The Skill (Education) Distribution of Jobs: How Is It Changing?

Order Code 97-764 E

CRS Report for Congress

Received through the CRS Web

The Skill (Education) Distribution of Jobs: How

Is It Changing?

Updated June 5, 2000

Linda Levine

Specialist in Labor Economics

Domestic Social Policy Division

Congressional Research Service ˜ The Library of Congress

The Skill (Education) Distribution of Jobs: How Is It

Changing?

Summary

About 3 out of 5 jobs projected to be created through 2008 could have relatively

high skill requirements (i.e., typically requiring some postsecondary education). This

leaves 8.1 million new jobs for workers with relatively low skill levels (i.e., typically

high school graduates). Thus, firms are expected to continue to need workers from

a variety of educational backgrounds to fill those jobs that will be added to the labor

market by economic growth during the first decade of the 21st century.

Through 2008, the most skilled jobs (i.e., typically requiring a bachelor’s degree)

could experience the largest percent increase in employer demand. Employment also

will likely expand, but at much slower rates, among jobs with lesser skill requirements.

Despite the differences in rates of new job creation, the skill distribution of

employment is expected to look much the same: about one-half of all jobs typically

requiring at least some postsecondary education and about one-half typically

requiring no more than high school completion. This stability reflects the fact that

the projected addition of 20.3 million jobs to the labor market through 2008

represents a small increment to 1998's sizable employment base of 141 million.

Employers need workers not only to fill new jobs, but also to fill existing jobs

that become vacant as workers move into other occupations, retire or otherwise leave

the labor force. “Replacement needs” are an important source of job openings,

particularly in slowly expanding or contracting fields. For example, 3.3 million of the

least skilled jobs might be added to the labor market between 1998 and 2008, but 14.1

million new and existing low-skilled jobs might become available over the projection

period. The difference reflects the jobs of departing employees that firms will need

to fill. While the lowest skilled workers would be qualified to compete for just 16%

of the 20.3 million new jobs projected to be created through 2008, they have the

educational level to compete for 26% of the 55.0 million new and existing jobs

expected to open up over the 10-year period. Thus, a focus on job growth alone

provides an incomplete picture of employers’ skill requirements and a misleading

impression of the job market faced by low-skilled workers.

Oftentimes, members of the education and training community have focused on

those occupations expected to grow the most rapidly to urge students to obtain a

bachelor’s degree or, at the least, get postsecondary education that leads to an

associate’s degree or vocational certificate. This analysis demonstrates that jobs will

continue to be there in abundant numbers for workers with no more than a high

school education, that is, the report addresses the employment prospects of relatively

low-skilled workers. In terms of wage prospects, however, firms have been paying

a much larger premium than in the past to employees with bachelor’s degrees. The

current size of the wage gap between more and less educated workers suggests that

there is something in addition to the barely perceptible shift toward heightened job

skill requirements (as measured by educational attainment) that has prompted

employers to increasingly favor workers with a 4-year college degree over other

workers.

Contents

A Skill Hierarchy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

A Caveat . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

The Hierarchy’s Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Projected Job Growth by Skill Level . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Highest Skilled Category . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Moderately High-Skilled Category . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

The Two Lower-Skilled Categories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Contracting Job Opportunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Expanding Job Opportunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Changes in the Share and Number of Jobs by Skill Level . . . . . . . . . . . . . . . . . 10

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

List of Tables

Table 1. Skill Hierarchy based on the Distribution of Educational Attainment by

Occupational Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Table 2. Actual and Projected Employment by Occupational Skill Cluster, 1998 and

2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Table 3. Distribution of Employment, 1998 and 2008 . . . . . . . . . . . . . . . . . . . 11

Table 4. Job Growth and Total Job Openings by Skill Cluster, 1998-2000 . . . 12

Appendix Table. Job Growth and Total Job Openings by Occupations Within the

Skill Clusters, 1998-2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

The Skill (Education) Distribution of Jobs: How

Is It Changing?

One of the prominent questions in the late 1980s was whether workers would

be available in sufficient numbers to meet the seemingly heightened job skill

requirements of employers. With the unemployment rate in the 1988-1990 period

averaging below 6% annually, the specter was raised of a labor shortage generally.

Simultaneously, concern was expressed about the build-up of an excess supply of lowskilled workers relative to their reportedly dwindling job opportunities over the years.1

After an initially slow rebound from the 1990-1991 recession, the unemployment

rate fell below 5% in 1997 and has remained at that level for the past few years. As

a consequence, the Federal Reserve Board has been concerned that an overall

shortage of workers could brake the long-running economic expansion by preventing

firms from continuing to fulfill the demand for goods and services in a low-inflation

environment.2 At the same time, the focus of Congress has been on whether there are

enough workers at the high and the low end of the skill spectrum to meet employers’

demand for labor (e.g., information technology and farm workers, respectively).3

Nonetheless, the perception of limited job options for low-skilled workers has

continued to command attention (albeit muted). The cautionary remarks of several

policy analysts that welfare recipients would be unable to meet the work requirements

in reform legislation enacted in 1996 have given way today to fear that, once the

economy sputters, these individuals will be the first to be laid off and will then face

1

See, for example, Johnston, William B., and Arnold B. Packer. Workforce 2000: Work and

Workers for the Twenty-first Century. Washington, D.C., U.S. Govt. Print. Off., 1987.;

Commission on Workforce Quality and Labor Market Efficiency. Investing in People: A

Strategy to Address America’s Workforce Crisis, volumes I and II. Washington, D.C., U.S.

Govt. Print. Off., 1989; and, Commission on the Skills of the American Workforce.

America’s Choice: High Skills or Low Wages. Rochester, NY, National Center on

Education and Economy, 1990. Note: In a sequel to Workforce 2000 (Judy, Richard W. and

Carol D’Amico. Workforce 2020: Work and Workers in the 21st Century. Indianapolis,

Indiana, Hudson Institute, 1997), the authors acknowledged that low-skilled jobs are not

actually going to disappear because of the distinction between new jobs and existing jobs

which open up as employees retire or leave their positions for other reasons. Worforce 2000

largely focused on new job growth. This important distinction will be discussed later in this

CRS report.

2

CRS Report RL30283, The Unemployment Rate and the Potential Supply of Labor, by

Linda Levine.

3

For more information see CRS Report RL30140, An Information Technology Labor

Shortage? Legislation in the 106th Congress, and CRS Report RL30395, Farm Labor

Shortages and Immigration Policy, both by Linda Levine.

CRS-2

few choices for reemployment due to their typically brief work experience and low

skill levels. Others in the public policy community have continued to debate whether

the influx of immigrants with little schooling has exacerbated low-skilled native-born

workers’ already poor employment and wage options.4

Those who believe there is an ongoing mismatch between the skill composition

of the workforce and the skill requirements of jobs have urged individuals to obtain

additional education or training to improve their chance of succeeding in the labor

market.5 For example, some Members of Congress have endorsed assisting students

and workers in this endeavor through education tax credits and deductions or through

increased funding of Pell grants and the Workforce Investment Act. Federal

appropriations and income tax credits also have focused on providing training or work

experience to welfare recipients, among others, with poor job prospects due to

presumably low skill levels.6 In addition, some have advocated the adoption of a

more labor-market-oriented approach to immigration that would curtail the admission

of persons having limited formal education to reduce competition with less skilled

native-born workers.

This report examines whether employers have been increasing their demand for

high-skilled workers and, at the same time, decreasing their demand for low-skilled

workers. It does this by analyzing projected rates of occupational employment

growth by education level between 1998 and 2008. The report determines whether

the emerging pattern of job growth is likely to have much of an effect on the overall

skill distribution of employment and on the number of jobs available to less skilled

workers. It also distinguishes between jobs that are added to the labor market

through economic growth (i.e., new jobs) and positions that become available to

jobseekers due to occupational turnover (i.e., filling vacancies in existing jobs).

A Skill Hierarchy

Statistics are regularly collected on the educational distribution of workers

employed in different occupations. Educational attainment by occupational group can

serve as a rough approximation of a job’s skill level. The Congressional Research

Service (CRS) developed the skill hierarchy shown below from the distribution of

4

For more information see CRS Report 95-408, Immigration: The Effects on Native-Born

Workers, by Linda Levine; and CRS Report 95-1210, Immigrant Skills: Trends and Policy

Issues, by Ruth Ellen Wasem and Linda Levine.

5

Indicators of success in the labor market include an individual experiencing relatively little

unemployment or relatively high wages. Generally, workers with more schooling are less

likely to become unemployed and are more likely to have higher earnings. See, for example,

CRS Report 95-1081, Education Matters: Earnings by Highest Year of Schooling

Completed, by Linda Levine. (Hereafter cited as CRS Report 95-1081, Education Matters.)

6

CRS Report RS20134, Welfare Reform: Welfare-to-Work Legislation in the 106th

Congress, by Christine Devere, and CRS Report RL30089, Employment Tax Credits

Expiring during the 106th Congress, by Linda Levine.

CRS-3

educational attainment by occupational group of employed persons aged 16 or older

according to the March 1999 Current Population Survey (CPS).

A Caveat

A major caveat that readers should keep in mind while they proceed through this

report is that educational attainment was the sole criterion for slotting occupational

groups in the hierarchy. However, employees often develop skills through formal onthe-job training programs (e.g., attending on-site classes) or through informal

instruction (e.g., learning by watching others) rather than through additional years of

formal education. For example, workers in some blue-collar occupations in the

construction trades (e.g., heavy equipment operators and electricians) may participate

in apprenticeships and workers whose jobs now commonly require computer skills

(e.g., professional and administrative support employees) may participate in employerprovided training to use word-processing or spreadsheet software. The allocation of

occupations to the hierarchy does not reflect job skills acquired outside of school

settings because of scanty data on employer-provided training.7

The Hierarchy’s Structure

The four skill levels of the hierarchy are based on the following educational

distributions by occupational group.

A near majority (at least 46%) of workers in the occupations that

make up the highest skilled group had earned a bachelor’s or higher

degree.

! A majority of workers in the occupations that comprise the

moderately high-skilled cluster had some postsecondary education.

! A majority of workers in the two lower skilled groups had at most

completed high school.

a) In the moderately low-skilled cluster, a substantial portion

(about 40%) of workers had not gone beyond high school.

b) In contrast, many workers in the lowest skilled cluster had

not attended high school (e.g., 25% of farmworkers, 19% of

private household workers and 13% of cleaning service workers

did not go beyond elementary school).

!

See Table 1.

7

For more information see CRS Report RL30546, Employer-Provided Training, by Linda

Levine.

CRS-4

Table 1. Skill Hierarchy based on the Distribution of Educational

Attainment by Occupational Group

Educational

attainment

Highest

Occupational composition

Executive, administrative and managerial workers

Professional specialty workers

Technicians/technologists excluding heath, engineering and science

(e.g., computer programmers, legal assistants, and aircraft pilots)

Financial and business services, insurance and related sales agents

Moderately

high

Health, engineering and science technicians/technologists (e.g., licensed

practical nurses and electrical/electronic technicians)

Marketing and sales worker supervisors

Administrative support workers, including clerical

Protective service workers (e.g., guards, police, and firefighters)

Moderately

low

Personal service workers (e.g., child care workers, personal care and

home health aides, and hairstylists and cosmetologists)

Health service workers (e.g., nursing aides, orderlies and attendants)

All other service workers not elsewhere classified

Precision production, craft and repair workers (e.g., carpenters,

electricians, auto mechanics, and machinists)

Farmers and farm managers

Lowest

Retail sales persons, cashiers, counter clerks and other sales workers

not elsewhere classified

Private household workers (e.g., cleaners and child care workers)

Food preparation and service workers (e.g., cooks and waitresses)

Cleaning and building service workers, except private household

Operators, fabricators and laborers (e.g., sewing machine and

packaging/filling machine operators, welders, truck drivers, and hand

packers/packagers)

Farmworkers and related agricultural workers (e.g., landscaping and

groundskeeping laborers)

Forestry, fishing and related workers (e.g., veterinary assistants and

nonfarm animal caretakers, fishers, and timber cutters)

CRS-5

Projected Job Growth by Skill Level

Forty-one percent (8.3 million) of the 20.3 million jobs the U.S. Bureau of Labor

Statistics’ (BLS) estimates will be added to the labor market over the 1998-2008

projection period could be in the highest skilled cluster of occupations.8 Another onefifth (4.0 million) of new jobs could fall in the moderately high-skilled category.

Taken together, then, jobs requiring a fairly high skill level could account for 3 out

of every 5 new jobs created between 1998 and 2008. (See Table 2, columns 4 and

6.)

Almost one-fourth (4.7 million) of jobs resulting from economic growth over the

10-year projection period could lie in the moderately low-skilled cluster of

occupations. Another 16% (3.3 million) of new jobs could be added to the lowest

skilled category. Thus, employers are expected to continue to need workers from a

variety of educational backgrounds for the new jobs created during the first decade

of the 21st century.

Highest Skilled Category

The most rapid growth (22%) among the four categories in the hierarchy is

expected to occur in the highest skilled occupations. All of the occupational groups

that make up the highest skilled cluster are projected to grow at above the average

rate (14%). Within the highest skilled cluster, professional and technical (excluding

health and engineering/science) jobs could experience the relatively largest expansion

(27%) over the projection period. (See Table 2, column 5.)

Regardless of skill category, computer-related professional positions are

estimated to be the fastest growing (i.e., computer engineers, 108%; computer

support specialists, 102%; systems analysts, 94%; and database administrators, 77%).

Except for database administrators, these also are among the occupations projected

to post the largest absolute increases in employment (i.e., systems analysts, 577,000;

computer support specialists, 439,000; and computer engineers, 323,0000).9

In the technicians (excluding health and engineering/science) group, paralegal

and legal assistants (62%) and computer programmers (30%) are projected to grow

at well above the all-occupations’ average rate (14%). It is anticipated that computer

programmers also will be among those occupations reporting the greatest absolute job

growth (191,000) between 1998 and 2008.10

8

The U.S. Bureau of Labor Statistics developed the projections. CRS used the skill hierarchy

it developed to group employment by occupation in 1998 and 2008.

9

Braddock, Douglas. Occupational Employment Projections to 2008. Monthly Labor

Review, November 1999. (Hereafter cited as Braddock, Occupational Employment

Projections to 2008.)

10

Braddock, Occupational Employment Projections to 2008.

CRS-6

Table 2. Actual and Projected Employment by Occupational Skill Cluster, 1998 and 2008

%

Distribution

of

employment

change

Employment (000)

Employment change

1998

2008

Number

(000)

%

Total, all occupations

140,514

160,795

20,281

14

100

High-skilled occupations

36,840

45,098

8,258

22

41

Executive, administrative, and managerial workers

14,770

17,196

2,426

16

12

Professional specialty workers

19,802

25,145

5,343

27

26

Technicians, excluding health and engineering and science

1,152

1,460

308

27

2

Financial and business services, insurance, and related sales workers

1,116

1,297

181

16

1

Moderately high-skilled occupations

33,612

37,580

3,969

12

20

Health technicians and technologists

2,447

3,063

616

25

3

Engineering and science technicians and technologists

1,351

1,525

175

13

1

Marketing and sales worker supervisors

2,584

2,847

263

10

1

Administrative support, including clerical workers

24,461

26,659

2,198

9

11

Protective service workers

2,769

3,486

717

26

4

Moderately low-skilled occupations

35,235

39,965

4,731

13

23

Retail sales persons, cashiers, and sales workers not elsewhere classified

11,641

13,483

1,842

16

9

Health service workers

2,309

2,984

676

29

3

Personal service workers

2,934

3,828

894

31

4

All other service workers not elsewhere classified

1,249

1,490

241

19

1

Precision production, craft and repair occupations

15,619

16,871

1,252

8

6

Farm operators and managers

1,483

1,309

-174

-12

-1

Occupational skill cluster

CRS-7

%

Distribution

of

employment

change

Employment (000)

Employment change

1998

2008

Number

(000)

%

34,826

38,151

3,324

10

16

928

751

-178

-19

-1

Food preparation and service workers

8,735

9,831

1,096

13

5

Cleaning and building service workers, excluding private household

3,623

4,031

408

11

2

Operators, fabricators and laborers

18,588

20,341

1,753

9

9

Farmworkers, forestry and fishing workers, and related workers

excluding farmers and managers

2,952

3,197

245

8

1

Occupational skill cluster

Low-skilled occupations

Private household workers

Source: Created by the Congressional Research Service from U.S. Bureau of Labor Statistics’ data.

Note: Numbers may not add to totals due to rounding.

CRS-8

Moderately High-Skilled Category

Job creation in the moderately high-skilled cluster could be slightly below the

average rate (i.e., 12% versus 14%), in large part because of its inclusion of the

administrative support group. The continuing dissemination of technological

innovations appears to be primarily responsible for the slow job growth (9%) in

numerous administrative support occupations. Nonetheless, administrative support

is expected to remain the largest occupational category — although in 2008, its lead

over the professional group could narrow considerably (to 1.5 million jobs). (See

Table 2, columns 3 and 5.)

Office automation resulting in productivity improvements as well as managers’

and professionals’ now common use of computer software is expected to mean fewer

jobs for typists and word processors in 2008 (down by 93,000 or 20%). The

spreading application of office automation also is expected to reduce the demand for

labor in financial records processing occupations such as bookkeeping, accounting

and auditing clerks (-81,000 or -4%) as well as for bank tellers (-31,000 or -5%). In

addition, BLS projects that the need for computer operators will decline by 64,000

or 26% as automation reaches the “computer room” itself (e.g., programs and robots

that allow computers to perform routine tasks once handled by people) and as firms

move away from the large mainframes that these employees operate. Continuing

technological change and organizational restructuring (e.g., mergers) in the

telecommunications industry could cut employment of telephone operators by 41,000

or 16%, as well.11

The inclusion in the moderately high-skilled cluster of health technicians and

technologists (e.g., medical records technicians and surgical technologists) and of

protective service workers (e.g., correctional offices and police) offsets the relatively

slow pace of job growth in administrative support occupations between 1998 and

2008. However, the above-average increases in employment projected for health

technicians/technologists (25%) and for protective service workers (26%) could

account for just 3% and 4%, respectively, of all new jobs created over the period

because of the occupational groups’ small employment bases. In contrast, despite the

slow employment growth projected for administrative support jobs, they could expand

by 2.2 million and account for 11% of all jobs added to the labor market due to the

occupational group’s large employment base. (See Table 2, columns 4 and 5.)

The Two Lower-Skilled Categories

The heterogenous composition of the two lowest skilled clusters also has an

impact on their anticipated growth rates of 13% for the moderately low-skilled group

and of 10% for the lowest skilled group. The inclusion of farming occupations and

of blue-collar occupations (i.e., precision production, craft and repair workers; and

operators, fabricators and laborers) is expected to dampen the two skill categories’

rates of expansion. Conversely, the inclusion of service and retail occupations shores

up the projected pace of employment gains in the two lower skilled groups. (See

Table 2, column 5.)

11

Braddock, Occupational Employment Projections to 2008.

CRS-9

Contracting Job Opportunities. Reflecting the continuing employment decline

in the agricultural sector of the economy,12 farmers (classified in the moderately lowskilled group) and farmworkers (classified in the lowest skilled group) are projected

to be among the occupations experiencing the largest absolute decreases (down

173,000 jobs or 13% and 57,000 jobs or 7%, respectively).13

Similarly, cutbacks at sewing and textile manufacturers14 are expected to largely

account for the dwindling prospects of workers in some blue-collar occupations.

Within the lowest skilled category, for example, sewing machine operators in the

garment trade could experience a 112,000 job loss (or 30% reduction) and

operators/tenders of certain textile machines, a 50,000 job loss (or 26% reduction).15

Growing reliance on computer-controlled technology appears to explain more of the

projected employment declines among other blue-collar occupations. In the

moderately low-skilled group, the number of positions for precision inspectors, testers

and graders could fall by 22,000 or 3% for example. Blue-collar jobs in the

printing/publishing industry also could suffer employment contractions associated with

computer technologies: in the lowest skilled group, offset lithographic press

operators could lose 9,000 jobs (a 15% cutback) and typesetting/composing machine

operators/tenders, 8,000 jobs (a 60% cutback); in the moderately low-skilled group,

the number of printing film strippers could drop by 8,000 or 33%.16

Despite these and other absolute decreases in some blue-collar fields, total

employment of blue-collar workers is projected to grow — by 8% for precision

production, craft and repair occupations in the moderately low-skilled group; and by

9% for operators, fabricators and laborers in the lowest skilled group. Given the

substantial numbers of blue-collar jobs currently in existence, these relatively low

growth rates could add 3.0 million jobs and account for 15% of all new jobs created

between 1998 and 2008. (See Table 2, columns 4, 5 and 6.)

In contrast, the experience of private household workers is expected to be more

like that of farmers and farmworkers, and less like that of other service workers (see

below). In other words, employment in the private household occupational group is

expected to continue its downward trajectory. Both child care workers and

cleaners/servants who work in private homes are among the occupations that could

12

Employment in the agricultural industry is projected to fall by 377,000 jobs between 1998

and 2008, following a decline of 186,000 between 1988 and 1998. Thomson, Allison.

Industry Output and Employment Projections to 2008. Monthly Labor Review, November

1999. (Hereafter cited as Allison, Industry Output and Employment Projections to 2008.)

13

Braddock, Occupational Employment Projections to 2008.

14

Employment in the apparel industry is projected to decrease by 197,000 jobs between 1998

and 2008, following a loss of 341,000 between 1988 and 1998. Employment in the textile

mill products industry could fall by 97,000 over the 1998-2008 projection period in addition

to a 130,000 job cutback recorded in the prior 10 years. Allison, Industry Output and

Employment Projections to 2008.

15

Braddock, Occupational Employment Projections to 2008.

16

Ibid.

CRS-10

incur the heaviest job losses through 2008 (97,000 or 32% and 71,000 or 12%,

respectively).17

Expanding Job Opportunities. The aging of the population likely contributes

to the robust job gains projected for health and personal service occupations in the

moderately low-skilled cluster. The number of medical assistants could increase by

58% (or 146,000), physical therapy assistants/aides by 44% (or 36,000), dental

assistants by 42% (or 97,000) and nursing aides/orderlies/attendants by 24% (or

325,000) during the projection period. Similarly, employment of personal care and

home health aides — spurred, in part, by the shift toward outpatient and home care

— is projected to rise by 58% (or 433,000). In addition, the continuing presence in

the labor force of mothers with young children probably underlies the anticipated 26%

(or 236,000) increase in child care jobs.18

One set of occupations in the moderately low-skilled group that has only a

slightly above-average projected growth rate could add more jobs than some of the

fast-growing occupations because of its large employment base. Specifically, 13.5

million individuals worked as retail sales persons, cashiers and other sales workers in

1998. If their employment increases by 1.8 million as projected, 9% of the total job

gains between 1998 and 2008 would occur in these sales occupations. (See Table 2,

columns 4, 5, and 6.) Expansion in the retail trade industry (e.g., department or

discount merchandise stores) will likely account for much of the employment uptick

in retail sales occupations during the projection period.19

Growth in the eating/drinking places component of the retail trade industry also

could spur large employment gains in food preparation and service occupations (e.g.,

waiters/waitresses with 303,000 jobs as well as food counter, fountain and related

workers with 247,000 jobs). Another service occupation — janitors and cleaners —

could expand greatly as well (365,000 jobs).20

Changes in the Share and Number of Jobs by Skill Level

Despite their different rates of projected job growth, the skill clusters’ shares of

total employment are likely to remain about the same. As shown in Table 3, the

highest skilled category of occupations accounted for 26% of all jobs in 1998; by

2008, the proportion could rise very modestly to 28% of the total. Both the

moderately high-skilled group and the lowest skilled group could experience a very

slight erosion in their shares of jobs over the projection period, from 24% to 23% for

the moderately high-skilled group and from 25% to 24% for the lowest skilled group.

In contrast, the moderately low-skilled group is expected to remain at 25% of total

17

Ibid.

18

Ibid.

19

Employment across the entire retail trade industry is projected to expand by 3.1 million

jobs, somewhat less than the 3.3 million job gain in the 1988-1998 period. Allison, Industry

Output and Employment Projections to 2008.

20

Braddock, Occupational Employment Projections to 2008.

CRS-11

employment. This stable pattern reflects the fact that the new jobs induced by

economic growth (20.3 million) represent a small increment to the very sizable,

existing employment base (140 million in 1998).

Table 3. Distribution of Employment, 1998 and 2008

Occupational skill cluster

1998

2008

100%

100%

High

26

28

Moderately high

24

23

Moderately low

25

25

Low

25

24

All occupations

Source: Created by CRS from BLS data.

New jobs are not the only ones available to jobseekers. Firms hire employees for

positions in both growing and shrinking occupations because many existing jobs must

be filled when workers move from one occupation to another, retire or otherwise

leave the labor force. Indeed, BLS expects that in most occupations more openings

will develop because of hiring to fill jobs vacated between 1998 and 2008 than

because of new jobs created by economic growth over the period.21

The need to replace workers is an especially important source of labor demand

in slow-growing occupations, and the only source of job openings in declining

occupations. For example, the lowest skilled cluster could add 3.3 million new jobs

between 1998 and 2008, but the number of positions available to the least skilled

workers could be considerably larger — a total of 14.1 million jobs. (See Table 4.)

The 10.8 million difference between the two employment figures is “replacement

needs,” that is, employers hiring workers into existing jobs that become vacant due

to employee mobility. While workers with the fewest years of education seemingly

would be qualified to compete for just 16% of the 20.3 million new jobs added to the

economy through 2008, they could have the skill requirements to fill 26% of the 55.0

million new and existing jobs expected to open up during the projection period. (See

the Appendix Table for a comparison of job growth and total job openings for each

of the skill hierarchy’s occupational groups.)

Thus, the job opportunities available to newcomers to and current participants

in the labor force are not limited to the change in employment generated by economic

growth. Too great a focus on rates of job growth creates a misperception about how

rapidly the skill structure of employment is changing and about the job market faced

by low-skilled workers. The skill composition of new and existing jobs that will

continue into the future should be examined to develop a complete picture of the

nature of employers’ skill requirements. Despite the concentration of new jobs in the

21

Braddock, Occupational Employment Projections to 2008.

CRS-12

highest skilled occupational cluster, it appears that workers with a high school

degree or less will continue to be in considerable demand during the first decade of

the 21st century. Specifically, while 41% of all new positions created between 1998

and 2008 could require workers to have at least a bachelor’s degree, 52% of all jobs

that open up during the period could be available to workers with a high school

education at most. (See Table 4.)

Table 4. Job Growth and Total Job Openings by Skill Cluster, 19982000

Employment changea

Occupational skill

cluster

Total job openingsb

Number

(in 000)

Percent

distribution

Number

(in 000)

Percent

distribution

All occupations

20,281

100

55,008

100

High

8,258

41

15,367

28

Moderately high

3,969

20

11,359

21

Moderately low

4,731

23

14,149

26

Low

3,324

16

14,133

26

Source: Calculated by CRS from BLS data.

Note: Numbers may not add to totals due to rounding.

a

Employment change reflects the number of new jobs created by economic growth.

Total job openings reflects the number of new jobs created by economic growth and the number

of existing jobs employers are expected to fill as the jobs are vacated by workers moving into other

occupations, retiring or permanently leaving the labor force for other reasons (i.e., net replacement

needs).

b

Conclusion

The skill structure of employment is likely to remain quite stable through 2008.

Employers are demanding a more highly educated labor force, but they also continue

to need workers across the entire skill spectrum. Too great a focus on the rate of new

job creation due to economic growth — without regard to the current size and

composition of employment as well as to the number and nature of jobs generated by

occupational turnover — results in a misperception about the speed and extent of

change in the skill structure.

As defined in this report, low-skilled jobs are not disappearing. Many

occupations with limited educational requirements are experiencing above-average

rates of job growth or substantial increases in employment levels. Consequently, jobs

that typically require a high school diploma or less could continue to account for

about one-half of total employment in 2008, just as they did in 1998. And, in

relatively slow-growing or declining occupations, many jobs are expected to become

CRS-13

available to low-skilled jobseekers because employers will need to fill vacancies

created by departed employees.

Oftentimes, members of the education and training community have focused on

those occupations expected to grow the most rapidly to urge students to obtain a

bachelor’s degree or, at the least, get postsecondary education that leads to an

associate’s degree or vocational certificate. This analysis demonstrates that jobs will

continue to be there in abundant numbers for workers with no more than a high

school education, that is, the report addresses the employment prospects of relatively

low-skilled workers. In terms of wage prospects, however, firms have been paying

a much larger premium than in the past to employees with bachelor’s degrees.22 The

substantial widening of the wage gap between more and less educated workers

suggests that there is something in addition to the barely perceptible shift toward

heightened job skill requirements (as measured by educational attainment) that has

prompted employers to increasingly favor workers with a 4-year college degree over

other workers. Perhaps firms are more generously rewarding employees who have

attained bachelor’s degrees because they believe this indicates that these workers have

the ability to more easily learn competencies that may be added to jobs over time

(e.g., using ever-evolving technologies) or to more readily adjust to organizational

restructuring (e.g., having attributes that enable them to function well in a team

environment).

With so little understanding of why the demand for education is behaving as it is,

and with no discernible shift toward occupations that require higher literacy or

education, we need to be cautious about predicting the future. About all we can

say is that in the recent past earnings of college graduates have exceeded earnings

of those with less education by wide margins.23

22

On average, the wage gap between male college and high school graduates widened from

about 33% to 48% between the latter half of the 1970s and 1998. The average wage gap

between female college graduates and female high school graduates grew from about 29% to

43% over the same period. CRS Report 95-1081, Education Matters.

23

Barton, Paul E. What Jobs Require: Literacy, Education, and Training, 1940-2006.

Princeton, NJ, Educational Testing Service, January 2000. p. 35.

CRS-14

Appendix Table. Job Growth and Total Job Openings by Occupations Within the Skill Clusters, 1998-2008

Employment changea

Total job openingsb

Number (in

000)

Percent

distribution

Total, all occupations

20,281

100

55,008

100

High-skilled occupations

8,258

41

15,367

28

Executive, administrative, and managerial workers

2,426

12

5,107

9

Professional specialty workers

5,343

26

9,249

17

Technicians, excluding health and engineering and science

308

2

635

1

Financial and business services, insurance, and related sales

workers

181

1

376

1

Moderately high-skilled occupations

3,969

20

11,359

21

Health technicians and technologists

616

3

1,124

2

Engineering and science technicians and technologists

175

1

492

1

Marketing and sales worker supervisors

263

1

601

1

2,198

11

7,652

14

717

4

1,490

3

Moderately low-skilled occupations

4,731

23

14,149

26

Retail sales persons, cashiers, and sales workers not elsewhere

classified

1,842

9

5,833

11

Health service workers

676

3

1,064

2

Personal service workers

894

4

1,413

3

All other service workers not elsewhere classified

241

1

546

1

Precision production, craft and repair occupations

1,252

6

5,061

9

Occupational skill cluster

Administrative support, including clerical workers

Protective service workers

Number (in

000)

Percent

distribution

CRS-15

Employment changea

Total job openingsb

Number (in

000)

Percent

distribution

Farm operators and managers

-174

-1

232

0

Low-skilled occupations

3,324

16

14,133

26

Private household workers

-178

-1

276

1

Food preparation and service workers

1,096

5

5,159

9

408

2

1,164

2

1,753

9

6,369

12

245

1

1,165

2

Occupational skill cluster

Cleaning and building service workers, excluding private

household

Operators, fabricators and laborers

Farmworkers, forestry and fishing workers, and related work

excluding farmers and managers

Number (in

000)

Percent

distribution

Source: Created by the Congressional Research Service from U.S. Bureau of Labor Statistics’ data.

Note: Numbers may not add to totals due to rounding.

a

Employment change reflects the number of new jobs created by economic growth.

Total job openings reflects the number of new jobs created by economic growth and the number of existing jobs employers are expected

to fill as the jobs are vacated by workers moving into other occupations, retiring or permanently leaving the labor force for other reasons

(i.e., net replacement needs).

b