- Describe the current U.S. workforce and the trend of polarization
- Describe the U.S. workforce as pertaining to women, racial minorities, and immigrants
The American Dream has always been based on the availability of opportunity. There is a great deal of mythologizing about the energetic upstart who can climb to success based on hard work alone. Common wisdom states that if you study hard, develop good work habits, and excel in school, then you’ll have the opportunity to land a good job. And although the reality has always been more complex than the myth might lead us to believe, the worldwide recession that began in 2008 took its toll on the American Dream. During the recession, more than 8 million U.S. workers lost their jobs, and unemployment rates surpassed 10 percent. Today, while the recovery is still incomplete, many sectors of the economy are expanding, and unemployment rates have receded.
The Changing Workforce
The mix of jobs available in the United States began changing many years before the 2008 recession, and, as mentioned above, the American Dream has not always been easy to achieve. Geography, race, gender, and other factors have complicated the pathway to success. More recently, the increased outsourcing—or contracting a job or set of jobs to an outside source—of manufacturing jobs to developing nations has greatly diminished the number of high-paying, often unionized, blue-collar positions available. A similar problem has arisen in the white-collar sector, with many low-level clerical and support positions also being outsourced, as evidenced by the international technical-support call centers in Mumbai, India, and Newfoundland, Canada. The number of supervisory and managerial positions has been reduced as companies streamline their command structures and industries continue to consolidate through mergers. Even highly educated skilled workers such as computer programmers have seen their jobs vanish overseas.
The automation of the workplace, which replaces workers with technology, is another cause of changes in the job market. Computers can be programmed to do many routine tasks faster and less expensively than people who used to do such tasks. Jobs like bookkeeping, clerical work, and repetitive tasks on production assembly lines all lend themselves to automation. Envision your local supermarket’s self-scan checkout aisles. The automated product scanners, card readers, and change dispensers can largely take the place of paid employees. Now one cashier can oversee transactions at six or more self-scan aisles, which was a job that used to require one cashier per aisle.
Real Money, Virtual Worlds
If you are not one of the tens of millions gamers who enjoy World of Warcraft or other online virtual world games, you might not even know what MMORPG stands for. But if you made a living playing massively multiplayer online role-playing games (MMORPGs), as a growing number of enterprising gamers do, then massive multiplayer online role-playing games might matter a bit more. According to an article in Forbes magazine, the online world of gaming has been yielding very real profits for entrepreneurs who are able to buy, sell, and manage online real estate, currency, and more for cash (Holland and Ewalt 2006). If it seems strange that people would pay real money for imaginary goods, consider that for serious gamers the online world is of equal importance to the real one.
These entrepreneurs can sell items because the gaming sites have introduced scarcity into the virtual worlds. The game makers have realized that MMORPGs lack tension without a level of scarcity for needed resources or highly desired items. In other words, if anyone can have a palace or a vault full of wealth, then what’s the fun?
So how does it work? One of the easiest ways to make such a living is called gold farming, which involves hours of repetitive and boring play, hunting, and shooting animals like dragons that carry a lot of wealth. This virtual wealth can be sold on eBay for real money: a timesaver for players who don’t want to waste their playing time on boring pursuits. Players in parts of Asia engage in gold farming and play eight hours a day or more to sell their gold to players in Western Europe or North America. From virtual prostitutes to power levelers (people who play the game logged in as you so your characters get the wealth and power), to architects, merchants, and even beggars, online players can offer to sell any service or product that others want to buy. Whether buying a magic carpet in World of Warcraft or a stainless-steel kitchen appliance in Second Life, gamers have the same desire to acquire as the rest of us—never mind that their items are virtual. Once a gamer creates the code for an item, she can sell it again and again for real money. And finally, you can sell yourself. According to Forbes, a University of Virginia computer science student sold his World of Warcraft character on eBay for $1,200, due to the high levels of powers and skills it had gained (Holland and Ewalt 2006).
So should you quit your day job to make a killing in online games? Probably not. Those who work hard might eke out a decent living, but for most people, grabbing up land that doesn’t really exist or selling your body in animated action scenes is probably not the best opportunity. Still, for some, it offers the ultimate in work-from-home flexibility, even if that home is a mountain cave in a virtual world.
Recovery from the Great Recession
In 2015, the United States continued its recovery from the “Great Recession,” arguably the worst economic downturn since the stock market collapse in 1929 and the Great Depression that ensued.
The 2008 recession was brought on by aggressive lending, extremely risky behavior by investment firms, and lax oversight by the government. During this time, banks provided mortgages to people with poor credit histories, sometimes with deceptively low introductory interest rates. When the rates rose, borrowers’ mortgage payments increased to the point where they couldn’t make payments. At the same time, investment firms had purchased these risky mortgages in the form of large bundled investments worth billions of dollars each (mortgage-backed securities or MBS). Rating agencies were supposed to rate mortgage securities according to their level of risk, but they typically rated all MBS as high-quality no matter what types of mortgages they contained. When the mortgages defaulted, the investment firms’ holdings went down. The massive rate of loan defaults put a strain on the financial institutions that had made the loans as well as those that had purchased the MBS, and this stress rippled throughout the entire economy and around the globe.
With the entire financial system on the verge of permanent damage, the U.S. government bailed out many of these firms and provided support to other industries, such as airlines and automobile companies. But the Recession couldn’t be stopped. The United States fell into a period of high and prolonged unemployment, extreme reductions in wealth (except at the very top), stagnant wages, and loss of value in personal property (houses and land).
Starting in 2009, however, employment began to tick back up as companies found their footing. By 2012, most of the country’s employment rates were similar to the levels prior to the Great Recession. However, for most segments of the population, median income had not increased, and in fact it has receded in many cases. The size, income, and wealth of the middle class have been declining since the 1970s— effects that were perhaps hastened by the recession. Today, wealth is distributed inequitably at the top. Corporate profits have increased more than 141 percent, and CEO pay has risen by more than 298 percent.
Although wages had not increased, and certain parts of the economy, such as brick-and-mortar retail (department stores and similar chains) were doing poorly, the economy as a whole grew from the time after the Great Recession through 2020. Unemployment reached a historic low in late 2019. COVID-19 changed all that. As you may have experienced yourself, entire industries suffered incredible losses as they were forced to shut down or severely reduce operations. Some people were laid off from their jobs, while others had their hours or wages reduced. Unemployment skyrocketed again, reaching a new high of nearly 15 percent, only about six months after it had been at its record low. Industries as diverse as hospitality and mining reported massive decreases in employment, and part-time workers in particular were hard hit. By early 2021, the overall unemployment rate had returned to generally normal levels. The impact on those who had gone without work for so long, however, was significant (Congressional Research Service 2021).
Recent Economic Conditions
While the job market on the whole is again growing, it is doing so in a polarized fashion. Polarization means that a gap has developed in the job market, with most employment opportunities at the lowest and highest levels and few jobs for those with midlevel skills and education. At one end, there has been strong demand for low-skilled, low-paying jobs in industries like food service and retail. On the other end, some research shows that in certain fields there has been a steadily increasing demand for highly skilled and educated professionals, technologists, and managers. These high-skilled positions also tend to be highly paid (Autor 2010).
The fact that some positions are highly paid while others are not is a characteristic of the class system, an economic hierarchy in which movement (both upward and downward) between various rungs of the socioeconomic ladder is possible. Theoretically, at least, the class system as it is organized in the United States is an example of a meritocracy, an economic system that rewards merit––typically in the form of skill and hard work––with upward mobility. A theorist working in the functionalist perspective might point out that this system is designed to reward hard work, which encourages people to strive for excellence in pursuit of reward, while a theorist working in the conflict perspective might counter that hard work does not guarantee success even in a meritocracy, because social capital––the accumulation of a network of social relationships and knowledge that will provide a platform from which to achieve financial success––is often required to access the high-paying jobs. Increasingly, we are realizing intelligence and hard work aren’t enough. If a person lacks access, connections, and certain forms of knowledge, they are unlikely to experience upward mobility.
With so many jobs being outsourced or eliminated by automation, what kind of jobs are in demand in the United States? While fishing and forestry jobs are in decline, other labor markets jobs are expanding. These include community and social service, personal care and service, finance, computer and information services, and healthcare. The chart below, from the U.S. Bureau of Labor Statistics, illustrates areas of projected growth.
Professions that typically require significant education and training and tend to be lucrative career choices. In particular, jobs that require some type of license or formal certification – be it healthcare, technology, or a trade – usually have a higher salary than those that do not. Service jobs, according to the Bureau of Labor Statistics, can include everything from jobs with the fire department to jobs scooping ice cream (Bureau of Labor Statistics 2019). There is a wide variety of training needed, and therefore an equally large wage potential discrepancy. One of the largest areas of growth by industry, rather than by occupational group (as seen above), is in the health field. This growth is across occupations, from associate-level nurse’s aides to management-level assisted-living staff. As baby boomers age, they are living longer than any generation before, and the growth of this population segment requires an increase in capacity throughout our country’s elder care system, from home healthcare nursing to geriatric nutrition.
Notably, jobs in farming are in decline. This is an area where those with less education traditionally could be assured of finding steady, if low-wage, work. With these jobs disappearing, more and more workers will find themselves untrained for the types of employment that are available.
Another projected trend in employment relates to the level of education and training required to gain and keep a job. Growth rates are higher for those with more education. Those with a professional or master’s degree may expect job growth of 13.1 and 16.7 percent respectively between 2016 and 2026, while jobs that require a bachelor’s degree are projected to grow 10.1 percent. At the other end of the spectrum, jobs that require a high school diploma or equivalent are projected to grow at only 5.1 percent, while jobs that require less than a high school diploma will grow 6.4 percent. Quite simply, without a degree, it will be more difficult to find a job. It is worth noting that these projections are based on overall growth across all occupation categories, so obviously there will be variations within different occupational areas. However, once again, those who are the least educated will be the ones least able to fulfill the American Dream.
In the past, rising education levels in the United States had been able to keep pace with the rise in the number of education-dependent jobs. However, since the late 1970s, men have been enrolling in college at a lower rate than women, and graduating at a rate of almost 10 percent less. The lack of male candidates reaching the education levels needed for skilled positions has opened opportunities for women, minorities, and immigrants (Wang 2011).
The Wage Gap in the United States
The Equal Pay Act, passed by the U.S. Congress in 1963, was designed to reduce the wage gap between men and women. The act in essence required employers to pay equal wages to men and women who were performing substantially similar jobs. However, more than fifty years later, women continue to make less money than their male counterparts. According to a report released by the White House in 2013, full-time working women made just 77 cents for every dollar a man made (National Equal Pay Taskforce 2013). Seven years later, the gap had only closed by four cents, with women making 81 cents for every dollar a man makes (Payscale 2020).
Women have been entering the workforce in ever-increasing numbers for several decades. They have also been finishing college and going on to earn advanced degrees at a higher rate than men do. This has resulted in many women being better positioned to obtain high-paying, high-skill jobs. In 2018, women still earned 85% of what men earned, according to a Pew Research Center analysis of median hourly earnings for both full- and part-time workers in the United States. Based on this estimate, it would take an extra 39 days of work for women to earn what men did in 2018 (Pew Research, 2019). Countless studies that have controlled for work experience, education, and other factors unanimously demonstrate that disparity between wages paid to men and to women still exists (Pew Research Center 2014).
A part of the White House report read, “This significant gap is more than a statistic—it has real-life consequences. When women, who make up nearly half the workforce, bring home less money each day, it means they have less for the everyday needs of their families, and over a lifetime of work, far less savings for retirement.”
As shocking as it is, the gap actually widens when we add race and ethnicity to the picture. For example, African American women make on average 64 cents for every dollar a White male makes. Latina women make 56 cents, or 44 percent less, for every dollar a White man makes. African American and Latino men also make notably less than White men. Asian Americans tend to be the only minority that earns as much as or more than White men.
Certain professions have their own differences in wage gaps, even those whose participants have higher levels of education and supposedly a more merit-based method of promotion and credit. For example, U.S. and Canadian scientists have a significant wage gap that begins as soon as people enter the workforce. For example, of the PhD recipients that have jobs lined up after earning their degree, men reported an initial salary average of $92,000 per year, while women’s was only $72,500. Men with permanent jobs in the life sciences reported an expected median salary of $87,000, compared with $80,000 for women. In mathematics and computer sciences, men reported an expected median salary of $125,000; for women, that figure was $101,500 (Woolston 2021).
- Read the following article from The Pew Research Center to see more statistics about the gender wage gap.
- The role of women in the workplace is constantly changing. To learn more, check out information from the U.S. Department of Labor.
- The Employment Projections Program of the U.S. Bureau of Labor Statistics looks at a ten-year projection for jobs and employment. To see some trends for the next decade, visit the U.S. Bureau of Labor Statistics website.
- Robert Putnam wrote the influential book, Bowling Alone: The Collapse and Revival of American Community about the collapse of social capital. Watch a video about the book Bowling Alone.
Race and The Workforce
As shocking as it is, the gender wage gap actually widens when we add race and ethnicity to the picture. For example, African American women make on average 64 cents for every dollar a Caucasian male makes. Latina women make 56 cents, or 44 percent less, for every dollar a Caucasian male makes. African American and Latino men also make notably less than Caucasian men. Asian Americans tend to be the only minority that earns as much as or more than Caucasian men.
This discrimination is also evidenced by the fact that Blacks and Latinos get fewer callbacks for job interviews and have fewer job opportunities, when compared with whites. In a meta-analysis of research conducted since 1990, sociologists found that white applicants with identical résumés as Black applicants consistently received an average of 36% more callbacks than Black applicants. This number remained essentially unchanged in 25 years, between 1990 and 2015. White applicants also received 24% more callbacks than Latino applicants, and this number has improved slightly over the same time period.
The Black unemployment rate is essentially double that of whites. Data from the third quarter of 2018 revealed the Black unemployment rate to be about 6.3 percent, while the white unemployment was at 3.2 percent. Hispanic unemployment was also higher than whites, at 4.5%, whereas Asian workers had a slightly lower rate, at 3.0%.
Watch this video as Harvard sociologist William Julius Wilson explains how finding a job can be extremely complicated for those in poor or minority neighborhoods.
Immigration and the Workforce
Simply put, people will move from where there are few or no jobs to places where there are jobs, unless something prevents them from doing so. The process of moving to a country is called immigration. Due to its reputation as the land of opportunity, the United States has long been the destination of all skill levels of workers. While the rate decreased somewhat during the economic slowdown of 2008, immigrants, both legal and illegal, continue to be a major part of the U.S. workforce.
In 2005, before the recession arrived, immigrants made up a historic high of 14.7 percent of the workforce (Lowell et al. 2006). During the 1970s through 2000s, the United States experienced both an increase in college-educated immigrants and in immigrants who lacked a high school diploma. With this range across the spectrum, immigrants are well positioned for both the higher-paid jobs and the low-wage low-skill jobs that are predicted to grow in the next decade (Lowell et al. 2006).
A 2016 survey revealed that foreign-born full-time workers had a median salary at 83.1% of the median earnings for native-born workers ($715 compared to $860); foreign born men earned 79% of the median earnings of native-born men, while foreign-born women earned 86% of their native-born counterparts.
In the early 2000s, it certainly seemed that the United States was continuing to live up to its reputation of opportunity. But what about during the recession of 2008, when so many jobs were lost and unemployment hovered close to 10 percent? How did immigrant workers fare then? The answer is that as of June 2009, when the National Bureau of Economic Research (NEBR) declared the recession officially over, “foreign-born workers gained 656,000 jobs while native-born workers lost 1.2 million jobs” (Kochhar 2010). As these numbers suggest, the unemployment rate that year decreased for immigrant workers and increased for native workers. The reasons for this trend are not entirely clear. Some Pew research suggests immigrants tend to have greater flexibility to move from job to job and that the immigrant population may have been early victims of the recession, and thus were quicker to rebound (Kochhar 2010). Regardless of the reasons, the 2009 job gains are far from enough to keep them inured from the country’s economic woes. As Brookings Senior Fellow Vanda Felbab-Brown explains “the impact of immigrant labor on the wages of native-born workers is low… However, undocumented workers often work the unpleasant, back-breaking jobs that native-born workers are not willing to do.”
While the political debate is often fueled by conversations about low-wage-earning immigrants, there are actually as many highly skilled––and high-earning––immigrant workers as well. Many immigrants are sponsored by their employers who claim they possess talents, education, and training that are in short supply in the U.S. These sponsored immigrants account for 15 percent of all legal immigrants (Batalova and Terrazas 2010). Interestingly, the U.S. population generally supports these high-level workers, believing they will help lead to economic growth and not be a drain on government services (Hainmueller and Hiscox 2010). On the other hand, illegal immigrants tend to be trapped in extremely low-paying jobs in agriculture, service, and construction with few ways to improve their situation without risking exposure and deportation.
Think It Over
- As polarization occurs in the U.S. job market, this will affect other social institutions. For example, if midlevel education won’t lead to employment, we could see polarization in educational levels as well. Use the sociological imagination to consider what social institutions may be impacted, and how.
- What, in your view, are the major barriers to obtaining work in the United States and how can these barriers best be overcome?
- workers being replaced by technology
- a practice where jobs are contracted to an outside source, often in another country
- a practice where the differences between low-end and high-end jobs become greater and the number of people in the middle levels decreases
- Bureau of Labor Statistics (2016). Employment, wages, and projected change in employment by typical entry-level education. Retrieved from https://www.bls.gov/emp/tables/education-summary.htm. ↵
- Ariane Hegewisch (September 2018). The Gender Wage Gap: 2017; Earnings Differences by Gender, Race, and Ethnicity. Institute for Women's Policy Research. Retrieved from https://iwpr.org/publications/gender-wage-gap-2017/. ↵
- Lincoln Quillian, Devah Pager, Ole Hexel, Arnfinn H. Midtbøen (2017). The persistence of racial discrimination in hiring. Proceedings of the National Academy of Sciences Oct 2017, 114 (41) 10870-10875; DOI: 10.1073/pnas.1706255114. ↵
- Janelle Jones (October 2018). Black unemployment is at least twice as high as white unemployment at the national level and in 12 states and D.C. Economic Policy Institute. Retrieved from https://www.epi.org/publication/2018q3_unemployment_state_race_ethnicity/. ↵
- Bureau of Labor Statistics, U.S. Department of Labor, The Economics Daily, Foreign-born workers made 83.1 percent of the earnings of their native-born counterparts in 2016 on the Internet at https://www.bls.gov/opub/ted/2017/foreign-born-workers-made-83-point-1-percent-of-the-earnings-of-their-native-born-counterparts-in-2016.htm (visited May 20, 2019). ↵
- https://www.brookings.edu/blog/brookings-now/2017/08/24/do-immigrants-steal-jobs-from-american-workers/ ↵