The 1999 Report on the American Workforce

By Klein, Deborah P.; Devens, Richard M., Jr. | Monthly Labor Review, October 1999 | Go to article overview

The 1999 Report on the American Workforce

Klein, Deborah P., Devens, Richard M., Jr., Monthly Labor Review

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

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 work force.

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.

Greater skills; higher wages

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. …

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