t require college education and abstract skills, as well as jobs comprising primarily manual tasks that have lower educational requirements. Automation of routine manufacturing jobs and routine clerical jobs in all sectors has reduced employment in these middle-skill occupations.
The RAND study also identified a number of implications for the future of work based on the interactions of these forces. It foresaw that the employer-employee relationship would become less standardized and more decentralized. Indeed, recent research (PDF) based on a survey conducted on the RAND American Life Panel shows employees in alternative work arrangements—temporary help workers, on-call workers, contract workers, and independent contractors or freelancers—have grown to 16 percent of the workforce from 10 percent a decade ago and this increase occurred in varied industries. Inclusion of other self-employed workers, as well as those working part-time, would likely expand the share of the workforce in employment other than full-time wage and salary employment. While this trend has the potential to increase flexibility in the labor market, one consequence is that a growing share of the workforce is without some of the traditional benefits associated with standard employment arrangements such as access to employer-provided sick leave, health insurance, and pension benefits; job training and professional development opportunities; career advancement; and, to some extent, protection from business cycle downturns. Such workers then bear more of the responsibility for ensuring continuous employment, for determining their career trajectory, for insuring against risks of illness or poor health, and for ensuring financial security in retirement.
The rapid pace of technological change and the nature of global competition would place a greater emphasis on lifelong learning and retraining over the working life.
Another implication identified by the RAND study was that the rapid pace of technological change and the nature of global competition would place a greater emphasis on lifelong learning and retraining over the working life. Although trends in job tenure suggest stable or rising tenure for the workforce in the past decade, workers may still experience a need to acquire new skills to perform the same job or to advance to another job with the same employer. The report also predicted that in tight labor markets, employers will adopt approaches to accommodate more elderly, women, and disabled in the workforce. While there are protections in place for disabled workers, evidence on actual accommodations provided appears to be mixed.
The report asserted that wage dispersion would continue to widen, as technological change and globalization (among other drivers of rising wage disparities) created both winners and losers. A recent RAND report summarizing the trends on this front concludes that this is absolutely the case. In particular, median real wages for full-time male employees have been stagnant since the 1980s, while real wages at the bottom of the distribution have declined.
Much remains to be done on the policy front to address the challenges raised by the evolving trends. The slower growth of the labor force could be addressed by accommodating disabled workers and those transitioning to full retirement, as well as increasing subsidies for child-care and early learning programs so more parents with young children can work. Comprehensive immigration reform focused on increasing the skill mix of working-age immigrants is also important for addressing supply shortages. Institutions need to respond to the changing nature of employer-employee relationships and ensure portability of benefits such as healthcare and retirement saving vehicles. The Affordable Care Act and “secure choice” retirement initiatives in a few states are steps in the right direction.
The prospects for continued upgrading of skill requirements and global competition across a wide range of industries and occupations requires ensuring that the country's youth are receiving educatio