Economic Restructuring

The Current U.S. Occupational Structure

Not all service occupations are alike. The diversity in compensation and skills ranges widely and includes occupations such as nurses, child care workers, software engineers, postsecondary teachers, cashiers, and truck drivers. Certain service occupations require highly skilled, highly educated workers, but a majority of the occupations (measured as the number of people in those occupations) do not require a postsecondary degree, although many do require some technical training beyond a high school degree. The top 10 occupations listed in Table 1 employ nearly 20 percent of the total workforce.

As of May 2005, 130 million people were in the workforce. More than 70 percent were in occupations with an average hourly wage under $18.39 or $38,500 a year; 50 percent were in occupations with an average hourly wage below $15.77 or $32,500 annually; and 24 percent of all workers earned wages at or below the poverty level.

The trend by which low-skill jobs dominate the U.S. labor market will continue, with projections that two thirds of U.S. job growth will come from occupations requiring only on-the-job training. Those with the most projected growth are some of the lowest-paying occupations (see Table 2).

Historical Causes of Economic Restructuring

Why has manufacturing become less of an important economic engine for the United States? In the 1980s many countries, including the United States, changed the international financial rules, making it easier for corporations to move capital and goods from one nation to another. The legal opening of markets also increased competition for U.S.-based companies, as “open” markets are not necessarily equal. U.S. corporations—with the salaries and benefits of their employees and the legal limits on labor, safety, and environmental practices—were at a competitive disadvantage with companies in the developing world. As a result, many U.S. producers utilized [Page 277]cost-cutting practices called offshoring and outsourcing. Outsourcing means buying services from another company—often in another country. Offshoring is when companies opt to move their production facilities to foreign countries—often to what are called economic processing zones. Compared with their U.S. counterparts, workers in economic processing zones receive significantly less pay, have fewer health and safety protections, and have fewer rights to act collectively.

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