The American workforce has changed dramatically in the past 50 years, though for many, wages have remained the same or even shrunk.

Union participation has declined steeply alongside a decrease in employee benefits and retirement packages. The educational requirements for many jobs have increased, while other segments of the market have disappeared entirely, like video rental stores and phone directory printing.

Understanding the shifts and trends of this new emerging workforce can be helpful in planning for the future and adjusting expectations.

A Slower Generational Shift

While it may seem natural that the labor force is becoming younger, as the oldest generation (the Baby Boomers) continue to exit the workplace, the change is not happening nearly as swiftly as previously expected.

This is for two reasons.

First, Americans are working later into life and fewer young Americans are joining the workforce immediately after high school. Every “tid-bit” of data on the labor force can be found via the Bureau of Labor Statistics, but in short, this slow passing of the torch is likely occurring because older Americans are living longer and healthier in their senior years (thanks to advances in medical science) and are struggling financially to be able to safely retire.

Meanwhile, more young adults are living at home, up to the age of 25, than in prior generations. These young Americans are also more likely to go directly into college and graduate programs immediately after high school, delaying their entry into the workforce.

Increasingly Diverse

Since 1970, the number of American women working has nearly doubled! This is probably the most stark change in the increasingly diverse labor pool, but it is certainly not the only one.

Nearly one-fifth of all American jobs are now held by foreign-born workers. From 1980 to 2020, the total of non-Hispanic white employees in the workforce dropped from 82% to 62%.

This slow decline is expected to continue. BLS currently predicts this percentage may be as low as 53% by 2050.

A New Type of Work

Jobs that rely heavily on manual or repetitive labor, such as poultry factories and construction, have seen a sharp decline in recent years.

Many of these positions have been replaced through automation, where robots and streamlined processes make them obsolete. Of those jobs that do remain, deemed “jobs Americans don’t want”, the majority are currently filled by migrant workers and immigrants.

With the rise of the gig economy, freelance and contract work has seen a drastic increase in the last two decades. Companies like Uber and GrubHub have made these types of jobs, that the Pew Research Center refers to as “alternative working arrangements”, readily available to most of the population.

Other self-employment options, such as selling wares on Etsy, renting space via Airbnb, or streaming video content on Twitch, have also become more popular and viable in recent years, ushering in a wave of mini-entrepreneurs that are not straddled to a typical “9 to 5”.

These alternate forms of income, however, suffer from a lack of health insurance, retirement savings, and other benefits – a problem that has become increasingly common in the traditional workplace as well.

Education and Experience Requirements have Increased

The percentage of job postings in the market that call for a high level of “job preparation” has also steadily increased. This refers to positions that require prior experience, higher levels of education, or vocational training for consideration.

Unsurprisingly, then, having a high school diploma has become a sort of bare minimum for entry into the workforce. Currently, as little as 7% of American workers hold less than a high school diploma and “some college” has now become the largest segment of the labor pool.

Soft Skills are Essential Skills

Over the past few decades, while manual labor and manufacturing jobs have waned, the segment of the economy that has continued to grow rapidly is the service sector. This includes not only food services and hospitality, but also education, healthcare, and professional services.

As such, social and analytic skills have become increasingly important. Strong communication skills, both written and verbal, are pivotal to success in these career fields.

Conclusion

A current assessment of the American labor market feels rather bleak: Americans now work more hours for less pay and fewer employee benefits at jobs that have higher entry requirements and fewer feasible options for a realistic retirement.

Long gone are the days of “company loyalty”, where a Springfield father of three would work at the same power plant for 35 years, but that went away with pensions and affordable family health insurance.

However, innovation and change are always right around the corner. The only thing that remains certain is that the American labor pool, like the job market and economy, is changing.