Economic and Labor Market Trends

Abstract

SUMMARY A number of economic and labor market trends in the United States over the past 30 years affect the well-being of workers and their families. This article describes key changes taking place and the implications for social and economic policies designed to help low-income working families and their children, particularly those families that include immigrants. Important conclusions that emerge include the following: * Diversity. The workforce, like the population, is more diverse than in past decades, as more workers and their families are of mixed ethnicities and more workers have families that include both immigrant and non-immigrant members. * Demand for Low-Skilled Labor. Although demand for high-skilled workers continues to increase, two-thirds of all jobs in the U.S. labor market do not require high skills or education, and the demand for low-skilled workers also is expected to continue over the next decade. * Skills Gap. Those with strong technical skills and college educations receive higher wages; and those with fewer skills and education are relegated to the secondary labor market where wages and job security are low and few employee benefits are offered. * Working Poor. Over 2 million persons are in poverty even though at least one person in their family works full time, year round. The authors conclude that policies to help low-wage workers with families need to focus on more work supplementation strategies, improved access to supports, more targeted education and training services, and proposals extending some form of legal status to undocumented workers. Without a commitment to such policies, working poverty is likely to continue, and children in immigrant families, in particular, are likely to stay poor, even with working parents. ********** A number of economic and labor market trends in the United States over the past 30 years have altered the characteristics of the workforce and have had an impact on the well-being of workers and their families. Low-income workers in particular have been affected by some of the macro-economic trends, such as the shift in the industrial base of the nation from one centered on manufacturing to one focused more on services and, especially since the 1990s, to one defined by technology and communication. Because of economic restructuring, the gap between wages paid to those with high levels of education and skills and those with low levels of education and skills has widened. Meanwhile, the United States has experienced a shift in the ethnicity and national origins of its population, and therefore its workforce, as well as a continuing shift in family structure. The past two decades have seen a high and sustained inflow of immigrants and an increase in the proportion of the population with limited English proficiency. A significant share of the immigrant population possesses educational deficiencies and limited work skills, which means they generally enter the low-wage segment of the labor market. At the same time, the trend toward more single-parent households, at least in the non-immigrant population, continues to redefine family issues for low-wage workers, their employers, and public policy. This article describes key changes taking place in the economy and in the workforce that affect low-income families. (1) The implications of these broad and intermingled trends are discussed, along with social and economic policies designed to help low-income working families, particularly those that include immigrants. Trends in the Economy and Employment Despite the slow-down and recession in 2001 and 2002, the U.S. economy is extremely strong. The long period of economic growth in the 1990s--with strong job growth, high productivity, and low inflation--brought unemployment to historically low levels. More people, even those with relatively limited labor market experience, worked in the 1990s, and poverty rates showed a slight decline even for single mothers and their children. …