U.S. Labor Force Trends

By Lee, Marlene A.; Mather, Mark | Population Bulletin, June 2008 | Go to article overview

U.S. Labor Force Trends


Lee, Marlene A., Mather, Mark, Population Bulletin


In the last 40 years, changing labor markets, globalization, and industrial restructuring have greatly influenced the size and composition of the U.S. labor force. The increasing mobility of labor, goods, and capital associated with globalization also potentially affects wages. Industrial restructuring, which has been characterized by a decline in manufacturing and growth in the service sector, affects the distribution of workers across industries, occupations, and geographic regions. In addition, deunionization and the declining value of the minimum wage in recent decades have affected worker access to health care and other employee benefits.

In this Population Bulletin, we examine demographic and socioeconomic characteristics of the U.S. civilian labor force and changes since 1950 and relate these trends to demographic and institutional changes and economic restructuring internationally and within the United States (see Box 1, page 4).

Demographic Trends

As the U.S. population nearly doubled between 1950 and 2000, the labor force has also grown, from 62 million in 1950 to 149 million in 2005 (see Table 1, page 4). Wages and benefits have increased, and occupations continue to shift from mostly farming and manufacturing work to white-collar jobs. Changes in population composition and labor force participation rates have also resulted in a workforce that includes more older Americans, women, racial and ethnic minorities, and people born outside of the United States.

Labor Force Growth

The historical growth of the U.S. labor force in the last four decades is linked to two main factors: growth in population size and increases in women's labor force participation rates.

In the 1960s, the U.S. labor force increased by 1.7 percent annually, as baby boomers-those born during the high-fertility period from 1946 to 1964-started to enter the workforce. Labor force growth accelerated during the 1970s as more baby boomers reached adulthood. At the same time, women started to enter the labor force in greater numbers. As a result of both these trends, the labor force grew at a fast pace of 2.6 percent each year.

By the 1980s and 1990s, most of the baby boomers had already entered the workforce, and a smaller cohort of workers followed. Labor force growth slowed to 1.6 percent during the 1980s and to 1.1 percent during the 1990s. Growth rates would have slowed even further without the inflow of workers arriving from outside the United States. Between I960 and 2000, the proportion of the civilian employed workforce that was foreign-born increased from 6 percent to 13 percent. In 2007, they were 16 percent of civilian workers and accounted for about half of the total annual labor force increase.

Over the next 50 years, the labor force is projected to grow even more slowly (at about 0.6 percent per year) as baby boomers retire.1 As a result, there are mounting concerns about future growth of the U.S. economy.

Despite the aging of the baby-boom cohort, the U.S. labor force is in a better position than most countries in Europe and East Asia, which are facing shrinking workforces in coming decades.2 Japan, for example, is projected to see a 12 percent drop in its labor force between 2000 and 2020.3 In contrast, the relatively young age structure of the U.S. population will keep the labor force growing, just at a slower pace than in recent decades.

Female Labor Force Participation

Since 1970, the proportion of all women in the labor force has increased from 43 percent to nearly 60 percent, while the proportion of men in the labor force decreased slighdy, from 80 percent to 73 percent in 2007 (see Figure 1). This convergence between men's and women's labor force participation rates represents the tail end of a trend that began at least 100 years ago; in 1900, only 19 percent of women of working age were working or looking for work.4 In 2007, women represented 46 percent of people in the labor force. …

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