Employment in a Changing Economy
Issue Summary
Changes in the American economy in the 21st century are affecting the U.S. workforce in significant ways, and in some cases reshaping the nature of work. For instance, advancements in artificial intelligence, robotics, and other new technologies are leading to increased automation and changes in work tasks. There has also been a growth in online platforms for obtaining gig work, and employers are increasingly using subcontracting and lower-paying alternatives to traditional employment arrangements (including in higher education).
In addition, the economic shocks resulting from the COVID-19 pandemic, including widespread business closures, unprecedented levels of unemployment, and general health and safety concerns have accelerated certain structural changes, such as increased telework and automation. In the coming years, the pandemic may have lasting effects on how and where work is done across the economy, as well as employer demand for workers or certain skills in some sectors, which may lead to some workers continuing to face long-term unemployment.
Sustained attention by federal agencies, including the Departments of Labor and Education, and coordination between federal, state, and local agencies is important for understanding and responding to this changing employment landscape and workforce needs. Additionally, where workers face disruptions or displacement, unemployment insurance, employment adjustment assistance, and other federal programs can provide critical support and protection, including getting workers proper training to meet the new needs of the changing economy.
However, federal agencies could improve how they provide such employment supports.
For instance:
- During the COVID-19 pandemic, unemployment benefits were temporarily expanded to cover more workers, such as self-employed and gig workers who are not typically eligible. Millions of workers relied on this unemployment support to meet their urgent financial needs. However, the temporary benefit expansion expired in September 2021 and many workers now lack access to this support. To ensure the unemployment insurance system reflects the modern economy, the Department of Labor should examine options to systematically support such unemployed workers moving forward. It should also identify and address inequities in who receives unemployment benefits, and assess lessons learned from the pandemic related to customer service and emergency planning, as it works on transformational changes to the system.
- Self-driving trucks could have a significant impact on hundreds of thousands of long-haul truck drivers. For example, long-haul highway driving may become fully automated, resulting in fewer trucking jobs and possibly lower wages. On the other hand, self-driving trucks may still need operators, which could change the skillset and wages of long-haul truck drivers without significantly affecting the number of trucking jobs. Because widespread use of self-driving trucks is still years away, the Departments of Labor and Transportation should consult with stakeholders on an ongoing basis to help analyze and respond to potential workforce changes.
- Technology companies are a major source of high-paying U.S. jobs, but some have questioned the sector's commitment to equal employment opportunity. The estimated percentage of minority technology workers increased from 2005 to 2015, but no growth occurred for female and Black workers (whereas Asian and Hispanic workers made significant increases). Further, female, Black, and Hispanic workers remain a smaller proportion of the technology workforce compared to their representation in the general workforce. The Equal Employment Opportunity Commission has identified barriers to recruitment and hiring in the technology sector as a strategic priority. Additionally, Labor’s Office of Federal Contract Compliance Programs (OFCCP) directs contractors to set placement goals or benchmarks for historically underrepresented groups. OFCCP has developed an alternative affirmative action program but few contractors participate in this program. OFCCP should assess its usefulness and determine what improvements could be made to better encourage contractor participation.
