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OCR for page 51
labor Supply and Demand Within the
U.S. Economy
As we noted in Chapter 1, the level of total employment within the U.S.
economy is determined primarily by nontechnological factors. Techno-
logical change can, however, affect the demand of individual sectors or
industries for labor. Process innovations that increase labor productivity
reduce the amount of labor (and potentially the amount of other inputs)
required per unit of output. But this reduction need not and in fact has not
translated into increased total unemployment in the United States.
Instead, the employment impacts of any reductions in the amount of labor
required for each unit of a product typically are offset by increases in
demand for the product in response to lower prices or increases in the
demand for other commodities. In addition, product innovations can
create jobs in entirely new industries. To maximize the employment-
expanding influence of technological change within the economy, workers
must be able to move from sectors of declining labor demand to those in
which employment opportunities are expanding. Indeed, the technologi-
cal and other factors that have altered the structure of the U.S. economy
and the demand for different types of labor during the past two decades
appear to have increased the need for such movement.
THE U.S. ECONOMY: CHANGES IN STRUCTURE AND
PERFORMANCE SINCE THE 1960s
Both the structure and performance of the U.S. economy have changed
greatly since the 1960s. The share of private nonagricultural employment
51
OCR for page 52
52 TECHNOLOGY AND EMPLO YMENT
accounted for by manufacturing, which stood at roughly 36 percent in
1966, has continued to decline, to roughly 24 percent in 1985 (U.S. Bureau
of Labor Statistics, 1985a, 1986a). At the same time, international trade
has expanded and now plays a much more significant role within the
economy. Imports were 5.1 percent of GNP in 1966 and 11.4 percent in
1986; the share of GNP represented by exports expanded from 6 percent
in 1966 to 8.9 percent in 1986 (President's Council of Economic Advisers,
1987, Tables B-1 and B-991.~
Sales in the industries associated with (as it was known in the 1960s)
"automation" that is, instruments, office equipment, computers, and
electronic components have more than doubled, growing from $53.4
billion (in 1986 dollars) in 1967 to more than $114 billion in 1985 (U.S.
Bureau of the Census, 1982b, 1985a, 1985b).2 Although the pace of
technological change may not have increased greatly since the 1960s,
"automation" technologies now are applied more widely. Twenty years
ago, automation was viewed as applicable mainly in the manufacturing
sector; now, both the manufacturing and nonmanufacturing sectors make
extensive use of information and computer-based technologies.
As we noted in Chapter 2, changes in the international economic
environment since the mid-1960s have narrowed the technological "gap"
between the United States and other industrial economies. The dwindling
technological lead of the United States, along with many other factors
(e.g., the Vietnam war, oil price increases by the Organization of
Petroleum Exporting Countries), has contributed to a deterioration in the
performance of the U.S. economy. Unemployment levels throughout the
1970s and 1980s have remained well above those of the 1960s (Podgursky,
19841.3 The average annual rate of growth in real average hourly earnings
during 1970-1986 was -0.4 percent, following average annual growth
rates of 2.7 and 1.7 percent, respectively, during the 1950s and 1960s
(President's Council of Economic Advisers, 1987, Table B-411. Finally,
labor productivity growth in the U.S. nonfarm sector has declined since
the 1960s, reaching an average annual rate of less than 1 percent during
1973-1986 (President's Council of Economic Advisers, 1987, Table B-441.
Growth in imports and exports of goods relative to total U.S. production of goods during
this period is even more dramatic. "Merchandise" imports and exports, which include
agricultural products, automotive goods, petroleum products, and industrial supplies and
materials, respectively, grew from 6.6 and 7.6 percent of U.S. goods production in 1966 to
20.2 and 12.8 percent in 1985 (President's Council of Economic Advisers, 1987, Tables B-6
and B-99).
2This calculation does not include telecommunications equipment sales, which have also
grown rapidly since the mid-1960s.
3Podgursky noted that unemployment rates at the business cycle quarterly peaks in 1969,
1973, 1979, and 1981 were 3.6, 4.8, 6.O, and 7.4 percent, respectively.
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LABOR SUPPL Y AND DEMAND 53
TABLE 3-1 Sectoral Composition (percent) of New Jobs in the
U.S. Economy, 1955-1965, 1965-1975, and 1975-1985
Period
Sector1955-1965 1965-1975 1975-1985
Manufacturing11.9 1.9 4.8
Mining and construction2.0 2.5 6.3
Transportation and utilities-1.0 3.1 3.4
Wholesale and retail trade21.8 26.5 29.0
Finance, insurance, and
real estate6.9 7.4 8.7
Services27.7 30.2 39.1
Government31.7 28.4 8.2
NOTE: There were 10.1 million new jobs created during 1955-1965, 16.2 million during
1965-1975, and 20.7 million during 1975-1985. Percentages may not total 100 due to
rounding.
SOURCE: U.S. Department of Commerce, International Trade Administration (1987),
Table 9, p. 12.
Despite its disappointing performance in these areas, the U.S. economy
expanded employment opportunities rapidly during 1975-1985. Indeed,
more than 20 million jobs were created during the 1975-1985 decade, an
expansion that allowed the labor force to absorb both the "baby boom"
cohort and greater numbers of women seeking employment. The share of
the 20.7 million new jobs created during 1975-1985 accounted for by the
private nonmanufacturing sector was greater than in previous decades of
the post-World War II period (Table 3-1~. Four industry groups (whole-
sale and retail trade; transportation and utilities; finance, insurance, and
real estate; and services) collectively accounted for approximately 80
percent of the new jobs created during 1975-1985, a substantial increase
from these groups' shares of roughly 55 percent during 1955-1965 and 67
percent during 1965-1975. Although the manufacturing sector's share of
the jobs created during 1975-1985 (4.8 percent) was well below its share
during 1955-1965 (11.9 percent), the 1975-1985 share was higher than that
of 1965-1975 (1.9 percent). Many more jobs were created in man~ufactur-
ing during 1975-1985 than during 1965-1975.
Several studies (e.g., Bluestone and Harrison, 1986) have noted that
many of the jobs created during 1979-1984 paid relatively low wages.
Bluestone and Harrison's empirical results, however, are sensitive to the
temporal end point of their analysis. Extending their analysis beyond 1984
to cover 1985 substantially increases the share of high-wage jobs that
were created during the entire period because 1981 and 1982, years that
include a severe recession, receive less weight in the longer time series.
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54 TECHNOLOG Y AND EMPLO YMENT
Other evidence suggests that the jobs created during 1975-1985 were
not uniformly "low-quality" jobs (i.e., low-wage jobs with minimal skill
requirements and prospects for advancement). Leon's (1982) study of the
occupational structure of the jobs created during 1972-1980 indicates that,
during most of this period, the occupations exhibiting the highest rates of
growth were professional, technical, and managerial positions. Moreover,
according to Rosenthal (1985), the distribution of weekly earnings within
the overall occupational structure in 1982 was slightly less skewed toward
low-wage occupations than in earlier years. Nonetheless, McMahon and
Tschetter (1986) argue that, within the high-wage occupations whose
growth has been rapid, there is a tendency for the jobs created since 1973
to occupy a relatively low position in the intraoccupational earnings
distribution.
The facts of job expansion, earnings growth, and occupational shifts are
less in dispute than the interpretation of the various trends. Some analysts
(e.g., Bluestone and Harrison, 1986) view recent trends as evidence that
equality of economic opportunity has declined because of technological
or structural change for example, increased international competition or
the growth of service sector employment. Others (e.g., Blackburn and
Bloom, 1987; Rosters and Ross, 1987; Lawrence, 1984; Levy, 1987;
McMahon and Tschetter, 1986; Rosenthal, 1985) see these trends as the
result of demographic factors, combined with the severe recession of the
early 1980s, slow growth in the overall economy, and low productivity
growth. These researchers suggest that rapid growth in the U.S. labor
supply coincided with slow (or negative, during 1981-1982) economic
growth, expanding the supply of job seekers relative to the number of
openings and placing downward pressure on wages. Although the various
trends require continued monitoring and assessment, slow economic
growth and low rates of productivity increase, rather than technological
change in the U.S. economy, appear to be the key factors in explaining
these shifts.
The causes of the slow economic growth, high unemployment, and
declining productivity growth rates that have afflicted the United States as
well as other industrial nations since the 1960s are not well understood.
Some portion of these developments can be ascribed to the disruptions in
the global economy that occurred when oil prices rose in 1973 and 1979.
But even when the erects of these disruptions are discounted, the record
of U.S. demand management policies (i.e., fiscal and monetary policies)
since the mid-1960s has been disappointing. Many economists and policy
analysts now are more skeptical about the theory and practice of
macroeconomic policy than they were in the 1960s. The ability of
policymakers to reduce or eliminate unemployment through careful fiscal
and monetary policies appears to be more limited than originally sus
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LABOR SUPPL Y AND DEMAND 55
pected, due in part to the structural changes that have occurred in the
U.S. and global economic systems.
TRENDS IN U.s. UNEMPLOYMENT
Aggregate Unemployment
One of the most important factors contributing to public concern over
the effects of technological change in the U.S. economy is the growth,
noted earlier, in aggregate unemployment above the average levels of the
1950s and 1960s. There are no widely accepted explanations of the
post-1973 growth in unemployment, although slow economic growth and
frequent recessions (there have been four during this period) have
contributed to it. Two of the recessions (1974-1975 and 1981-1982) were
the most severe economic downturns the country has experienced since
the Great Depression. In addition, the 1970s and 1980s saw no lengthy
economic expansion comparable to that of the 1960s, although the current
growth cycle may yet prove equally durable. Economic growth during
1966-1985 was much lower than that during 1948-1966 (a more detailed
discussion of slower output growth follows). The frequently recessionary
condition and slow growth of the U.S. economy since 1970, as well as the
"oil shocks" of 1973 and 1979, all reduced the demand for labor, placing
stronger upward pressure on aggregate unemployment rates than during
the 1960s.
Has the entry into the labor force of the huge baby boom cohort and a
growing number of women, which increased the labor supply, contributed
to higher aggregate unemployment during the 1970s and 1980s? According
to Podgursky (1984), the baby boom cohort contributed significantly to
aggregate unemployment in the early and mid-1970s, but its contribution
has since declined. Instead, higher unemployment in the early 1980s
resulted in large part from permanent job losses, which were concentrated
among workers in manufacturing, mining, and construction. The higher
unemployment rates of the 1980s appear to reflect longer spells of
unemployment for a relatively small portion of the work force, rather than
an increase in the share of the work force experiencing short spells of
unemployment (Podgursky, 1984~.4
A portion of the higher post-1973 unemployment, especially the unem-
ployment of the 1980s, appears therefore to be structural; that is, it
reflects mismatches between worker skills or worker locations and job
4Average unemployment duration increased from 9.3 weeks in 1970 to 17.5 weeks in 1982
(Podgursky, 1984).
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56 TECHNOLOGY AND EMPLOYMENT
openings for a relatively small group of unemployed workers who
experience lengthy spells of unemployment, rather than a cyclical down-
turn in the overall economy that results in short spells of joblessness for
a very large number of workers (Summers, 1986~. Such mismatches may
come from technological change, but they also reflect rapid structural
change of all types within this economy since 1970, including dramatic
increases in international trade and recent significant import penetration
in numerous manufacturing industries.5
Although aggregate unemployment has been high, relative to post-1945
averages, during the 1970s and 1980s, U.S. unemployment rates recently
have fallen below those of many Western European nations, including
West Germany, France, and Great Britain. Moreover, the average
duration of U.S. unemployment now is shorter than that observed in a
number of Western European nations. In 1985 slightly more than 15
percent of the unemployed population in the United States had been out
of work for more than 6 months; in Great Britain, 60 percent of those
unemployed had been out of work that long, whereas in West Germany
this figure stood at 55 percent.6
The lower average rate and shorter duration of U.S. unemployment
reflect the high rate of job creation and loss in the U.S. economy, as well
as the relatively high geographic mobility of U.S. workers. Leonard
(1986), in his study of Wisconsin, estimated that, each year, the jobs
created and lost equaled nearly 14 percent and 11 percent, respectively, of
the previous year's jobs.7 The U.S. labor market thus is extremely fluid
and dynamic, attributes that should ease the adjustment of workers to
new technology.
How does high or low aggregate unemployment affect unemployment
within different groups of U.S. workers? Blue-collar workers accounted
for a disproportionate share of the growth in U.S. unemployment during
1970-1982. With 31 percent of the 1982 labor force, their share of the
5Costrell's (1987) measure of structural change, which is based on changes in the
employment shares of the 12 economic sectors discussed in greater detail later in this
chapter, suggests that such change has accelerated during 1979-1985, compared with
1973-1979 and 1966-1973. Rissman (1986) obtained similar results.
6See "The Supple Rigidity of America's Job Machine," The Economist 302 (February 7,
1987):28-29. The entry into the labor force of the baby boom cohort is partly responsible for
recent high European unemployment rates. The European baby boom postdates that of the
United States by 5-10 years; Western European economies now are absorbing large
increases in their labor forces that exert upward pressure on unemployment rates
(Norwood, 1983).
'Leonard's study examined the 1977-1982 period, which covers years of both economic
expansion and of recession. His results therefore should not be biased by the state of the
business cycle.
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LABOR S UPPL Y AND DEMAND 57
1970-1982 increase in the unemployment rate was 47 percent (Podgursky,
19841. Unemployment is substantially lower among whites than among
blacks; black male unemployment rates are from two to three times higher
than those of white men (President's Council of Economic Advisers,
1987, Table B-38; U.S. Bureau of the Census, 1986, Table 6621. In
general, young people and minorities bear the brunt of cyclical downturns
in the economy because of labor market imperfections (e.g., discrimina-
tion) and skill differentials. Conversely, a full-employment economy (in
which unemployment is restricted largely to those individuals voluntarily
engaged in job search) particularly benefits disadvantaged workers (see
Chapter 51.
Displacement
One group of the unemployed whose situation has attracted consider-
able attention and concern (Flaim and Sehgal, 1985; Podgursky, 1987;
Secretary of Labor's Task Force on Economic Adjustment and Worker
Dislocation, 1986; U.S. Congress, Office of Technology Assessment,
1986a, 1986b) comprises experienced workers who suffer permanent job
loss or "displacement." The U.S. Bureau of Labor Statistics (BLS) 1984
survey of displaced workers focused on workers who had lost jobs
because of plant shutdowns, an employer going out of business, or
permanent layoffs resulting from other factors (Flaim and Sehgal, 19851.9
Displaced workers are widely cited (U.S. Congress, Office of Technology
Assessment, 1986b) as victims of technological change.
How large a share of the unemployed population comprises displaced
or dislocated workers? Any estimate of this share depends on the
definition of dislocation used. Counting all workers suffering from perma-
nent job loss as displaced, BLS estimated that 11.5 million workers were
displaced during 1979-1983, yielding an average annual flow of 2.3 million
workers. (Unpublished BLS data cited in U. S. Congress, Office of
Technology Assessment, 1986a, suggest that the flow ranged from 1.2
million workers in 1979 to 3.3 million workers in 1983.) When the
definition of a displaced worker is restricted to "experienced" workers
sThe BLS administers the quarterly Current Population Survey (CPS), gathering data on
the employment and earnings of respondents. In January 1984 and January 1986, 13LS added
a special supplement to the CPS to obtain data on the former earnings and employment
status of workers (20 years of age or older) who had lost their jobs. These data are the basis
of the analyses by Flaim and Sehgal (1985), Podgursky (1986), and others.
9Estimating the size of the displaced worker population is a complex problem. The
Secretary of Labor's Task Force on Economic Adjustment and Worker Dislocation (1986)
developed seven definitions of displaced workers, each of which yielded a different estimate
of the displaced worker population.
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58 TECHNOLOGY AND EMPLOYMENT
workers with at least 3 years' experience in the job from which they were
laid ok the BLS survey data suggest that a total of 5.1 million workers
were displaced during 1979-1983 (Flaim and Sehgal, 1985), which implies
an annual average flow of slightly more than 1 million workers. (BLS data
cited in U.S. Congress, Office of Technology Assessment, 1986a, esti-
mate that this flow ranged from 0.6 million workers in 1979 to 1.4 million
workers in 1983.) Podgursky (1987) also analyzed the number and
characteristics of workers displaced during 1979-1982, restricting his
population to full-time nonagricultural workers. He estimated that 6.4
million workers were displaced during this period, yielding an average
annual how of 1.6 million displaced workers.~° Significantly, Podgur-
sky's comparative analysis of data from the 1984 and 1986 displaced
worker surveys revealed little decline in the average rate of displace-
ment 1.5 million workers per year during 1981-1984.
Although the BLS estimate of the number of experienced workers
displaced annually (regardless of the causes of displacement) is no more
than 10-13 percent of the total unemployed population at any point in
time, if one considers the share of unemployment accounted for by all
displaced workers, the annual flow of such workers increases to 20-31
percent. Moreover, the contribution of displaced workers to increases in
unemployment since 1980 has been unusually high (Summers, 1986~. The
Secretary of Labor's Task Force on Economic Adjustment and Worker
Dislocation (1986) estimated that more than 50 percent of the increase in
unemployment during the 1981-1982 recession resulted from permanent
job loss a substantially higher figure than the permanent job loss share of
the unemployment increase (roughly 37 percent) in the three prior
recessions.
Once displaced, how long are workers unemployed? According to the
1984 BLS survey, nearly 25 percent (1.3 million) of the 5.1 million
workers displaced during 1979-1983 were still unemployed in January
1984, and more than 13 percent (700,000) of those 5.1 million had left the
labor force during 1979-1983 (Flaim and Sehgal, 19851. As of January
1984, 60 percent of the experienced workers displaced during the previous
5 years had found employment, albeit at wages that may have been lower
than those of their previous jobs; 67 percent of the displaced workers
surveyed in January 1986 had found jobs (Flaim and Sehgal, 1985; U.S.
Bureau of Labor Statistics, 1986d). Podgursky's analysis (1987) revealed
'°Unlike BLS, however, Podgursky did not use job tenure to further restrict his
population of displaced workers. He did restrict his analysis to workers who had lost their
jobs at least 12 months prior to the date of the 1984 and 1986 BLS surveys in order to better
assess the postdisplacement unemployment history of survey respondents and minimize the
share of workers who were in fact laid off temporarily.
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LABOR SUPPLY AND DEMAND 59
little if any change in the median duration of unemployment following
displacement in his samples of the displaced worker populations from the
1984 and 1986 surveys; median weeks of unemployment for blue-collar
males fell from 26 weeks (in the 1984 survey, based on 1979-1982) to 20
weeks (from the 1986 survey, covering 1981-1984), whereas median
female blue-collar unemployment increased from 40 to nearly 48 weeks.
The median duration of white-collar workers' unemployment following
displacement fell from 14 weeks to 12 weeks during this period.
Bendick and Devine (1981) found that the geographic region within
which displacement occurred was more significant in explaining the
duration of unemployment than the industry from which workers were
displaced. Indeed, according to the Secretary of Labor's Task Force on
Economic Adjustment and Worker Dislocation (1986), each additional
percentage point in the regional unemployment rate added 1-4 weeks to
the average duration of unemployment for displaced workers in that area.
Other analyses of displaced workers (Flaim and Sehgal, 1985) found that
the earnings losses associated with reemployment after displacement
were largest in areas of high unemployment.
What are the financial consequences of displacement? Of the 5.1 million
experienced workers identified as displaced in the January 1984 BLS
survey, a sizable portion 1.6 million-did not receive unemployment
benefits. Moreover, nearly 50 percent of the 3.5 million experienced
workers who received benefits had exhausted them by January 1984.
About 60 percent of the workers still unemployed in January 1984 who
were covered by health insurance in their previous jobs (a total of 1
million) had lost health insurance coverage.
The median ratio of earnings in new jobs to earnings in previous jobs for
displaced workers who previously were full-time workers and eventually
found other full-time employment (59 percent of blue-collar and 65
percent of white-collar workers in the 1984 survey) in Podgursky's sample
was 93 percent for blue-collar workers and 99 percent for white-collar
workers (Podgursky, 19874. This median disguises considerable variance,
however, as 30 percent of blue-collar workers and 24 percent of white-
collar workers found jobs that paid less than 75 percent of the wages they
received in their previous jobs. For experienced workers previously
employed in durables manufacturing who were displaced during
1979-1983, median weekly earnings declined by more than 20 percent,
from $344 to $273 (Flaim and Sehgal, 19851. Many displaced workers thus
face considerable income losses as a result of layoffs, although they may
own substantial assets (primarily homes).
Data from the 1984 BLS survey (Flaim and Sehgal, 1985) suggest that
the goods-producing sector accounted for the majority of displacements
(60 percent), although it employed less than one-third of the total U.S.
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60 TECHNOLOGY AND EMPLOYMENT
work force. Durables manufacturing, with 12 percent of nonfarm employ-
ment, accounted for 33 percent of total displacements.
The majority of displacements during 1979-1983 occurred in blue-collar
occupations specifically, among operators, fabricators, and laborers
(Flaim and Sehgal, 1985; Podgursky, 19871.~ Displaced workers tended to
be younger and were more likely to be female or black than employed
workers. The duration of unemployment was positively associated with
age: older displaced workers experienced longer periods of unemploy-
ment. Race was the single most significant characteristic in explaining the
duration of displacement; displaced black workers endured significantly
longer periods of unemployment (Podgursky, 1987~.
Few studies of displaced workers analyze the relationship between
education and displacement. Those that do (e.g., Flaim and Sehgal, 1985)
have found that better-educated workers fare better after layoffs. Accord-
ing to Flaim and Sehgal (1985), "about 75 percent of those who had been
in managerial and professional jobs were back at work when interviewed
fin the BLS survey of January 19841. In contrast, among the workers who
had lost low-skill jobs as handlers, equipment cleaners, helpers, and
laborers, less than one-half were working in January 1984" (p. 61.
Podgursky (1987) also found that higher educational attainment was
associated with shorter spells of unemployment after displacement.
The evidence that higher levels of skill are associated with shorter
unemployment is significant in view of the fact that many displaced workers
have serious deficiencies in basic skills. Bendick (1982) found that 34 percent
of those workers from declining industries who were unemployed for 8
weeks or more did not have high school diplomas. Moreover, 49 percent of
workers with such limited educational attainment were functionally illiterate.
The U.S. General Accounting Office (1987a), citing unpublished data from
the January 1984 BLS survey, reported that 32 percent of the dislocated
workers unemployed as of January 1984 were high school dropouts and thus
may have had serious basic skills deficiencies.
Among the causes of recent worker displacement, domestic technolog-
ical change appears to be a relatively minor factor. Although the 1984 and
1986 surveys of displaced workers did not determine the causes of worker
displacement, a 1986 U.S. General Accounting Office (GAO) study did
pursue this question. GAO surveyed approximately 400 establishments to
assess the reasons for plant closures and permanent layoffs, the events
"The census category of "operators, fabricators, and laborers" includes machine
operators; assemblers; inspectors; welders; motor vehicle operators; operating engineers;
freight, stock, and equipment movers; and general laborers. For a complete list of the
detailed occupational categories included in blue-collar employment, see U.S. Bureau of the
Census, 1980, pp. xvi-xviii.
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LABOR SUPPL Y AND DEMAND 61
responsible for most worker displacement. The most significant cause of
these events, cited by 70 percent of the respondents, was reduced product
demand. Increased competition, high labor costs, and the high value of
the U.S. dollar accounted for 69, 57, and 32 percent, respectively, of the
responses. Those causes of displacement that appeared to be directly
related to technological change facility obsolescence and production
automation accounted for 23 percent (lOth out of 14 causes) and 16
percent (12th out of 14), respectively, of the responses.
Although these GAO data are subject to recall bias and differing
interpretations of the meaning of the various causes of layoffs and
closures, they suggest that technological change is not one of the
primary causes of worker displacement. Nonetheless, technological
change in foreign firms or nations often underpins trade-related displace-
ment. When we view the issue in such global terms, it increases the
likelihood that technological change in other nations may play a
significant role in the displacement of American workers.
Although technological displacement is not a large problem for the
U.S. economy in the aggregate, for those workers experiencing pro-
longed unemployment, the financial and emotional costs of technologi-
cal displacement are enormous. We believe that the costs of displace-
ment, regardless of its cause, are often so high that ameliorative policies
are needed. (See Chapter 7 for a discussion and critique of current pub-
lic policies for displaced workers; Chapter 10 presents policy recom-
mendations and options for adjustment assistance for displaced work
ers.)
TRENDS IN LABOR SUPPLY
Long-Term Growth
LABOR FORCE GROWTH, 1947-1986
The supply of labor in the economy is an important influence on
aggregate unemployment. Periods of rapid growth in the labor supply,
other things being equal, will exhibit higher rates of unemployment.
The level of aggregate unemployment in turn strongly affects the ease
with which displaced workers find new jobs, which influences the
duration of unemployment they face and the level of wages associated
Leonard (1986) notes that during a period of rapid growth in the labor force (1979-1982)
in Wisconsin, an average annual rate of decline in employment of less than 1.2 percent
doubled the state's unemployment rate in 3 years, from 5 percent in 1979 to 10 percent in
1982.
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LABOR S UPPL Y AND DEMAND 75
TABLE 3-7 Percentage of U.S. Gross Domestic Product Originating
in Industry Group
Group1948 1957196619731979 1985
Durables17.0 17.818.517.817.2 17.2
Nondurables10.9 10.611.011.511.1 10.8
Mining8.5 8.26.86.35.3 4.7
Construction10.6 12.211.58.07.0 5.8
Transportation9.0 6.45.85.65.6 4.5
Communications1.1 1.41.72.42.9 3.5
Utilities1.6 2.42.83.53.4 3.7
Wholesale trade6.5 6.97.68.68.8 9.6
Retail trade12.4 12.311.812.111.9 12.3
FIRE9.5 10.210.110.911.8 11.3
Services10.7 9.710.511.813.3 15.0
Gov't. enterprises2.3 1.81.81.61.6 1.6
Growth Rates (percent) of Gross Domestic Product Originating in Group
1948- 1957-1966-1973-1979- 1948-1966- 1948
Group1957 1966197319791985 19661985 1985
Durables4.0 4.52.71.92.1 4.32.3 3.2
Nondurables3.2 4.53.91.91.6 3.82.6 3.2
Mining3.2 2.02.1-0.40.1 2.60.7 1.6
Construction5.1 3.5- 1.90.3- 1.3 4.3- 1.0 1.6
Transportation-0.2 2.92.82.6- 1.4 1.31.4 1.4
Communications6.8 6.37.86.05.0 6.56.3 6.4
Utilities8.5 5.86.41.83.5 7.24.0 5.5
Wholesale trade4.1 5.15.13.03.4 4.63.9 4.2
Retail trade3.4 3.63.62.42.6 3.52.9 3.2
FIRE4.4 3.94.43.81.4 4.13.3 3.7
Services2.5 4.94.94.64.0 3.74.5 4.1
Gov't. enterprises0.8 4.11.62.51.7 2.41.9 2.2
Total3.5 4.03.32.52.0 3.82.7 3.2
NOTE: Gross domestic product calculations based on constant 1982 dollars. FIRE =
Finance, insurance, and real estate.
SOURCE: Calculated from U.S. Bureau of Labor Statistics, Office of Productivity and
Technology, unpublished data developed by BLS from Department of Commerce (Bureau
of Economic Analysis national income and product account data and the Federal Reserve)
Index of Industrial Productivity for Durable and Nondurable Manufacturing.
and for the communication services group, which grew from 1.1 to 3.5
percent.
The bottom portion of the table shows the rates of growth in the output of
each of these groups. Two conclusions are obvious. Output growth rates in
most groups were higher during 1948-1966 than during 1966-1985. Slower
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76 TECHNOLOG Y AND EMPLO YMENT
aggregate output growth during 1966-1985, combined with rapid growth
in the labor supply, contributed to higher aggregate unemployment
during this period. The second conclusion concerns the relative rates of
output growth in the manufacturing and nonmanufacturing sectors.
During 1948-1966, the rate of growth of output for manufacturing was
above the economy-wide average; it fell below the average during
1966-1985. Output growth in most nonmanufacturing industries (with the
exception of mining, construction, and transportation), on the other hand,
remained strong after 1966.
Intersectoral differences in productivity growth, combined with
intersectoral differences in output growth, have affected the level of
demand for labor in the manufacturing and nonmanufacturing sectors of
the U.S. economy. Because sectoral employment growth is the difference
between growth in sectoral output and growth in sectoral productivity,
these differences affect the level of labor demand. Within the
nonmanufacturing sector, low productivity growth and rapid output
growth (outside of mining, transportation, and construction) have re-
sulted in a strong demand for labor.
The manufacturing sector, on the other hand, has experienced a
resurgence of productivity growth since 1979 to levels comparable to or
greater than those of the l950s and early 1960s. Slow growth in output,
however, also has characterized this sector since 1979 because of import
penetration of U.S. markets for manufactured goods and the slow growth
or collapse of foreign markets for U.S. manufactured exports. During
1980-1984 alone, Davis (1986) estimated that declines in U.S. merchan-
dise exports resulted in the loss of as many as 1.8 million jobs, many of
which were in manufacturing. According to Davis (1986), "tE]xport-
related jobs accounted for 80 percent of the total 1980-1984 decrease in
manufacturing employment Efrom 20.3 million in 1980 to 19.4 million in
19841" (p. 92~.22 Hight (1986) estimated that increased imports during
1982-1984 cost nearly 800,000 U.S. jobs in mining and manufacturing, 77
percent of which were in 14 (out of a total of 80) manufacturing
industries.23 Growth in demand for the output of U.S. manufacturing from
both domestic and foreign markets supported employment growth during
22Pollock and Almon (1986) also present data suggesting that the negative employment
impacts of increased imports and declining exports during 1980-1985 substantially
exceeded those of technological change in all 35 of the manufacturing industries they
examined.
23Apparel, motor vehicles, computers and office equipment, electronic components,
leather products, radio and television receivers, primary metals, radio and communications
equipment, industrial chemicals, furniture and fixtures, general industrial machinery,
electrical machinery, sawmills and planing, and basic steel.
OCR for page 77
LABOR SUPPL Y AND DEMAND 77
the 1970s, but the collapse of export markets and surging imports
contributed to declines in the rate of growth or reductions in the level of
employment in many manufacturing industries in the 1980s.
Manufacturing's share of U.S. private nonfarm employment has been
declining gradually since 1919. As U.S. Bureau of Labor Statistics (1985a)
figures show, during 1919-1948, this share declined from 44 percent to 40
percent; since 1948, the rate of decline has increased, particularly since
1966. The rate of decline in employment within manufacturing, relative to
the rest of the private nonfarm economy, reached an average annual rate
of 2 percent after 1966 and then increased to 3 percent per year during
1979-1985. Thus, the share of private nonfarm employment accounted for
by manufacturing stood at 36, 28, and 24 percent, respectively, in 1966,
1979, and 1985. Groups registering the most dramatic gains in their shares
of employment since 1966 include wholesale and retail trade, services,
and finance, insurance, and real estate. Despite these declines in its share
of employment, manufacturing had 19.3 million employees in 1985, versus
19.2 million in 1966 (President's Council of Economic Advisers, 1987,
Table B-401. Growth in the nonmanufacturing share of total employment
since 1966 reflects more rapid growth in this sector, rather than absolute
declines in manufacturing employment.
Since 1979 resurgent productivity growth and stagnant output growth
in manufacturing, combined with rapid output growth and stagnant
productivity growth in nonmanufacturing industry, have accelerated
longstanding trends of decline in the manufacturing sector's share of
total employment. What role has domestic technological change played
in these trends? Certainly, the resurgence in productivity growth within
manufacturing must be taken as a partial indicator of improved domestic
technological performance. The reasons for this resurgence, however,
are no better understood than the reasons for the decline in manufac-
turing productivity growth during 1973-1979. Moreover, improved do-
mestic productivity growth during 1979-1985 did not translate into
growth in manufactured exports and employment. In assessing the effect
of productivity growth on employment, we must also consider the
reasons for the decline in manufactured exports and growth in imports
after 1980.
INTERNATIONAL TRADE, TECHNOLOGICAL CHANGE,
AND U.S. EMPLOYMENT
International Trade and Employment
Manufacturing industry is more exposed to international competition
than most other nonagricultural industries by virtue of the internationally
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78 TECHNOLOGY AND EMPLOYMENT
"traceable" character of its outputs.24 Manufactured exports currently
dominate U.S. nonagricultural exports, accounting for nearly $182 billion
in 1984 (nonagricultural merchandise exports) and substantially exceeding
total services exports of $69 billion-$91 billion (President's Council of
Economic Advisers, 1987, Table B-100; U.S. Congress, Office of Tech-
nology Assessment, 1986c).
Exports of manufactured goods also support numerous nonmanufactur-
ing jobs. The U.S. Department of Commerce's International Trade
Administration (1983) estimated that merchandise exports in 1982 (total
ing $211 billion) supported nearly 5 million jobs, of which more than 4
million depended on the export of manufactured goods. Of these 4 million
jobs, slightly more than one-half, or 2.3 million, were located in manu-
facturing; 1.7 million jobs were in the nonmanufacturing sector of the
economy.
During 1979-1985, a number of factors were responsible for reduced
U.S. manufactured exports and increased U.S. imports of manufactured
goods. These influences included the appreciation of the U.S. dollar,
which was associated with the combination of large federal budget deficits
and tight monetary policy that characterized the U.S. economy in the
early 1980s (Fieleke, 19841. Appreciation of the dollar depressed the U.S.
price of imports of foreign goods while increasing the price of U.S.
exports, all of which had a considerable erect on the U.S. trade balance
(Figure 3-4~. Imports increased from $332 billion25 in 1980 to more than
$521 billion in 1986; U.S. exports declined from $389 billion in 1980 to
$371 billion in 1986 (President's Council of Economic Advisers, 1987,
Table B-201. Economic growth also was weak during the early 1980s in
many of the countries that are important U.S. export markets, thereby
reducing the possibilities for increased exports. Furthermore, the under-
lying competitiveness of U.S. manufactured products, which is revealed
in product quality and price/performance characteristics, may have
declined during the past decade, as suggested in a number of studies
(Finan et al., 1986; President's Commission on Industrial Competitive-
ness, 19851; this issue is discussed in greater detail below.
Technological Change and U.S. Exports
U.S. exports since 1945 from the manufacturing and nonmanufacturing
sectors alike have been goods whose production depended on large
Widespread application of information and other computer-based technologies, how-
ever, is gradually changing the extent to which services for example, business, financial,
and communications-can also be traded internationally.
25All figures are in 1982 dollars.
OCR for page 79
LABOR SUPPL Y AND DEMAND 79
~ o
45 lo
~ 11
o CO
C] ~
o -
X ~
-
llJ -
Z ~
160
140
120
100
80
60
-
20
o O
LU ~
Cal CO
Z ~
~ 0
C] o
Hi: -
G m
-
-
-
-
-
Nominal Dollars ~
-20
-40
-60 _
-80 1 1 1 1 1 1 -~
1979 1980 1981 1982 1983 1984 1985 1986
Trade Balance\
-
~O"
YEAR
FIGURE 3-4 Changes in the U.S. trade balance and the value of the dollar, 1979-1986.
SOURCE: President's Council of Economic Advisers (1987).
investments in R&D and on skilled, relatively high-wage labor. Numerous
studies have documented a significant relationship between the high skill
or R&D content of manufactured products and the role of those products
in U.S. exports (see Gruber et al., 1967; Keesing, 1967~. U.S. exports also
are more heavily dependent on it&D-intensive industries than are the
exports of other industrial nations (Organisation for Economic Co-
operation and Development, 1986b). Bartel and Lichtenberg (1987),
among others, argue that this nation has specialized in the export of
manufactured goods embodying advanced technologies, the development
and initial production of which are relatively intensive in their use of
skilled labor and scientific talent (for reasons noted in Chapter 21. U.S.
export-intensive industries are large employers of skilled and professional
labor when compared to all U.S. manufacturing industry (U.S. Congress,
Office of Technology Assessment, 1986b; U.S. International Trade Com-
mission, 19831. The Office of Technology Assessment (1986c) study of
international trade in services corroborates this analysis for the
nonmanufacturing sector; services exports tend to support high-wage,
high-skill employment in comparison to overall U.S. nonmanufacturing
employment.
During the 1960s and 1970s, the manufacturing workers displaced by
OCR for page 80
80 TECHNOLOGY AND EMPLOYMENT
increased imports of foreign goods were employed in relatively low-wage,
low-skill jobs (Aho and Orr, 19811. As other nations continue to develop
their technological and manufacturing capabilities, lower-skill, lower-
wage U.S. manufacturing jobs will continue to be threatened. Moreover,
the nonmanufacturing sector will feel the effects of increased import
penetration as well; workers in that sector who are displaced because of
increased imports are also likely to be employed in relatively low-skill,
low-wage jobs.
A significant difference between the 1980s/1990s and the 1960s/1970s
is that much low-wage foreign competition in manufacturing no longer is
low-productivity competition. In part because of more rapid rates of
technology transfer, as well as increased technological sophistication in
many foreign economies, production and product technologies in some
industries within many low-wage competitor nations now approach or
exceed those of the United States in quality and product sophistication.
This changing international environment is likely to increase the impor-
tance of investments by U.S. firms and public institutions in the skills of
the labor force and in the R&D necessary to generate and adopt
advanced technologies in both the manufacturing and nonmanufacturing
sectors.
The Competitiveness of U.S. Industry
In view of the importance of international trade for U.S. employment
and wages, recent signs of declining U.S. competitiveness are a cause for
concern. International industrial competitiveness-that is, the ability of
U.S. products to preserve or increase their share of international mar-
kets subsumes a number of factors, among them product quality (in-
cluding technological sophistication and design quality), product service,
and price. As we noted in Chapter 1, a great many nontechnological
factors also affect competitiveness, including the rate of domestic savings
and capital formation, other nations' trade and financial policies, and the
exchange rate of U.S. and foreign currencies. Because the appreciation of
the U.S. dollar during 1980-1985 affected the price of U.S. goods in
international trade, regardless of changes in their quality, at least some
part of U.S. industry's competitiveness problems is related to the dollar's
behavior during the first half of the 1980s.
Other evidence, however, suggests that declining competitiveness in
some U.S. manufacturing industries predates the high dollar exchange
rates of 1980-1985. Import penetration in 28 of 40 major U.S. manufac-
turing industries increased during 1972-1982, a decade that spanned a
period of undervalued as well as overvalued U.S. dollars (President's
Commission on Industrial Competitiveness, 19851. In addition, the U.S.
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LABOR SUPPL Y AND DEMAND 81
balance of trade in high-technology products, historically a U.S. export
stronghold, has been deteriorating since the late 1970s; the 1986 balance
of trade in these items yielded a deficit of $2.6 billion (based on
unpublished 1986 data from the U.S. Department of Commerce, Interna-
tional Trade Administration). According to Finan et al. (1986), much of
the deterioration in the U.S. high-technology trade balance reflects a
combination of stagnant exports of U.S. goods and increases of more than
40 percent in imports in some sectors. In response to these trends, U.S.
firms in several high-technology industries, especially electronics, have
moved a larger share of their production to "offshore" locations:
This movement to offshore sourcing has developed especially rapidly with respect
to Hong Kong, Taiwan, Korea, and Singapore what we designate collectively
here as the NICs [newly industrializing countries]. U.S. firms are sourcing
subassemblies from low-labor-cost countries where usually the exchange rate has
moved favorably that is, where the dollar has remained relatively strong. As a
result of U.S. firms' sourcing decisions, the trade balance with the NICs has
deteriorated significantly. (p. 31)
Sanderson (1987) and others (e.g., Cyert, 1985), however, argue that
widespread adoption of new computer-based manufacturing technologies
within U.S. manufacturing, as well as the increasing competitive impor-
tance of shorter product development cycles, may reduce the attractive-
ness of offshore manufacturing for many U.S. firms in the future. The
benefits of offshore manufacturing also should be reduced by declines in
the foreign exchange value of the U.S. dollar from the levels it achieved
in 1984 and 1985.26
Unit Labor Costs in U.S. and Foreign
Manufacturing, 1950-1985
Technological change and productivity growth can accelerate output
growth by enhancing the competitiveness of U.S. industry. As stated in
Chapter 1, because productivity and output growth are linked in an open
economy, growth in productivity within U.S. manufacturing, which
reduces the labor costs of U.S. products, can reduce the price of U.S.
manufactured goods in overseas markets. Reduced prices in turn lead to
Caterpillar, Inc., which manufactures earthmoving equipment, increased offshore
production from 19 percent of total sales in 1982 to 25 percent in 1986; it also increased its
use of foreign sources of parts and components by a factor of four. The declining foreign
exchange rate of the U.S. dollar sharply reduced the profitability of this strategy and
contributed to the firm's loss of $148 million in the fourth quarter of 1986 (The Economist,
April 4, 1987).
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82 TECHNOLOGY AND EMPLOYMENT
expanded U.S. exports of manufactured goods and reductions in U.S.
imports. Conversely, if technological change and productivity growth in
U.S. manufacturing industry fall sufficiently behind those of our trading
partners, markets for U.S. products will shrink. Nevertheless, the higher
productivity growth in U.S. manufacturing after 1979 largely failed to
improve, and occurred simultaneously with dramatic declines in, U.S.
trade performance. This section examines one explanation for the dis-
junction of U.S. productivity and trade performance after 1980.
Table 3-8 summarizes the price dimensions of international competi-
tiveness and the contributions of productivity growth to the price com-
petitiveness of U.S. manufacturing. The table shows changes in unit labor
costs for the manufacturing sectors of other industrial nations relative to
those of the United States. Unit labor costs measure the labor cost per
unit of output of manufacturing industry; they grow with increases in the
nominal wage of manufacturing labor. Productivity growth offsets the
effect of wage increases on unit labor costs as unit labor requirements
decline, so will unit labor costs. If wage increases are comparable to
growth in labor productivity and if exchange rates remain constant, unit
labor costs will be unchanged.
The top panel of Table 3-8 shows the changes in foreign unit labor costs
(measured in U.S. dollars) relative to U.S. unit labor costs for five
intervals during 1950-1985; entries in the top panel are the sum of the
entries in the three lower panels of the table. Negative entries indicate
reductions in foreign unit labor costs relative to those of the United
States. Because these costs are measured in U. S . dollars, they are
affected by exchange rate movements as well as by movements in wages
and labor productivity. Since 1979 unit labor costs in all of these foreign
industrial nations except Canada have declined relative to those of the
United States, the first period during which this has occurred since
1950-1957. As a result, the ability of U.S. manufacturing to compete in
world markets declined significantly during 1979-1985, despite significant
productivity growth in U.S. industry.
Technological change, which affects labor productivity growth, played
a major role in the behavior of unit labor costs during this period. The
second panel from the top in Table 3-8 shows foreign labor productivity
growth rates relative to those of the United States. Negative entries
indicate more rapid productivity growth in other nations' manufacturing
industry; the table clearly shows that U.S. productivity growth has lagged
behind that of other industrial nations throughout the postwar period. The
1979-1985 data, however, suggest that during this most recent period,
U.S. labor productivity growth rates approached those of most industrial
nations (with the exception of Japan). The relative productivity perform-
ance of U.S. manufacturing obviously improved during 1979-1985 to an
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LABOR SUPPLY AND DEMAND 83
TABLE 3-8 International Comparisons of Unit Labor Costs,
Productivity, and Compensation in Manufacturing in
Selected Industrial Nations
Annual Growth Rate of Foreign Unit Labor Costs (in U.S. dollars),
Relative to the United States
Country1950-19571957-19661966-19731973-19791979-1985
.
West Germany-2.03.06.93.3-8.9
France-0.60.02.13.2-8.2
Italy-2.81.95.01.8-6.1
ˇ Japan-3.81.75.32.5-6.1
ˇU.K.2.01.9-0.27.0-5.4
Canada1.2- 1.80.2- 1.00.2
Annual Growth Rate of U.S. Productivity (output per hour), Relative
to Foreign Manufacturing
West Germany-4.8-3.3-3.0-2.8-0.2
France-2.2-3.2-3.6-3.5-0.9
Italy-3.6-3.6-4.1- 1.9-0.8
Japan-7.5-5.2-8.3-4.0-2.5
U.K 0.8 -0.5 -2.2 -0.2 -0.9
Canada - 1.4 - 1.3 -2.2 -0.8 1.4
.
Annual Growth Rate of Foreign Hourly Compensation (in domestic
currency), Relative to the United States
Lest Germany 2.7 5.8 4.1 0.0 -0.8
France 4.3 5.0 4.2 6.0 5.2
. Italy -0.7 5.6 8.1 9.7 8.5
Japan 3.8 7.0 9.5 3.0 -2.2
U.K. 1.2 2.5 3.9 9.7 3.7
Canada 0.8 0.8 1.3 2.5 1.4
Annual Growth Rate of the Foreign Exchange Rate, Relative to the
U.S. Dollar
West Germany 0.0 0.5 5.9 6.2 -7.9
France -2.6 - 1.7 1.5 0.7 - 12.5
Italy 0.0 0.0 1.0 -6.0 - 13.9
Japan 0.0 -0.1 4.2 3.6 - 1.5
U.K. 0.0 0.0 - 1.9 -2.4 -8.2
(Canada 1.9 - 1.3 1.1 -2.6 -2.6
SOURCE: U.S. Bureau of Labor Statistics (1986c).
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84 TECHNOLOGY AND EMPLOYMENT
unprecedented extent. Moreover, measured in terms of their domestic
currencies, hourly compensation for foreign manufacturing workers (the
third panel from the top of Table 3-8) consistently has grown more rapidly
than compensation for U.S. manufacturing workers. Prior to 1979, the
impact of more rapid growth in labor costs on the competitiveness of
these nations' manufactured exports was offset by productivity growth
rates that also exceeded those of U.S. industry. During 1979-1985,
however, increases in foreign worker compensation continued to exceed
those of U.S. manufacturing workers, while the productivity gap between
U.S. and foreign manufacturing narrowed. Yet, the growth of U.S. unit
labor costs remained well above that of other industrial nations. Why?
The answer to this question is contained in the bottom panel of Table
3-8. Upward movement in the foreign exchange rate of the U.S. dollar
during 1979-1985 more than offset declines in U.S. labor costs. The
bottom panel of Table 3-8 shows that foreign unit labor costs (expressed
in U.S. dollars) have declined, and this decline offset the effects of low
growth in U.S. manufacturing compensation and high growth in U.S.
manufacturing productivity.
Had the dollar not appreciated against foreign currencies during
1979-1985, U.S. unit labor costs would have declined relative to those of
all of the industrial nations in Table 3-8 with the exceptions of West
Germany and Japan. Even relative to these nations with higher produc-
tivity growth rates, the increase in U.S. unit labor costs would have been
far smaller, thus making U.S. exports more competitive in world markets,
reducing import penetration of U.S. markets, and reducing the incentives
for U.S. firms to locate their production facilities onshore (Finan et al.,
1986; Kravis and Lipsey, 19861. Indeed, in the absence of the surge in the
foreign exchange rate of the U.S. dollar, U.S. employment growth during
the past 7 years might have exhibited a rather different pattern, as
productivity gains in U.S. manufacturing supported increases in exports
and higher output growth, both of which could have led to growth or
slower declines in manufacturing employment.27
2'Data on changes in foreign hourly compensation and labor productivity trends through
1986 are not yet available to bring this comparative analysis of unit labor costs up to the end
of 1986. Neef (1986) noted in his study that the decline in the foreign exchange value of the
dollar from its peak in 1985 through October 1986 had not yet brought the dollar to its 1980
value vis-a-vis the currencies of Western European nations, although substantial deprecia-
tion had occurred against the Japanese yen. Moreover, the dollar's depreciation against
many Latin American and East Asian currencies was minimal. The U.S. dollar also had not
depreciated against the Canadian dollar, which accounted for 25 percent of U.S. manufac-
tured exports. The declines in the foreign exchange value of the dollar since October 1986
are likely to reduce some but not all of the disparities that developed during 1980-1985 in
U.S. and foreign nations' unit labor costs.
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LABOR SUPPL Y AND DEMAND 85
SUMMARY
This chapter has examined the determinants of labor supply and
demand by focusing on the role technology plays in influencing aggregate
employment and unemployment levels. The increase in aggregate unem-
ployment since 1973, as well as the large number of experienced workers
suffering permanent job losses in recent years, is disturbing. The direct
contribution of technological change to these trends appears to be minor.
As the growth rate of the labor supply declines during the next decade, at
least one source of upward pressure on aggregate unemployment should
diminish.
Differential rates of productivity growth in manufacturing and
nonmanufacturing industry, combined with low rates of growth in the
output of manufacturing industry, have contributed to higher rates of
decline in manufacturing's share of total. employment during 1979-1985.
The decline in manufacturing's share of nonfarm employment does not
represent a departure from longstanding patterns of economic growth and
development in the United States, but the rate of decline has accelerated
during the past 15 years.
.
.
Changes in the international economic environment during 1980-1985
have exacerbated and accelerated the reductions in manufacturing's share
of total employment. The declines in the foreign exchange value of the
dollar since late 1985 should improve the competitiveness of U.S.
industry vis-a-vis a number of foreign competitors. Nonetheless, relying
solely on this policy option to restore U.S. competitiveness will require
severe (and in the view of this panel, unacceptable) declines in the
purchasing power of U.S. workers and consumers. Technological change
and productivity growth remain indispensable to the improvement of U.S.
industrial competitiveness and real wages. In view of the fact that U.S.
involvement in the international economy is likely to expand still further
in the near future, the rapid generation and adoption of new technologies
are essential to preserving and expanding U.S. employment and living
standards during the next two decades.
Representative terms from entire chapter:
productivity growth
