As the population grows, so does the labor force. The labor force includes most people aged 16 or over who are available for work, whether employed or unemployed. Of course, many of the people in the labor force may be available for work but are not actively seeking employment, such as students and full-time
homemakers. In a recent year, the Bureau of Labor Statistics reported that the size of the American labor force was almost 140 million. Figure 2-2 shows the growth of the labor force.
The labor participation rate is the percentage of the labor force that is either employed or actively seeking employment. In the last three decades, the labor participation rate increased primarily because many more women took jobs outside the home. In 1975, around 46 percent of women worked outside the home.
By 2005, the figure had risen to nearly 60 percent. Some reasons for the increase are that women have been choosing not to marry, to delay marriage, or to marry and pursue careers before or while raising children. Figure 2-3 shows the trend in the labor participation rates for males and females. The expansion of the economy through much of the 1990s coaxed many people, such as retirees, people with disabilities, and homemakers, to enter the labor force.
The growth of the economy, changes in the population and where people live, and technological advances have created a variety of new jobs. One of the great strengths of the American economy has been its ability to create new jobs. Most new jobs are in the service industries, such as computer programming, banking
and insurance, leisure, food services, and health care. The growing use of computers has created a large number of technical jobs in areas such as computer applications and programming. The Internet has influenced how firms conduct business, and e-commerce is rapidly emerging as a new way to sell and buy goods and services. The rapid growth in the computer industry has led to a shortage of qualified workers and, in turn, has led to high wages for those with the necessary education and skills. To meet the demand for such high-tech workers, the government allows firms to hire workers from foreign countries.
Many of the new jobs require more skills, which means workers have to be educated. As a result, more people are going to college or acquiring training in new skills. As technology changes and old jobs disappear, many
workers need retraining. At the same time, technology has simplified
jobs, such as shortorder cook or bank teller. These jobs now require
little training and therefore pay low wages. Some jobs, such as
telephone operator, have been eliminated since the work has been
automated. A large number of workers are in dead-end jobs and are not
earning an adequate income to maintain a reasonable standard of living.
For various reasons, including lack of financial resources, public schools in many areas are failing to provide the quality of education historically expected of high school graduates. High school graduates are particularly deficient in math, computer, social, and communication skills. Businesses are sometimes forced to provide remedial education in basic skills for newly hired workers.
