent ($635 per week) for Asians; and
o       123.2 percent ($478 per week) for Hispanics or Latinos.