Introduction 

to America’s

Dynamic

Workforce

by U.S. Secretary of Labor Elaine L. Chao

America’s workers are the most dynamic

and productive in the world. They are

the backbone of the American economy, which is constantly evolving and producing new jobs and new opportunities. That’s a

tribute to the strength of our economy, the

resiliency of our workforce, and an example

of why the United States continues to be the

envy of the world.

With this dynamism comes challenges.

President George W. Bush and his

Administration recognize that some industries

are in transition and that workers must upgrade

their skills or find new jobs to keep pace.

That’s why the President has asked Congress

for $23 billion to fund 34 different training and

employment programs throughout the federal

government. That is in addition to the generous, sophisticated and comprehensive safety

net in place for transitioning workers. It

includes income support, career counseling,

placement services and help with expenses

including childcare and health care. 

The President also recognizes that one of the

critical challenges facing our nation today is

ensuring that our workers are equipped with

the right skills for the 21st Century economy.

As the economy strengthens, new jobs are

being created. But many of these require

upgraded skills or some form of higher education. That doesn’t necessarily mean a fouryear degree. It can mean skills learned on the

job or professional certification pursued

through community colleges and apprenticeship programs in the skilled trades. 

To respond to this urgent national need, 

the President announced several key 

initiatives:

■ A Jobs for the 21st Century Initiative, which

will expand the capacity of community

colleges and other institutions to provide

job training.

■ A High-Growth Job Training Initiative,

which tracks industries experiencing

growth and helps workers access these

new opportunities.

■ The Skills to Build America program,

designed to educate young people and

workers about the great opportunities

available in the skilled trades, which are

needed for America’s rapidly growing 

construction industry. 

secretary’s message

america’s dynamic workforce

secretary’s message

ii
iii

■ An overhaul of the publicly funded job

training program, so that more workers are

trained with skills in demand in their communities.

■ Comp Time and Flex Time initiatives, to

provide private sector working parents,

single mothers and other caregivers with

the same options that federal government

employees have to balance work and family needs.

■ Building on No Child Left Behind educational reform, and improving high school

education to ensure that our workers have

the strong foundation needed to succeed in

an increasingly knowledge-based economy.

I’m proud of the role that the U.S. Department of Labor plays in fulfilling the President’s vision for a 21st Century workforce 

that is second to none. And I hope this

book, which includes a snapshot of the

major indicators of our economy and workforce, highlights why American workers 

continue to be the safest, most secure and

most productive in the world.

america’s dynamic workforce
iv

america’s dynamic workforce

table of contents

List of Charts and Tables

List of Acronyms

Executive Summary

American Workers Benefit from Our Labor System

Chapter 1. The Jobs Recovery

Chapter 2. Changing Jobs and Moving Up the Income Ladder

Chapter 3. Comparing the United States with Other Countries 

Helping the Less Fortunate

Chapter 4. Our Compassionate Nation: Helping Workers Transition to New Jobs

Chapter 5. Keeping Workers Safe and Secure 

Chapter 6. Creating the Environment for Job Growth

The Challenges Ahead

Chapter 7. Jobs for the 21st Century

Chapter 8. The Jobs of the Future: 2002 to 2012

Chapter 9. Saving for Our Future

vi

ix

x

1

13

21

31

39

59

73

93

109
v

Acknowledgments

This report was produced under the direction

of U.S. Secretary of Labor Elaine L. Chao. It

was edited by Diana Furchtgott-Roth, Chief

Economist, Department of Labor. 

The report is the product of the efforts of

many people at the Department of Labor.

Assistant Secretary Ann Combs, Assistant

Secretary Emily DeRocco, Kathleen Franks,

Laura Genero, Assistant Secretary John

Henshaw, Michael Horrigan, Deputy Assistant

Secretary Charles E. James, Sr., Virginia Klein,

Assistant Secretary David Lauriski, Deputy

Under Secretary Arnold Levine, Assistant

Secretary Victoria Lipnic, Andrew Nelson,

Alison Pasternak, Joseph Piacentini, and

Veronica Stidvent all contributed. Interns

Jonathan Bond (now at the London School of

Economics), Jonathan Horn (now at the

Department of Education) and Henry Scott

(now at Notre Dame University) also wrote

sections of the report.

Xiuyue Zhu coordinated the production of the

report, including the organization of tables

and charts, and Lawrence Koziarz assisted with

proofreading. Kate Krizan was responsible for

design, graphics, and layout.

america’s dynamic workforce
Chapter One The Jobs Recovery

2002-12 Employment Projections: Top Five High-Growth, High-Paying Occupations that Do Not

Require a Bachelor’s Degree

Average Unemployment Rates for Selected Decades Compared to July 2004

Four-Week Average of Initial Claims for Unemployment Insurance, August 2001 - August 2004

Labor Force Participation Rates of Men and Women, January 1955 - January 2003

Average Annual Rate of Change in Labor Productivity, Nonfarm Business Sector, Various Periods,

1973 - 2003

Chapter Three Comparing the United States with Other Countries

Employment as a Percent of the Working-Age Population, G-7 Countries, 2003

Employment as a Percent of the Working-Age Population, G-7 Countries, 1990 - 2003

Employment Growth, G-7 Countries, 1990 - 2003

Unemployment Rates, G-7 Countries, First Quarter, 2004

Incidence of Long-Term Unemployment, G-7 Countries, 2003

Annual Hours Worked per Employed Person, G-7 Countries, 1990 and 2003

Percent of Labor Costs Paid in Social Security and Income Taxes, G-7 Countries, 2003

Change in the Tax Burden as a Percent of Labor Costs, G-7 Countries, 1996 - 2003

Labor Market Flexibility Measures, G-7 Countries, 2003

Product Market Flexibility Measures, G-7 Countries, 1998

vi

Charts

1.1 

1.2

1.3

1.4

1.5

3.1

3.2

3.3

3.4

3.5

3.6

3.7

3.8

3.9

3.10
vii

america’s dynamic workforce

4.1

5.1

5.2

5.3

5.4

6.1

8.1

8.2

8.3

8.4

8.5

8.6

9.1

9.2

9.3

9.4

9.5

Chapter Four Our Compassionate Nation: Helping Workers Transition to New Jobs

Revenues Collected & Benefits Paid, as a Percent of Total Wages, 1950 - 2000

Chapter Five Keeping Workers Safe and Secure

Workplace Injury and Illness Rate, 1992 - 2002

Fatal Work Injuries, 1992 - 2002

Number of Fatal Work Injuries Involving Hispanics, 2001 and 2002

Mining Fatalities, 2000 - 2003

Chapter Six Creating the Environment for Job Growth

DOL Regulatory Agenda, 2000 - 2004

Chapter Eight The Jobs of the Future: 2002 to 2012

A Healthy Economy is Projected Through 2012

The Civilian Labor Force, Ages 16 and Older, Will Grow by 1.1 Percent Annually between 2002

and 2012

Labor Force Participation Rate by Sex, 1952 - Projected 2012

Labor Force Growth Rates of Minorities Outpaces Whites, 2002 - Projected 2012

Education and Training Pays, 2003

Percent Change in Employment for Skilled Trades Occupations, 2002 - Projected 2012

Chapter Nine Saving for Our Future

Average Life Expectancy at Birth, 1950 - 2000

Expectation of Continued Employment after Retirement, 2003

Number of Plans, 1978 - 1999

Number of Participants in DB and DC plans, 1978 - 1999

Ownership of IRA, Percent of all U.S. Households, 2001
Tables

Chapter One The Jobs Recovery

Civilian Labor Force by Race and Hispanic Origin, 2000 and Projected 2050

Chapter Six Creating the Environment for Job Growth

Regulations Initiated and Completed, 2001- 2004

Chapter Eight The Jobs of the Future: 2002 to 2012

Employment by Industry and Percent Distribution, 2002 and Projected 2012

Employment by Industry and Percent Distribution, 2002 and Projected 2012

Employment in High-Wage, High-Growth Occupations, 2002 and Projected 2012

viii

1.1

6.1

8.1

8.2

8.3
ix

List of Acronyms

AHPs Association Health Plans 

BED Business Employment Dynamics

BLS Bureau of Labor Statistics

CBO Congressional Budget Office 

COBRA Consolidated Omnibus Budget 

Reconciliation Act of 1985

CPI Consumer Price Index

CPI-U Consumer Price Index for All Urban 

Consumers

CPS Current Population Survey 

DOE Department of Energy

DOL Department of Labor 

DUA Disaster Unemployment Assistance

EBSA Employee Benefits Security 

Administration 

EEOICPA The Energy Employees’ Occupational

Illness Compensation Program Act 

EGTRRA Economic Growth and Tax Relief 

Reconciliation Act

EPL Employment Protection Legislation 

ERISA Employee Retirement Income Security Act

ESA Employment Standards Administration

ETA Employment and Training Administration

FCIC Federal Citizen Information Center 

FECA Federal Employees’ Compensation Act

FLSA Fair Labor Standards Act 

FMLA Family and Medical Leave Act 

FY Fiscal Year

GAO General Accounting Office

GDP Gross Domestic Product

HCTC Health Coverage Tax Credit 

IRAs Individual Retirement Accounts 

ISM The Institution for Supply Management

IST Integrated Systems Technology

JGTRRA Jobs and Growth Tax Relief Reconciliation Act

JOLTS Job Openings and Labor Turnover Survey

LM-2 Labor Organization Annual Report

LMRDA Labor-Management Reporting and 

Disclosure Act

MSHA Mine Safety and Health Administration

MSPA Migrant and Seasonal Agricultural 

Worker Protection Act 

NEG National Emergency Grants

NFI New Freedom Initiative

NIOSH National Institute for Occupational 

Safety and Health 

NLSY National Longitudinal Survey of Youth

NSSGA National Stone, Sand and Gravel 

Association 

OAA Older Americans Act 

ODEP Office of Disability Employment Policy

OECD Organization for Economic 

Cooperation and Development

OFCCP Office of Federal Contract Compliance 

Programs

OMB Office of Management and Budget 

OSH Occupational Safety and Health (Act)

OSHA Occupational Safety and Health 

Administration 

OTI OSHA Training Institute 

PPB Policy Planning Board 

PRA Personal Reemployment Accounts

PSID Panel Study of Income Dynamics

PY Program Year 

SAVER Savings Are Vital to Everyone’s 

Retirement (Act)

SCSEP Senior Community Service 

Employment Program 

SIPP Survey of Income and Program Participation

SUTA State Unemployment Tax Act

T-1 Trust Annual Report

TAA Trade Adjustment Assistance

TEUC Temporary Extended Unemployment 

Compensation

TEUC-A Temporary Extended Unemployment 

Compensation for Displaced Airline

Industry and Related Workers

UI Unemployment Insurance

UTF Unemployment Trust Funds

WARN Worker Adjustment and Retraining 

Notification

WIA Workforce Investment Act

america’s dynamic workforce
America’s workforce is one of our greatest

assets. American workers are hard-working,

productive, and innovative. We are a nation

of bountiful natural resources, but our economy and our livelihood have always depended

on our human resources. And because

America invests in its workers and has built a

workforce of unrivaled creativity and talent,

this nation has built a commanding lead in

the world economy. We have only 5 percent

of the world’s total population, but we produce roughly one-quarter of the world’s economic output. Due to our superior workforce, when the rest of the world looks for

expertise and skill and quality workmanship,

they know to look for the label that says

“Made in the U.S.A.”

To millions of Americans, work is an essential

part of our lives: We depend on our work not

only for a livelihood, but for the chance to

meet new friends and to learn new skills.

America’s factories, offices, and farms are

places of great variety, with people coming

from many levels of experience, skills and

backgrounds. This diverse workforce is united in a commitment to hard work and a

desire to make America a more hopeful and

prosperous place. 

Our workforce is a place of remarkable

opportunities. In other nations, where a person’s career is often charted out from an early

age, the idea of changing careers multiple

times is practically impossible. But in

America, it is normal. Few Americans stay in

the same job their entire lives. And as

Americans pursue many different jobs, they

gradually increase their income. A robust

labor market makes this possible. 

Today, the U.S. economy boasts one of the

lowest unemployment rates and one of the

fastest job growth rates in the industrialized

world. Innovation fuels this job creation as

Americans continue to find new and better

ways to produce goods and services. New

industries replace old. New companies spring

up as others fade away. Even if an American

unfortunately loses a job, the flexibility and

resilience of our economic system ensures

that new opportunities quickly emerge for 

that worker. 

America’s Dynamic Workforce answers three

important questions. How has the U.S. labor

market helped America triumph over recent

economic adversity? What challenges to our

workforce are we confronting today? And

how can we prepare, train, and equip our

workers for tomorrow’s opportunities? 

executive summary

america’s dynamic workforce

executive summary

x
xi

How Has the U.S. Labor Market

Triumphed Over Recent Adversity?

The Jobs Recovery.

Chapter One describes the economic recovery

and job growth that followed a period of

major shocks to the economy that occurred

between 2000 and 2002. These shocks

included a recession and a punishing bear

market that began in 2000, the most destructive terrorist attack in history, and major 

corporate accounting scandals. The chapter

reviews what we know about how the labor

markets were affected by these events and the

rebound in employment that began in the 

second half of 2003.

Changing Jobs and Moving Up the Income

Ladder.

Chapter Two describes how the mobility and

vibrancy of America’s workforce brought

America from recession to recovery.

Increased job opportunities, income mobility,

and worker productivity add new vitality to

the economy and benefit workers and

employers alike. As a consequence of the

freedom and flexibility to change jobs, workers receive higher earnings, better jobs, and

better working conditions, while employers

benefit from a more skilled and efficient

workforce.

Comparing the United States with Other

Countries.

Chapter Three compares the United States’

workforce to those of other countries and

demonstrates how the spirit of innovation of

individual Americans has enhanced the performance of the U.S. labor market in the

world economy. By welcoming the jobs of

the future, America has achieved low unemployment and record rates of economic

growth. By comparison, other industrialized

nations do not enjoy the same resilience in

their labor markets, leading to far higher

rates of unemployment, long-term job loss,

and income stagnation.

What Challenges Are We

Confronting Today? 

Our Compassionate Nation: Helping

Workers Transition to New Jobs.

Chapter Four focuses on how we make it easier for workers to transition into new jobs.

While higher rates of job turnover have longterm advantages for both workers and

employers, in the short term, it can be a difficult process. As a compassionate nation, we

provide temporary financial support and job

training for those individuals looking to find

new work.

Keeping Workers Safe and Secure.

Chapter Five highlights the continuing importance of workplace safety, a key feature of our

labor rules and regulations. U.S. employers

are required to keep workers safe. The

Occupational Safety and Health

Administration, the Mine Safety and Health

Administration, the Employment Standards

Administration, and the Employee Benefits

Security Administration protect workers’ safety, equal employment opportunities, and

employee benefits. As a result, workplace

safety and workers’ health have improved,

with dramatic reductions in work-related

injuries, illnesses, and fatalities. 

Creating the Environment for Job Growth.

Chapter Six describes the delicate balance we

must maintain between regulating the workplace and ensuring that those regulations do

not stunt job creation. Needless paperwork

america’s dynamic workforce
and unnecessary and burdensome regulations

harm the economy. By updating overtime

rules for managerial and other white-collar

jobs, bringing modern financial accounting

methods and standards to labor unions, and

introducing more competition to the contracting process, we have improved the regulatory

process and eliminated economic inefficiencies.

How Can We Prepare, Train, and

Equip Our Labor Force for

Tomorrow’s Economy?

Jobs for the 21st Century

Chapter Seven describes President Bush's proposals to make the U.S. workforce more competitive. These include reform of the workforce

Investment Act of 1998 in order to provide a

more flexible workforce investment system and

better opportunities for training workers. The

President's High Growth Job Training Initiative

prepares workers to take advantage of jobs opportunities in high growth economic sectors.

Innovation training accounts and personal reemployment accounts give workers the choices

they need to select individual types of training.

The Jobs of the Future: 2002 to 2012.

Chapter Eight explores how we can best prepare the labor force for the changing economy of the 21st Century. We must work with

the private sector to ensure that federal training programs keep pace with the opportunities

the economy offers and give our workers the

skills they need to succeed. There will be

emerging opportunities in technology, education, health care, construction, manufacturing,

and many other industries. Those opportunities will be available to all who have the right

skills and a readiness to learn on the job.

Saving for Our Future.

Chapter Nine explores the future challenges

that come with an increasingly older workforce. By the year 2050, 21 percent of the

U.S. population will be 65 or over. Many of

these workers will continue to work past the

traditional age of retirement. But many will

exit the workforce, placing new stresses on

our retirement and pension systems. Today’s

workers must begin to prepare for retirement,

and the tax system must make retirement easier

and more affordable.

Conclusion

In the 21st Century, America’s workplace continues to change with new innovations and

changes in international competitiveness in

our economy, and it continues to adapt to

new opportunities. This changing workplace

makes our workers a great source of economic strength. Today’s American workers enjoy

substantial flexibility in the labor market with

a wide array of jobs and low unemployment.

With America’s Dynamic Workforce, we are

defining the strengths of our workforce,

describing policies that are being pursued to

make our workforce stronger, and promoting a

vision for future actions that we must take to

ensure America remains the best place in the

world to work.

executive summary

xii

american workers benefit from our labor system

Over the last year, the U.S. labor market 

has weathered the significant economic

shocks of 2000-2002 surprisingly well.

Forecasts for very high rates of unemployment never materialized. And while the

recovery in the labor market did lag the

overall pace of the economy’s expansion,

prospects for job creation remain bright.

Employment Growth is Steady 

In the second half of 2003 payroll employment began to rebound from the 2001 recession. The workforce started to recover following the collapse of the stock market bubble, the 9/11 attacks, the corporate scandals,

and the wars in Afghanistan and Iraq.

According to payroll survey statistics from

the Bureau of Labor Statistics (BLS), from

August 2003 to July 2004, 1.5 million jobs

were added, with over 1 million of these

since the end of 2003. Household survey

data from BLS showed a much larger gain of

2.3 million jobs added since August 2003.

Most sectors have gained jobs in recent

months. The largest gains have occurred in

professional and business services, which

added 495,000 jobs from August 2003 to July

2004. Employment in education and health

services added 320,000 jobs from August 2003

to July 2004 and 1.5 million jobs since January

2001. Construction and leisure and hospitality

also had large job gains over the past year.

Manufacturing employment increased by

91,000 since January 2004. Before the recent

gains, manufacturing employment had

declined for 42 consecutive months, and the

industry lost 3 million jobs from July 2000 to

January 2004.

The top five (in terms of numbers) high-growth,

high-paying occupations that usually require a

college degree are expected to be postsecondary

chapter one

1

chapter one

the jobs recovery
2

teachers (603,000 new jobs); general and operations managers (376,000 new jobs); elementary school teachers, except special education

(223,000 new jobs); accountants and auditors

(205,000 new jobs); and computer systems

analysts (184,000 new jobs).i

Recent employment gains accompany substantial growth in the gross domestic product

(GDP). Real GDP grew at an annual pace of

3.0 percent during the second quarter of

2004. The growth over the past four quarters

was 4.7 percent, among the highest in the

past 20 years. Real GDP growth for 2004 is

expected to be above the historic average.

Business investment grew in 2003, as companies started to hire, build inventories, and

increase shipments of nondefense capital

goods. Remarkable productivity growth since

1995 has led to higher wages and lower

prices, meaning a better standard of living for

U.S. workers and their families.

america’s dynamic workforce

Many of the new jobs that have

been created are in industries

that pay above-average

wages. Although it is impossible to

know the exact wage of a new job, we

can observe increases in industry employment. Further, we know how the

average wage for that industry relates to

wages in the economy as a whole. New

jobs in construction, manufacturing, education and health services, and professional and business services account for a

substantial share of new employment, and

these industries all pay above-average

wages.

Looking forward, total employment is

projected to increase by 21.3 million jobs

(or 14.8 percent) over the 2002-2012

period, increasing to 165.3 million jobs.

The “hottest jobs” — those with the

greatest percentage increase from 2002

through 2012 — are projected to be

medical assistants (+59 percent); network systems and data communications

analysts (+57 percent); physician assistants (+49 percent); social and human

service assistants (+49 percent); and

home health aides (+48 percent).

Nurses, truck drivers, manufacturing sales

representatives, maintenance workers,

and managers of retail stores are the top

five (in terms of numbers) fast-growing,

high-paying occupations for workers who

haven’t completed college. (See Chart

1.1.) These jobs all receive above-average wages and are likely to be in

demand in the coming years. 
Unemployment is Low by Historical

Standards

The unemployment rate was at or near 5.6

percent during the first seven months of 2004,

down from its most recent peak of 6.3 percent

in June 2003. At 5.5 percent, the unemployment rate in July 2004 was lower than the

average rates of the 1970s (6.2 percent),

1980s (7.2 percent), and 1990s (5.7 percent).

From 2003 to 2004, unemployment rates

declined in 49 states.

Unemployment Insurance

The federal-state Unemployment Insurance (UI)

program, to be discussed in more detail in

Chapter Four, helps workers who have fallen

on hard times. The program was created in

1935 in response to the Great Depression,

chapter one

when millions lost their jobs. Unemployed

workers were unable to afford goods and services, which contributed to additional layoffs.

The federal-state UI program provides unemployment benefits to workers who are unemployed and who meet other eligibility requirements of state law.

Initial UI claims peaked in late 2001 at the

end of the recession as the unemployment

rate was increasing. The number of claims

hovered above the 400,000 mark for the following two years, and then fell markedly from

the middle of 2003 to early 2004. The fourweek moving average of initial claims has

been below 350,000 for several months—a

level consistent with further job growth. (See

Chart 1.3.)

3
4

Not only are women a vital component of the

labor market, but they make up a growing

share of small business owners. As President

Bush said, “When it comes to entrepreneurship and job creation, ours is an increasingly

woman’s world.”iii According to the Census

Bureau, the number of women-owned firms

grew almost three times as fast as all firms

between 1992 and 1997.iv Currently,

America’s 9.1 million women-owned businesses employ 27.5 million people and contribute

$3.6 trillion of revenue to the economy.v

More women are in the labor force because

they are achieving higher levels of education,

and more women attend university because

they intend to join the labor force. According

to the Census Bureau, 56 percent of college

students are women, and women have been

the majority of college students since 1979.

Whereas fewer than 4 percent of women 25

years old and over had completed four years

or more of college in 1940, 26 percent of

women had earned a bachelor’s degree or

more in 2003.

america’s dynamic workforce

The Demographics of the Labor

Force are Changing

Male & Female Workers

The labor force participation rate of men has

been gradually declining due in part to earlier

retirement. Although men’s labor force participation rates remain above that of women, the

labor force participation rate of women

increased significantly during the 20th century. The long-term growth in the female labor

force largely reflects more mothers in the

workforce. Indeed, 72 percent of mothers

with children under 18 are in the labor force

today, up from 47 percent in 1975.ii The labor

force participation rates of women and men

are considerably closer than they were in the

1960s, 1970s, or 1980s. (See Chart 1.4.)

The increase in the labor force participation

rate of women and the decline among men

means that the percent of workers that are

women has increased. In 2003, nearly 47

percent of labor force participants were

women, up from 43 percent in 1983, 39 percent in 1973, and 34 percent in 1963.
The labor force participation rate of women

has declined slightly in the past few years. It

peaked at 60.0 percent in 1999, and stood at

59.5 percent in 2003. The trends differ across

age groups. Since 2000, there has been a

sharp decline in labor force participation

among women ages 16 to 24, with fewer

declines for women ages 25 to 34 and 35 to

44. In contrast, rates for women ages 55 to 64

have continued to rise, moving from 51.9 percent in 2000 to 56.6 percent in 2003. 

Participation rates of women also differ by

motherhood status. In 2000, the labor force

participation rate of mothers with infant children fell to 55 percent from a record-high 59

percent in 1998. This was the first significant

decline since the Census Bureau developed

the indicator in 1976. The participation rate

remained at 55 percent in 2002.vi 

An emerging trend is the decline in labor force

participation among highly educated mothers

over 30. It is too soon to see if this is a permanent trend. Many women have made a choice

to stay home with their children. While

women of the Baby Boom generation pursued

career opportunities that were unavailable to

their mostly stay-at-home moms, many women

of Generation X appears to be forgoing paychecks for time with their family.

Young Workers

The Fair Labor Standards Act allows the

employment of 14- and 15-year-olds outside

school hours, but prohibits them from working

past 9 p.m. in the summer and 7 p.m. during

the school year. The law also limits them to

working three hours per day on a school day.

Young persons 14 and 15 years of age can

work in many non-manufacturing and nonhazardous jobs.

chapter one

5

The Entrepreneurial Spirit of America: Providing Tax

Relief to American Families and Small Businesses. 

I

n 2001 President Bush acted promptly to

help America's workers by providing tax

relief to put more money in families' pockets and encourage businesses to grow and

invest. Tax relief brought substantial savings

to families and helped fight back the effects

of the recession. America's families and

small businesses have more money to spend,

save, and invest

because of the

President's 2001

and 2003 tax

cuts. This year,

111 million taxpayers will

receive, on average, a tax cut of

$1,586 and 25

million small

business owners

will receive $75 billion in total tax relief,

enabling them to increase hiring.

The Jobs and Growth Tax Relief Reconciliation

Act of 2003 accelerated the tax relief signed

into law by the President in 2001, including

marriage penalty relief, an increase in the

child tax credit, and tax rate reductions for

every family and small business that pays

income taxes.

The President's 2001 and 2003 tax cuts also

provided new incentives for businesses, especially small businesses, to invest in plants and

equipment and create new jobs.
6

Data from the National Longitudinal Survey of

Youth (NLSY) of 1997 show substantial work

activity among 14- and 15-year-olds. More

than half (57 percent) of all youths worked at

age 14. Most working 14-year-olds held freelance jobs, such as babysitting or mowing

lawns. At age 15, 64 percent of youths

worked. Many young people worked in eating and drinking places, with 17 percent of

working 14-year-olds and 29 percent of working 15-year-olds employed this sector.vii The

NLSY data of 1979 show that younger Baby

Boomers (i.e., people born in the years 1957

to 1964) held an average of 4.4 jobs from age

18 to 22.viii 

Older Workers

While men today are retiring earlier than they

did half a century ago, in the past three years

labor force participation rates have actually

increased for men age 55 and older. Participation rates are also up for women age 55

and older. First, people are living longer and

healthier lives. Second, the removal of the

Social Security earnings test via the Senior

Citizens’ Freedom to Work Act of 2000 eliminated work disincentives for seniors. No

longer are Social Security benefits reduced for

beneficiaries who retire at normal retirement

age and earn wages.

Third, defined contribution retirement plans

have become more popular. While workers

covered by defined benefit plans typically

face strong incentives to retire at the plan’s

early retirement age, workers covered by

defined contribution plans know that they

continue to save by working longer.

In addition, stock market fluctuations between

2000 and 2003 caused some seniors to postpone retirement due to diminished retirement

america’s dynamic workforce

President Bush Has Called on Congress to Extend His Tax

Relief Plan. 

I

f Congress does not act, American families

and businesses would see a tax increase

starting next year, thereby hurting economic

recovery and future job creation. Unless

Congress takes action:

■ In 2006, the small business expensing limit 

will shrink from 

$100,000 to just 

$25,000, increasing the 

cost of capital 

investments for 

America's small 

businesses and 

making it more 

difficult for them 

to hire workers;

■ In 2009, the top 

tax rate on dividends will increase from 15 

to 35 percent, 

while the tax 

on capital gains 

will climb from 

15 to 20 percent, raising the tax burden on 

retirees and families investing for their 

future; and

■ In 2011, the tax rate relief, new 10-percent 

tax bracket, death tax repeal, marriage 

penalty relief, small business expensing, and 

all the remaining tax relief enacted over the 

past three years will sunset, resulting in tax 

increases for every individual American man 

or woman who pays income taxes and making 

it harder for businesses to hire workers.
savings, while other seniors re-entered the

labor force after previously retiring. Whatever

the cause, more seniors are spending additional time in the labor force during their

golden years.

Looking forward, labor force growth for the

2002-2012 period will be affected by the aging

of the Baby Boom generation. The median age

of the labor force was 34.6 years in 1982, 36.6

years in 1992, and 40.0 years in 2002, and is

projected to reach 41.4 years in 2012. This

increase is due in part to growth of the older

population, as well as to continued increases in

seniors’ labor force participation rates.ix The rising age also results from fewer young people in

the labor force, both because of a smaller population of young people and a decline in their

labor force participation rates.

African-Americans, Asians, and Hispanics in

the Workforce

The labor force is becoming increasingly

diverse. With faster population growth and

increasing participation rates, the share of

minorities in the workforce will grow substantially in the coming decades. The share of

white non-Hispanics in the labor force is

anticipated to decrease from 73 percent in

2000 to 53 percent in 2050. Over the same

period, Hispanics are expected to more than

double their share, from 11 percent in 2000 to

24 percent of the labor force in 2050. Blacks

also are expected to increase their share, from

12 percent in 2000 to 14 percent in 2050.

Asians, the fastest-growing group in the labor

force, are projected to increase their share

from 5 percent to 11 percent between 2000

and 2050.x

chapter one

7
8

which their working conditions differ is that

people with disabilities are more likely to

work at home exclusively.xiii To enhance

opportunities for more people with disabilities

to enter the workforce and participate fully in

their communities, President George W. Bush

announced his New Freedom Initiative (NFI)

for people with disabilities.

The President’s NFI is a comprehensive program to promote the full integration of people

with disabilities into all areas of society by

increasing access to assistive and universally

designed technologies, expanding educational

and employment opportunities, and promoting enhanced access into daily community

life. The Bush Administration is also committed to the full enforcement of the Americans

with Disabilities Act.

In support of the NFI, the Office of Disability

Employment Policy (ODEP) was created at

DOL in 2001. The mission of ODEP is to provide leadership to increase employment

opportunities for adults and youth with disabilities. ODEP was funded at approximately

$47 million in Fiscal Year 2004.

america’s dynamic workforce

As the table below shows, Hispanics and

Asians are the fastest-growing racial and ethnic groups in the workforce. Immigration is a

significant driver of this labor force growth,

particularly since immigrants include many

young adults of working age who have come

to the United States in search of better job

opportunities and higher wages. These factors

contribute to the growing diversity of the U.S.

population and labor force.xi

People with Disabilities

More than a decade after passage of the

Americans with Disabilities Act, the employment rate of people with disabilities remains

low. According to the U.S. Census Bureau,

about 50 million Americans of all ages have 

a disability. Among working age adults, only

about 60 percent of men and 51 percent of

women with disabilities were working in

2000.xii

Although people with disabilities have lower

employment rates than those without disabilities, once on the job, the two groups do not

differ fundamentally in the nature of their

working conditions. One of the few ways in

*Asian and other includes (1) Asians and Pacific Islanders and (2) American Indians and Alaska Natives.

**Hispanics can be of any race; most report that they are white. 

Source: Mitra Toossi, “A Century of Change: the U.S. Labor Force, 1950-2025,” Monthly Labor Review, May 2002.
In addition, DOL’s Employment and Training

Administration provides $20 million in incentive grants to assist workers with disabilities in

accessing the full spectrum of re-employment

services offered at One-Stop Career Centers

across the nation.

Veterans

Approximately 23.7 million Americans, or

nearly 11 percent of U.S. labor force, are veterans. The 2000 Census found that most veterans are employed. Among veterans serving

in August 1990 or later, 81 percent were

employed, while 83 percent of those who

served from September 1980 to July 1990

were employed.xiv

According to BLS, veterans discharged from

active duty between January 2001 and August

2003 had a labor force participation rate of 89

percent and an unemployment rate of 6.9 percent in August 2003. As a whole, veterans

had an unemployment rate of 4.5 percent,

compared with 5.9 percent for nonveterans.xv

The mission of the Veterans’ Employment and

Training Service at DOL is to provide veterans

with resources and services to succeed in the

21st Century workforce by maximizing their

employment opportunities and protecting their

employment rights. 

Productivity

High labor productivity is one of America’s

strongest assets. Increased productivity benefits workers through higher compensation and

lower prices. From 1990 to 1995, labor productivity grew at an average annual rate of 1.6

percent. (See Chart 1.5.) That rate increased to

2.5 percent between 1995 and 2000, and

reached a 3.7 percent annual rate of growth

between 2000 and 2003. This escalation in

productivity growth is remarkable by historical

standards. From the first quarter of 2001 to

the first quarter of 2004, productivity increased by a total of 14.1 percent—the fastest

three-year growth in 40 years.

Technology is a key contributor to this tremendous productivity growth. Not only has productivity grown within the information technology sector itself, but technological advances have increased productivity in many

sectors of the economy. The use of modern

technology has increased efficiency economywide, from manufacturing processes to inventory management. Technology is widespread

in the workplace and computers have become

an indispensable business tool. More than half

of all Americans use a computer on the job.xvi

High productivity makes U.S. workers attractive to foreign companies and is one reason

why foreign companies do business in the

United States. As Americans produce more

goods and services per worker than anyone

else in the world,xvii our workforce becomes

appealing to foreign companies. It is estimated that foreign-owned firms directly employ

chapter one

9
“

10

about 6 million workers in the United Statesxviii

and indirectly employ millions of others.

Compensation

Job growth due to foreign investment is not the

only benefit workers reap from high productivity. Productivity growth can also increase

workers’ earnings, particularly in tight labor

markets. As workers produce more, employers

may compensate them for their higher productivity. Accordingly, real average hourly earnings (i.e., earnings adjusted for inflation) have

risen since the mid-1990s. 

Earnings are only part of the compensation

picture. Workers are receiving a growing portion of their compensation in the form of benefits rather than wages, with benefits now

contributing 30 percent to total compensation

costs. From 1979 to 2003, the cost of wages

and salaries increased 17.2 percent, while the

cost of benefits grew 55.1 percent over the

same period. Since 2000, the over-the-year

gains in benefit costs have strongly outpaced

the gains for wages and salaries. 

america’s dynamic workforce

“

Promoting Flexibility for a Changing Workforce 

T

hese are exciting times for our country. It's a time of amazing change. The economy is changing. The world is changing...We need to make sure government changes with the times, and

to work for America's working families.

- President George W. Bush, July 30, 2004

Today's workforce has changed dramatically over the last 50 years. More parents are working

now than ever before. But many of the nation’s labor laws were designed a generation ago.

Provisions in these laws do not fit today’s changing workplace, and do not give workers the flexibility to spend more time with their families.

President Bush has called on Congress to pass legislation giving American workers more options to

help families better juggle the demands of work and home through comp-time and flex-time. 

Comp-Time enables employees to choose paid time off as an alternative to overtime pay.

Therefore, a worker who opts for comp-time and works 8 hours of overtime is entitled to 12 hours

off (1.5 hours off per every hour of overtime).

Flex-Time gives an employee the option of "flexing" his or her schedule over a pay period, by scheduling more than 40 hours of work in one week, and then scheduling less than 40 hours in the following week. For example, an employee may request to work 48 hours one week in a two-week pay

period to offset a paid day off during the following week to chaperone a child's school trip.

The President’s plan would ensure employee protections by making the program voluntary and

honoring collective bargaining agreements.
Prices

In addition to paying workers more, rising productivity also means that businesses can produce goods and services at a lower cost. This

translates into lower prices for consumers. Consequently, inflation has remained low and stable. The Consumer Price Index (CPI) increased

just 2.3 percent during 2003.xix The core CPI

(which excludes food and energy) rose only 1.4

percent during 2003, considerably below the

2.4 percent increase of the previous year.

When workers encounter both larger paychecks and lower price tags, they are able to

afford more goods and services for their families. In this way, productivity growth generates a higher standard of living for Americans.

The Outlook

The economy is showing many signs that the

expansion in employment and the favorable

labor market conditions will continue. In the

manufacturing sector, new orders for manufactured durable goods during the first seven

months of 2004 were 12.4 percent above the

same period a year ago. Industrial production

had its largest quarterly increase in nearly four

years with a 6.7 percent increase during the first

quarter of 2004. Manufacturing employment

began to reverse a 42-month decline in employment, adding 91,000 jobs since January 2004.

In July 2004, capacity utilization — the

amount of potential production capacity used

by firms—remained near its highest level since

May 2001, and increased 2.6 per- centage

points since July 2003. The Insti-tution for

Supply Management (ISM) manufacturing

employment index indicated employment expansion for the ninth straight month in July 2004.

Household spending continues to be strong,

pointing to a continued growth in employment necessary to fill consumers’ shopping

baskets. Housing has also been strong,

which is increasing the demand for workers

in construction and related sectors. Housing

starts remained near their highest level in

almost 20 years. New single-family home

sales hit a new record high in May 2004.

Americans’ confidence about the future can

be seen in the results of two recent surveys,

which confirm that Americans are confident

about the economy’s future. The Conference

Board’s survey of consumer confidence rose

in July, and the University of Michigan’s index

of consumer sentiment remains above its average 2001, 2002, and 2003 levels. The jobs

recovery that began in 2003 is expected to

continue for the foreseeable future.

Conclusion

Despite a recession and the onset of a bear

market in 2000, corporate accounting scandals

and the most destructive terrorist attacks in history, the U.S. economy has persevered and

again boasts of a strong labor market with low

unemployment and vast opportunity for all

American workers. These economic opportunities will only continue to grow in the future. 

chapter one

11

The jobs recovery that began in 2003 is expected to

continue for the foreseeable future.
12

Notes

i BLS, Occupational Outlook Quarterly (Winter 2003-04).

ii BLS, Current Population Survey.

iii President Bush, Women Entrepreneurship in the 21st Century Conference (March 19, 2002).

iv U.S. Census Bureau, “Women-Owned Businesses: 1997” (October 2001). The number of women-owned firms increased 16 percent from

1992 to 1997, compared to a 6 percent increase for U.S. firms in general, excluding publicly held corporations.

v U.S. Small Business Administration, http://www.sba.gov/financing/special/women.html.

vi U.S. Census Bureau, “Fertility of American Women: June 2002,” October 2003.

vii Donna S. Rothstein, “Youth Employment in the United States,” Monthly Labor Review (August 2001).

viii BLS, “Number of Jobs Held, Labor Market Activity, and Earnings Growth among Younger Baby Boomers: Recent Results from a Longitudinal

Survey” (August 25, 2004).

ix Mitra Toossi, “Labor Force Projections to 2012: The Graying of the U.S. Work Force,” Monthly Labor Review (February 2004). 

x Mitra Toossi, “A Century of Change: the U.S. Labor Force, 1950-2050,” Monthly Labor Review (May 2002).

xi Mitra Toossi, “A Century of Change: the U.S. Labor Force, 1950-2050,” Monthly Labor Review (May 2002).

xii U.S. Census Bureau, “Disability Status: 2000” (March 2003). People were defined as having a disability if one or more of the following conditions were true: (1) they were aged 5 or older and responded “yes ” to a sensory, physical, mental, or self-care disability; (2) they were aged 16

years or older and responded “yes ” to a disability affecting going outside the home; or (3) they were between the ages of 16 and 64 and

responded “yes ” to an employment disability.

xiii Edward H. Yelin and Laura Trupin, “Disability and the Characteristics of Employment,” Monthly Labor Review (May 2003).

xiv U.S. Census Bureau, “Veterans: 2000” (May 2003).

xv BLS, “Employment Situation of Veterans: July 2004.”

xvi Steven Hipple and Karen Kosanovich, “Computer and Internet Use at Work in 2001,” Monthly Labor Review (February 2003).

xvii BLS, Office of Productivity and Technology, “Comparative Real Gross Domestic Product Per Capita and Per Employed Person, Fourteen

Countries, 1960-2002” (July 29, 2003).

xviii William J. Zeile, “U.S. Affiliates of Foreign Companies: Operations in 2001,” Survey of Current Business, Bureau of Economic Analysis,

August 2003, pg. 45. William J. Zeile, “Operations of U.S. Affiliates of Foreign Companies: Preliminary Results from the 2002 Benchmark

Survey,” Survey of Current Business, Bureau of Economic Analysis, August 2004, pg. 199

xix The Consumer Price Index for All Urban Consumers (CPI-U), Seasonally Adjusted.

america’s dynamic workforce
The United States enjoys a dynamic economy

where workers have the ability to change jobs

frequently. Nearly all participants in the labor

force switch jobs at some point. Several

decades ago, U.S. workers on average would

spend their entire careers with one or two

employers. In contrast, younger Baby

Boomers (people born between 1957 and

1964) held an average of 10.2 jobs from ages

18 to 38. This trend is almost certainly here to

stay.i 

Job turnover allows workers to move up the

income ladder as they find new and better

paying jobs. Understanding labor force

turnover requires an understanding of the

forces that influence it: wages, employee benefits, working conditions, worker confidence,

and reactions to business cycles.

One reason that many people wish to come to

the United States is the high potential for

income mobility. In America, the relative

ease of finding a job makes it easier to move

up the income ladder.

Dynamic economic opportunity is one of the

many advantages of the U.S. economy. The

mobility and vibrancy of America’s workforce

brought America from recession to recovery.

And income mobility remains an important

measure of an individual’s prospect for improving his or her economic situation. In a labor

market as vibrant as America’s, individuals

who start at lower income levels can look forward to working up to higher income levels.

Turnover and Income Mobility

Everyone wants to get paid more for the work

that they do, and there are two ways to do so.

Either workers can get raises in their existing

jobs, or they can change jobs and earn more

in a new position. Many workers move up

the income ladder by changing from one job

to another. There is substantial turnover and

labor mobility in the labor force. The existence of both of these in the U.S. economy is

not coincidental.

Opportunity, as signaled by income mobility,

is one of the most important considerations in

an economy. According to many studies,

American workers continue to enjoy substantial wage and income mobility, especially

upward mobility. Income gains typically

occur over time for most groups. 

Extensive research has been targeted at determining the income mobility of American workchapter two

13

chapter two

changing jobs 

and moving up the income ladder
14

ers and families. Surveys track people’s incomes (and other demographic information) across a given time span from 1 to 20 years. At

the beginning, and at subsequent regular intervals within the survey’s duration, each person’s

income is ranked (either in comparison to the

rest of the study sample, or to the whole population) and the ranks are grouped into standard

income groups entitled “quintiles.” The result

of the basic approach allows a researcher to trace

the portion of each original group that moved

up or down the income scale in later intervals. 

These studies find that income mobility

remains substantial in the United States.

Different approaches have led to varying

determinations of the degree, distribution, and

meaning of observed mobility, to be sure.

However, the consensus remains that

American workers continue to experience significant relative movement throughout the

income distribution. 

The results and key findings of several empirical studies examining income mobility in the

United States are presented here to demonstrate this consensus regarding American

workers’ individual economic potential. In

addition to these general studies, we present

several research efforts aimed specifically at

low-wage earners’ mobility.

General Income Mobility

Most research into the income mobility of

American workers relies upon data panels that

follow people over time. These panels are

constructed from government records or surveys. The studies either examine matched tax

return data, long-term panel survey databases,

or short-term Census Bureau reports. Though

nearly all approaches yield conclusions of

high mobility in general, the disparity in data

and methodology contributes to the observed

difference in the degree and concentration of

mobility. 

Two major studies explored income mobility

by studying official tax return records. First,

the U.S. Treasury Department’s Office of Tax

Analysis measures individual income mobility

using a panel of individual income tax return

data.ii Specifically, the tax returns of 14,351

individuals (who filed returns each year during the period examined) were tabulated over

a ten-year period to determine each individual’s income rank relative to the rest of the

sample each year. 

The Treasury study shows a clear picture of

high inter-quintile mobility for the vast majority of workers. In particular, using a sample

that includes a wide range of ages, mirroring

the workforce as a whole, the Treasury study

america’s dynamic workforce

An economy that allows for labor market 

flexibility creates greater opportunities for its

workers and contributes to more income mobility.
found that nearly 86 percent of those in the

lowest income quintile at the beginning of

the period had moved to a higher quintile

ten years later, and were more likely to move

to the highest quintile than to stay in the

lowest. Fewer than 65 percent of those in

the highest bracket at the beginning of the

period remained there at the end. 

In the middle brackets, no more than 40 percent of individuals remained in the same quintile in ten years. The findings clearly affirmed

the high level of income mobility extant across

income brackets.

Income tax records are only one of several data

sources available to track income mobility. A

number of research efforts have analyzed

income mobility by utilizing data from the

University of Michigan’s Panel Study of Income

Dynamics (PSID) database. In one noted study,

researchers tracked groups of people over two

ten-year periods. On average, 60 percent

moved income quintiles.iii

The PSID research did reflect less movement

from the lowest quintile to the fourth or fifth

bracket. In particular, whereas two-fifths of

those in the first quintile at the beginning of

the Treasury study reached the highest two

quintiles in nine years, between 8 and 11 percent did so in the PSID samples. However,

the overall degree of movement from all

brackets was slightly higher than in the Treasury study.iv

Federal Reserve Bank of Dallas researchers

tracked a sample of nearly 4,000 individuals

in the PSID database for 17 years. In a

notable improvement over studies using official tax data like the Treasury study, the

chapter two

15
Federal Reserve researchers were able to

include data on unemployed, laid off, and

retired individuals, as well as students.v

The results of the Dallas Fed study were even

more remarkable than prior studies. Nearly

70 percent of all individuals moved one

quintile or more, and 36 percent moved two

or more brackets. Most strikingly, almost 95

percent of those in the lowest quintile in

1975 had moved upward by 1991, along

with 72 percent from the second quintile.

For every person who remained in the lowest

quintile, six moved to the highest fifth. 

Though the observed mobility was undoubtedly higher in the Federal Reserve study due

to the length of the study, researchers also

discovered that over one-half of the first

quintile at the beginning of the study had

reached the highest three brackets in less

than four years. The data also reflected

much more upward mobility compared with

downward movement: of those individuals

who did move one or more quintiles, 72.9

percent moved up in the income distribution,

while less than a third moved down.

Some say that including students and the unemployed, as did the researchers in the Federal

Reserve study, exaggerate the degree of income

mobility in the United States. However, given

that commonly used data on income distribution include students and the unemployed,

leaving out these individuals in a study of

income mobility would be a serious omission.

america’s dynamic workforce

16
No one suggests leaving the unemployed out of

income distribution calculations—for the same

reason, they should not be left out of income

mobility studies.

Boston College

Professor Peter

Gottschalk reexamined the basic elements of the Dallas

Federal Reserve

study two years

later.vi Within the

context of a broader

discussion on

inequality in the

United States,

Gottschalk revisited

the same time window within the

PSID dataset. The

mobility figures

from both studies are “certainly high enough

to make the point that people are not stuck at

the bottom or the top of the earnings distribution.”vii In particular, nearly 68 percent of the

bottom quintile’s members moved up during

the study, and more than a fifth of the bottom

quintile reached the upper two quintiles.

Barely half (53.9 percent) of the highest quintile’s members remained by the end in 1991. 

Examining mobility from a different angle, the

Census Bureau used the Survey of Income and

Program Participation (SIPP) records to determine the degree of volatility in individuals’

economic well-being as measured by the

change in the ratio of their income to the prevailing poverty standard.viii The study indicated

that between 1985 and 1994, at least threefourths of the population saw their income-topoverty ratio increase or decrease by at least 5

percent. This shows that people do not

remain in one income group, but move

around. The Census report also examined

correlations of positive and negative

changes in incometo-poverty ratios with

changes in income

source, education,

and family status.

Additionally, the

study indicated that

of those with an

income-to-poverty

ratio of 1.00 or lower

in 1993, more than

half (52.7 percent)

saw that ratio increase by 5 percent

or more within a

year.ix

Mobility of Low-Income Workers

Though income mobility for the population at

large is both important and sizable, the

income mobility of low-wage workers is of

greatest concern in domestic and international

policy debates. Of particular interest is

whether people who start close to the bottom

of the income scale move up. Consequently,

there have been many studies on minimumwage-earner income mobility over the past

ten years. 

These show that even the lowest wage earners

experience a high degree of mobility, though

the extent of that mobility may depend upon

individual choices, such as completion of

high school. Economists Ralph Smith and

Bruce Vavrichek examined SIPP data on minichapter two

17

. . . even the lowest

wage earners experience a high degree of

mobility, though the

extent of that mobility

may depend upon individual choices. . . .
18

mum wage workers from 1983 to 1987 and

discovered that 63 percent of minimum wage

workers increased their wage within a year,

and 40 percent did so in four months of first

receiving the minimum wage. Additionally,

the data showed that both sexes were equally

likely to receive wage increases.x

Professor James Long of Auburn University

used the same SIPP

variables from an

updated set of samples (1992-93 panels) to calculate the

wage and employment transitions

experienced by minimum wage workers.xi

Though fewer than

70 percent of minimum wage workers

were still receiving

hourly wages (voluntarily left employment or became

salaried employees),

more than four-fifths

of those who

remained were receiving higher wages in two

years. The average wage increase within a

year was 30.6 percent, and 40.3 percent within two years. As well as examining geographic and demographic factors related to wage

gains, Long discovered that those who completed high school were more likely to see

wage gains than those who did not receive

their diploma.xii 

Professors William Even of Miami University

and David MacPherson of Florida State

University employed a slightly different

approach in their research, using CPS

Outgoing Rotation Group matched data panels from 1979 to 1998.xiii Significantly, their

research made clear that a majority of all

workers aged 16 to 65 remain at the minimum wage for less than a year. 

Even and MacPherson showed that for those

in the lowest income quintile, the incidence

of increasing one’s

wages was positively correlated with

the number of hours

worked each

week.xiv However,

even those working

fewer than nine

hours per week

benefited from a

median wage

increase of nearly 7

percent, while those

without a high

school diploma saw

an 8 percent median increase. In further research, Even

and MacPherson

determined that the minority of workers that

did not enjoy significant wage growth within

a year were often employees who had

switched jobs or industries, frequently necessitating new training.xv

American workers continue to experience

significant income mobility, a circumstance

that has not dramatically changed over several decades. Data controlling for different

factors still demonstrate significant upward

and downward income mobility for the

United States.

america’s dynamic workforce

. . . American workers

continue to experience 

significant income

mobility, a circumstance

that has not dramatically

changed over several

decades.
Conclusions

The dynamism of our economy

is reflected in a high degree of

job turnover. Out of a labor

force of 147 million, there were

47.1 million separations and

48.5 million new hires in 2003.

Data show that the American

labor economy is constantly

changing and adapting to market

conditions and new policies. 

While some job turnover is

involuntary, more often turnover is the result of people

seeking and finding better jobs. Turnover is associated with the

sustained level of mobility that

has made the United States an

attractive place to work.

Maintenance of income mobility over an extended time

frame—nearly half a century by

consensus—is an accomplishment of U.S. workers and institutions that create opportunities. Combined with evidence

on job turnover, this shows 

that many American workers

will better themselves by

changing jobs. 

Seeing our labor force as

dynamic, rather than static, illustrates the opportunities that are

provided by entering the workforce. An economy that allows

for labor market flexibility creates greater opportunities for its

workers and contributes to more

income mobility.

chapter two

19
20

america’s dynamic workforce

Notes

i BLS, “Number of Jobs Held, Labor Market Activity, and Earnings Growth among Younger Baby Boomers: Recent Results from a Longitudinal

Survey” (Aug. 25, 2004).

ii U.S. Department of the Treasury, Office of Tax Analysis, “Household income mobility during the 1980s: A statistical assessment based on tax

return data,” Tax Notes 55, no. 9, special supplement (June 1, 1992).

iii Isabel V. Sawhill and Mark Condon, “Is U.S. income inequality really growing? Sorting out the fairness question,” The Urban Institute, Policy Bites

13 (June 1992). The size of the Sawhill-Condon sample was not reported in available published versions of their research.

iv Ibid.

v W. Michael Cox and Richard Alm, “By our own bootstraps: Economic opportunity and the dynamics of income distribution,” Annual Report, U.S.

Federal Reserve Bank of Dallas (1995): 2-24.

vi Peter Gottschalk, “Inequality, income growth, and mobility: Basic facts,” Journal of Economic Perspectives 11, no. 2 (Spring 1997): 21-40.

vii Ibid, 37.

viii Wilfred T. Masumura, “Moving up and down the economic ladder.” Current Population Reports: Household Economic Studies: Dynamics of

Economic Well-Being: Income, 1993 to 1994, U.S. Census Bureau (July 1998).

ix Ibid.

x Ralph E. Smith and Bruce Vavrichek, “The wage mobility of minimum wage workers,” Industrial and Labor Relations Review 46 (Oct. 1992): 82-88.

xi James E. Long, “Updated estimates of the wage mobility of minimum wage workers,” Journal of Labor Research 20, no. 4 (Fall 1999): 493-503.

xii Ibid.

xiii William E. Even and David A. Macpherson, “Rising above the minimum wage” Employment Policies Institute Study (Jan. 2000).

xiv Ibid.

xv William E. Even and David A. Macpherson, “The wage and employment dynamics of minimum wage workers.” Southern Economic Journal 69,

no. 3 (Jan. 2003): 676-690.
The global economy requires American workers to compete with those of other countries.

It also requires a careful analysis of how our

labor market competes with those of other

countries. This chapter provides valuable

comparative information that can be used to

illustrate the economic and labor market performance of the United States relative to other

G-7 countries: Canada, Japan, France, Germany, Italy, and the United Kingdom. By

looking at all aspects of our workforce —

employment levels, jobless rates, labor

market flexibility measures, and hours

worked — we see the many advantages of

the U.S. economy.

Using data from the most current years for

which internationally comparable data are

available, we show that the United States

performs well. America has achieved low

unemployment, low taxes, and substantial

labor and product market flexibility.

Percent of Population Working 

The question of how many people are

working is vital to an economy’s wellbeing. Are there enough jobs so that those

who choose to work can do so? Can unemployed people quickly find a job? Is the number of jobs increasing? Although there may be

people who choose not to have paid employment, such as parents, retirees, or lottery winners, the availability of employment for those

who want it is a tremendous advantage. 

The employment-population ratio measures the

proportion of the working-age population that

is employed. It is particularly helpful in discerning whether job growth is keeping pace

with population growth. 

In 2003, 62.3 percent of the U.S. working-age

population was employed. (See Chart 3.1.)

chapter three

21

chapter three

comparing the 

united states with other countries
22

This was higher than Japan and especially countries in continental Europe.

The ratio was 51.7 percent in France,

50.9 percent in Germany and 44.6 percent in Italy. The United States has

had a higher employment-population

ratio than Europe since 1967, and a

higher ratio than Japan and Canada

beginning in 1994. (See Chart 3.2.) In

fact, the ratio in Japan has been falling

throughout most of the 1990s. 

In general, employment growth is

much stronger in the United States and

Canada than in the other G-7 countries. (See Chart 3.3) It is very weak in

Japan, where employment has diminished over the past five years, nearly

returning to its 1990 level, with people

moving out of the labor force.

Unemployment Rates

In the first quarter of 2004 the unemployment rate varied widely among the

G-7 countries, from around 5 percent in

the United Kingdom and Japan to 9.3

percent in France and Germany in first

quarter of 2004. (See Chart 3.4.) The

unemployment rate was 5.6 percent in

the United States. Among the G-7

countries, only Japan and the United

Kingdom had lower unemployment

rates than the United States. 

The more robust employment situation

in these three countries is supported

by the duration of unemployment figures in Chart 3.5. In 2003 long-term

unemployment of six months or

longer was lowest in Canada at 18.6

percent of total unemployment, followed by the United States at 22.0

america’s dynamic workforce
percent and the United Kingdom at 37.3 percent. At the other end of the spectrum, 74.1

percent of unemployed Italians were unemployed for six months or more.

When looking at those unemployed longer

than a year, in 2003 only 11.8 percent of

unemployed U.S. workers were unemployed

for longer than a year, compared with 23.0

percent in the United Kingdom, and 58.2 percent in Italy.

Italy, followed by Germany, had the

highest share of long-term unemployed under either measure. For

example, nearly three-fourths of the

unemployed in Italy, and more than

two-thirds in Germany, were unemployed for six months or longer.

Taxes and Hours of Work

Americans work more. In 2003 annual

hours worked were lowest in Europe,

especially in Germany and France, and

highest in Japan, followed by the

United States. Annual hours of work in

each of the G-7 industrialized countries declined between 1990 and 2003,

but Japan and the United States were

significantly ahead in terms of work

hours. (See Chart 3.6.)

There are two possible reasons for the

decline in annual hours worked. As

people become better off, they may

choose more free time to more

income. Second, as taxes collected

by the government increase, the

incentive to work may be adversely

affected.

American businesses and workers pay

less in taxes. The Organization for

Economic Cooperation and

Development (OECD) publishes annually a useful concept termed the “tax

burden on labor.” The tax burden on

labor is the difference between what

employers pay out in wages and

social security charges and what

employees take home after tax and

social security deductions plus cash

benefits. (Taxes on labor exclude

chapter three

23
value added taxes and

other indirect taxes that

are paid by workers in the

price of the goods that

they purchase.) The tax

burden is a measure of

how much an employer

pays out in wages and

taxes minus worker’s takehome pay. It is equivalent

to the sum of the taxes

paid on labor by the

employer and the worker. 

Chart 3.7 shows that in

2003, the tax burden of the

G-7 countries was lowest

in Japan at 27 percent, followed by the United States

at 29 percent. It was the

highest in Germany at 52

percent. This was the case

even though all of the G-7

European countries have

been reducing taxes on

labor.

Chart 3.8 shows changes

in the tax burden in the G-7

countries between 1996

and 2003. All but two

countries showed lower

taxes. The United States

posted the largest decline

at 8.3 percent. Italy and

the United Kingdom had

declines of 8.2 and 7.0

percent respectively. In

contrast, the relative tax on

labor increased in Japan by

2.3 percent and in Canada

by 0.6 percent.

america’s dynamic workforce

24
Labor and Product

Market Flexibility

Chart 3.9 shows an OECD

index of labor market flexibility in the G-7 countries in

2003. In this index, labor

market flexibility is measured by the extent of regulations governing the hiring

and firing of workers. These

rules are termed employment protection legislation

(EPL). The following factors

are considered: the extent

of procedural requirements

that employers must follow

in dismissals; notice and

severance pay requirements;

and the degree of regulation

of temporary forms of

employment. 

The index ranges from zero

(no restrictions) to six (very

restrictive). By these measures, the United States has

the most flexible labor markets, followed by Canada

and the United Kingdom.

France and Germany have

the most restrictive labor

markets. 

Chart 3.10 shows product

flexibility measures on the

same index for 1998.

Product market flexibility is

measured by the extent of

industry regulation. It is

based on a simple average of

chapter three

25
26

indicators for seven industries in 1998, where

each industry is rated from zero (no restrictions) to six (very restrictive). The industries

are as follows: gas; electricity; postal and

courier activities; telecommunications; air

transportation; railroads; and road freight.

These industries are not comprehensive in

describing the economy, but they largely focus

on infrastructure and thus indicate the bureaucratic ease of moving goods and resources

from producers to consumers.

Depending on the industry, the following factors were considered: barriers to entry; public

ownership; market structure; vertical integration; and price controls. Barriers to entry are

essential since they affect job creation through

the level of regulation surrounding entrepreneurship. The United Kingdom had the lowest

index of product market flexibility, followed by

the United States. Italy, France and Japan had

the most restrictions on product markets.

america’s dynamic workforce
Conclusion

There are considerable differences among G-7

labor markets. Continental European countries

and at times, Japan are characterized by slower

growth, higher taxes, and more regulation. In

contrast, the United States, followed by Canada

and the United Kingdom, leads a group that

can typically be characterized by stronger

growth, less taxes, and fewer regulations on

labor and industry. These differences help the

U.S. economy, and others structured like it,

react faster to economic cycles, provide greater

opportunities to workers, and extend prosperity

to a greater share of the population.

chapter three

27

T

he Bush Administration seeks to open markets for the goods and services produced by American workers, to make sure that American workers are able to compete on a level playing

field, and to ensure that American workers have the tools and training they need to compete.

■ Opening Markets: President Bush has sought every opportunity to open new markets for 

American workers’ goods and services. The Administration

■ Worked with Congress to pass Trade Promotion Authority, after an eight-year lapse. 

■ Launched with 147 other economies the Doha negotiations to open markets worldwide 

through improved World Trade Organization commitments. 

■ Signed or completed free trade agreement (FTA) negotiations with 10 countries and has 

launched or will soon begin FTA negotiations with 11 more countries.

■ Trade Enforcement: The Bush Administration has worked to ensure a level playing field for 

American workers and farmers through these new 

trade agreements and has used every tool available to ensure that other countries live up to their 

commitments. For instance, in April, the Administration resolved eight trade disputes with China 

and Korea, clearing the way for American workers’ goods and services.

■ Help for Trade-Affected Workers: President Bush 

signed into law the new Trade Adjustment 

Assistance Act, which provides the most generous benefits ever to an expanded range of 

workers affected by trade. This assistance includes a 65 percent tax credit for health care and 

up to two years of training and income support.

helping the less fortunate

One of the greatest strengths of the American

economy has been its consistent ability to

adapt and capitalize on new opportunities.

Today, rapid technological changes are

reshaping the economic landscape, and

America’s workforce is evolving to compete in

this new environment. These transformations

and new innovations, coupled with America’s

entrepreneurial spirit, will create a new and

previously unimaginable world of jobs. 

The short-term effect of economic change,

particularly the loss of a job, however, can be

hard on workers, families, and communities.

Workers need help adjusting to these economic changes. Strong economic safety net programs give workers temporary financial support, and reemployment services help workers

return to work as quickly as possible. Over

the past several years, the Administration has

worked on both these fronts to alleviate the

difficulty associated with a lost job. 

Compassionate 

Economic Development Programs

The Administration invests in training the

workforce for the future. The workforce

investment system is an essential economic

development tool with social benefits.

Through a variety of programs, the Administration has proposed initiatives to speed 

up the delivery of unemployment assistance,

which in many past cases used to come 

too late. 

The Department of Labor administers three

programs that provide vital support to workers

and communities affected by unemployment:

the Unemployment Insurance (UI) program;

the Trade Adjustment Assistance (TAA) program; the Workforce Investment Act and related training programs, including National

Emergency Grants. The Department of Labor

spends $10.5 billion per year on these programs. States also contribute by paying UI

benefits. This chapter presents the UI and

TAA programs. The Workforce Investment Act

is described in Chapter Seven.

The Unemployment Insurance

Program

The mainstay of federal aid to unemployed

workers is the Unemployment Insurance program, which was established in the Social

chapter four

31

chapter four

our compassionate nation: 

helping workers transition to new jobs
32

Security Act in 1935. It is designed

to provide temporary, partial wage

replacement to individuals who are

laid off. The UI program is the first

line of defense in economic downturns and provides an economic

stop-gap for laid-off workers. (See

Chart 4.1.) 

The depth and breadth of the UI program make it one of the most well

known parts of our nation’s safety net.

Almost all wage and salary workers

are covered by UI, and states generally provide up to 26 weeks of benefits.

In 2003, 9.94 million unemployed workers

collected benefits. The average weekly benefit amount was $262, and the average duration was 16.4 weeks. In total, $41.47 billion

in regular benefits were paid. Additional benefits were provided under the Temporary

Extended Unemployment Compensation program.

Special Unemployment Insurance

Programs 

Advances to States

When a state determines that it will have an

insufficient balance to pay its unemployment

benefits, the governor may request an

advance from the Secretary of Labor.

Following the recent economic downturn,

eight states exhausted their unemployment

fund balances and received federal advances.

One additional state has requested and

received authorization to borrow but has not

done so yet.

Extended Benefits

Since 1970, federal law has provided for the

extension of the duration of UI benefits when

states experience periods of high and rising

unemployment. Upon reaching certain specified unemployment levels, states must extend

benefit duration by 50 percent, up to 13

weeks of Extended Benefits, for a total of up

to 39 weeks. In certain high unemployment

states, unemployed workers can receive up to

7 more weeks of benefits for a total of 46

weeks. The cost of Extended Benefits is

shared equally by the federal government and

the states. During the last economic downturn, unemployed workers in five states

received Extended Benefits. By mid-2004,

state unemployment rates had fallen to levels

such that no states were disbursing Extended

Benefits.

Temporary Extended Unemployment

Compensation

In periods of national recession, when many

states are affected by high and sustained

unemployment, special federally funded programs of supplemental benefits have often

america’s dynamic workforce
been adopted. In March 2002, the Temporary

Extended Unemployment Compensation

(TEUC) program was established. Upon

exhaustion of regular UI benefits, eligible

unemployed workers in all states received up

to 13 weeks of TEUC for a total of 39 weeks

of benefits. Workers in high-unemployment

states were eligible for an additional 13 weeks

beyond the regular 39 weeks.

Temporary Extended Unemployment 

Compensation for Airline & Related

Workers

Because of the particularly negative effect of

the downturn in the airline industry,

Temporary Extended Unemployment

Compensation for Airline and related workers

(TEUC-A) was established in April 2003.

TEUC-A provided 26 additional weeks of

TEUC benefits in all states to airline and related workers who were unemployed due to the

terrorist attacks on September 11, 2001, a

security measure taken as a result of the

attack, or the war in Iraq. 

Through March 31, 2004, $23.1 billion in

TEUC and TEUC-A benefits were paid to 7.8

million unemployed workers.

Reed Act Distribution

In addition to establishing TEUC in 2002, the

Federal government distributed $8 billion to

state accounts in the Unemployment Trust

Fund (UTF) via a special Reed Act distribution. The Reed Act provides that when three

federal accounts in the UTF reach their ceilings, surpluses are distributed to the states.

This special distribution provided funds without regard to the federal accounts’ ceilings.

States were given the flexibility to use these

funds to pay benefits under current law,

chapter four

33
expand benefits within certain limits, pay for

UI administration, and enhance reemployment services. 

According to a March 2003 report by the U.S.

General Accounting Office (GAO), as a result

of this distribution, nine states enacted benefit

enhancements such as increasing the weekly

benefit amount and modifying eligibility

requirements so more recent entrants to the 

labor market would be eligible to receive UI

benefits. The GAO report also indicates that

without the Reed Act distribution, tax rates for

2003 would likely have been higher in 26

states. In addition, Department of Labor

records show that five states established special programs for benefit exhausters. Finally,

over $1 billion has already been appropriated

for administrative purposes, including automation upgrades.

34

Disaster Unemployment Assistance

The Robert T. Stafford Disaster Relief and

Emergency Assistance Act authorizes the

President to provide assistance to any individual

unemployed as a result of a major disaster. 

As a result of the terrorist attacks on

September 11, 2001, $13.6 million in DUA

benefits were provided to about 3,300 eligible

individuals in New York and $310,000 was 

provided to about 320 eligible individuals in

Virginia. In addition, DUA benefits totaling

$2.9 million were provided to about 3,300

eligible individuals in North Carolina,

Virginia, and Delaware because of the effects

of Hurricane Isabel in September 2003. 

After Hurricane Charley in August 2004, ETA

administered DUA benefits in Florida. Approximately 42,000 people were expected to benefit.

america’s dynamic workforce

Clara M. Nickerson is currently studying

to become a nurse after losing her job

due to a plant relocation. As a single

parent, she states that it would not be possible to do this without the Trade Program to

provide training and income support.

U.S. Department of Labor

Office of National Response
Current Unemployment Insurance

Initiatives

Unemployment Insurance Financial

Integrity

For several years the Department of Labor has

been examining ways to reform the UI program so that it reflects the 21st Century economy and workforce.

The Administration included in its 2005 budget request a three-pronged proposal that will

strengthen the financial integrity of the UI program by: 

(1) Curtailing unscrupulous employer tax 

avoidance; 

(2) Improving prevention and quick 

detection of benefit overpayments; and

(3) Collecting past overpayments by offsets 

from federal income tax returns. 

The first two have been passed by Congress.

Reducing Tax Avoidance

On August 9, 2004, the President signed the

SUTA Dumping Bill that closed a loophole in

many state UI laws that allows some employers to pay less than their fair share of state

unemployment taxes.

All states calculate employers’ unemployment

tax rates based on experience. If an employer

has a stable workforce with few layoffs, the

charges and tax rate are low. Employers with

higher turnover generally pay higher taxes up

to a maximum set by state law. 

Over the past several years, some employers

have found ways to manipulate their experience

rating so that they pay lower state UI taxes than

chapter four

35
they should based on their UI benefit experience. For example, some create a new “shell”

company that establishes a lower UI tax rate,

and then transfer some or all of their payroll to

the new company. This abusive practice is

commonly called “SUTA dumping” (“SUTA”

refers to state unemployment tax acts). 

SUTA dumping can deprive states of revenues

they need to provide workers the unemployment benefits to which they are entitled under

state law, and it shifts some benefit costs to

other employers. Enactment of this proposal

is projected to result in UI tax payments of

over $200 million per year from employers

who would otherwise engage in SUTA dumping. 

National Directory of New Hires Database

On the other side, workers sometimes receive

unemployment benefit overpayments. Detection

and prevention of improper UI payments is a

high priority for the Administration because

these overpayments are a drain on the state UI

trust funds, threatening benefits of needy unemployed workers. The Department’s Employment

and Training Administration reached an agreement with the Social Security Administration

granting states access to the SSA database, and

giving SSA access to UI wage records. 

america’s dynamic workforce

36
To further assist states to prevent or quickly

detect UI benefit overpayments, the

Administration proposed legislation allowing

states access to data in the National Directory

of New Hires—a database maintained for

child support enforcement purposes.

Employers are required

to swiftly provide information on all new hires

for inclusion in the database. Many states are

already using their State

Directories of New

Hires for quick detection of individuals who

have gone back to work

but continue to claim UI

benefits. 

However, state officials

did not have access to

new hires reported to

other states. The

Administration’s proposal

would remedy this problem by giving all states

access to the National Directory of New Hires.

The database also contains information from

multi-state employers who choose to report new

hires to a single state and wage/new hire information from federal agencies (civilian and military). This access would reduce improper payments by $371 million over the next ten years.

Tax Offset for UI Overpayments

When UI beneficiaries receive benefits to which

they were not entitled under state law, they

drain state unemployment accounts of funds

needed for eligible workers. For this reason,

the Department of Labor wants to give states

another tool to help them recover overpayments and strengthen their funds. The

Department of the Treasury already matches

and deducts delinquent debts owed to various

government agencies against federal income

tax refunds. The Administration proposed

adding UI benefit overpayments to the list of

debts that can be

recovered from federal income tax

refunds. 

Enactment of this

proposal is estimated to result in

recovery of approximately $3 billion

in UI overpayments

over the next ten

years.

Trade

Adjustment

Assistance

Trade Adjustment

Assistance (TAA)

provides a variety of

reemployment services and benefits to workers

whose jobs have been adversely affected by

foreign trade. The TAA program helps laid-off

workers obtain new employment with earnings

comparable to their prior jobs. The program is

critical to helping trade-affected workers adjust

to changing market conditions and shifting skill

requirements. 

Eligible trade-affected workers may receive

reemployment services, job search and relocation allowances, health insurance coverage

assistance, wage insurance, job training, and

up to 104 weeks of income support beyond

unemployment insurance. 

chapter four

37

Trade Adjustment

Assistance (TAA) 

provides a variety of

reemployment services

and benefits to workers

whose jobs have been

adversely affected by

foreign trade.
In 2002, the President signed the Trade Act

which expanded TAA benefits to include

the following: new subsidies for qualified

health insurance (a 65 percent advanceable

and refundable tax credit for health insurance coverage); a wage subsidy for certain

older workers (50 percent of the difference

between their new salary and old salary for

two years up to $10,000); longer periods of

eligibility for income support benefits; and

coverage of “secondary workers” who were

employed by companies connected to firms

adversely affected by trade and whose

workers are eligible for TAA benefits. 

In FY 2003, about 48,000 trade-affected

workers received almost $340 million in

income support, and approximately 47,000

individuals entered training programs with

$220 million spent for their benefit. In

2004, management reforms were undertaken to reengineer and speed processes so

that the review of petitions is completed

within a 40-day time frame.

Conclusion

Department of Labor programs play a critical role in protecting America’s workers

from the temporary negative effects of economic change. Through more responsive

delivery of aid and a vision aimed at identifying employers’ needs for the 21st Century,

the Department can help better prepare

America’s workers for new opportunities in

our dynamic and competitive global economy. As we face new challenges, the Department of Labor will continue to help

American businesses develop the workforce

of the future and set the nation’s workers on

rewarding career paths that ensure economic

self-sufficiency.

america’s dynamic workforce
America’s Workforce is Safe and

Getting Safer

A dynamic economy and dynamic labor force

require workplace rules that ensure the safety

of American workers, and adapt to changing

economic conditions. Protecting America’s

workers is of utmost concern to the Department of Labor. This chapter highlights recent

Department successes in protecting workers’

health, safety, employment rights, and benefit

security. 

Four agencies provide examples of the

Department’s efforts. The Occupational

Safety and Health Administration (OSHA) and

the Mine Safety and Health Administration

(MSHA) have contributed to reductions in

workplace injuries, illnesses, and fatalities.

The Employment Standards Administration

(ESA) ensures that federal contractors and

other employers comply with wage and

nondiscrimination laws. The Employee

Benefits Security Administration (EBSA) protects the integrity of pensions, health plans,

and other employee benefits. Workplace

safety, standards for job conditions, and benefit security serve the interests of workers, businesses, and the U.S. economy as a whole.

Protecting Workers from Death and

Injury

Workplace injury and illness rates have been

declining. OSHA is proud that the overall

workplace injury and illness rate in 2002 was

only 5.3 cases per 100 workers—down from

8.9 in 1992. (See Chart 5.1.) This success is

the result of hard work by federal and state

OSHA offices and the employers and workers

of the United States.

chapter five

39

chapter five

keeping workers safe and secure
However, there is still work to do. Although

fatal injuries declined by 6.6 percent from

2001 to 2002— the single largest annual

decline since records began in 1992—more

than 5,500 workers died on the job. (See

Chart 5.2.) OSHA’s Strategic Management

Plan, which sets forth aggressive goals for the

40

agency, continues OSHA’s efforts to reduce

fatalities. The plan calls for OSHA to focus on

the “Triple Bottom Line” of reducing workplace injuries, illnesses, and fatalities. 

In addition to the crucial legal and moral

imperatives to help save workers’ lives, reducing injuries and illnesses is good for the U.S.

economy. The National Institute for

Occupational Safety and Health (NIOSH) estimates that the cost of fatal occupational

injuries in the United States between 1992

and 2001 was $48.7 billion. 

OSHA has been very busy in the past year.

Some highlights from the last 12 months are

described in the following sections. 

Strong, Fair and Effective Enforcement

Enforcement underpins all of OSHA’s activities. Federal OSHA inspectors conducted

39,817 inspections in fiscal year (FY) 2003, an

increase of about 2,000 inspections from FY

2002. OSHA’s enforcement program is

designed to produce change in the workplace.

america’s dynamic workforce

Safer, Healthier Workplaces

T

he number of workplace fatalities

declined by 6.6 percent from 2001 to

2002 – to the lowest level ever recorded.

There was an 8.6 percent reduction in fatalities in the construction industry alone in

2002. 

■ More Safety Inspections: Department of 

Labor (DOL) workplace safety inspections 

have increased 11 percent since 2001.

■ More Safety Partnerships with Unions:

DOL has formed more cooperative health 

and safety partnerships with labor unions 

than any other Administration.

■ Protecting Hispanic Workers: Fatal injuries 

among Hispanic workers, which had been 

rising every year since 1995, fell by 6 percent in 2002, due in part to targeted 

programs designed to assist immigrant 

workers.

■ Best Mine Safety Record in History: Mining 

fatalities dropped 22 percent between 

2001 and 2003 to the lowest level since 

statistics were first compiled in 1910. The 

Mine Safety and Health Administration 

(MSHA) played a major role in the rescue 

of the miners at Quecreek Mine in Pennsylvania in July 2002. 
OSHA utilizes its resources most effectively by

focusing on the most dangerous workplaces

through national emphasis programs, local

emphasis programs, and site-specific targeting. 

Inspections focusing on facilities with high

injury and illness rates increased by almost 10

percent between FY 2002 and FY 2003. The

number of citations issued by federal OSHA

increased by more than 10 percent; citations of

willful violations rose by 22 percent. Also, from

January 2002 through June 2004, OSHA conducted over 1,700 inspections focusing on ergonomics issues, and has followed up with citations and hazard-alert letters informing employers of ergonomic hazards in their workplaces. 

In addition, in 21 states and Puerto Rico, 

OSHA enforcement is provided through

OSHA-approved state plans. These states,

along with four additional states that cover

only public employees, conducted an additional 59,290 inspections last year, extended

full protection to state and local government

employees, and provided extensive compliance assistance through voluntary protection

programs, outreach initiatives, training and

education, partnerships, and alliances—all

tailored to states’ unique needs.

Through its Enhanced Enforcement Program,

OSHA focuses on employers who defy safety

and health regulations. This newly implemented program emphasizes follow-up visits,

additional inspections, and tougher settlements for enhanced enforcement cases—both

fatality cases where OSHA finds serious violations related to worker death, and cases with

multiple willful or repeat violations. In these

circumstances, OSHA will inspect other worksites of an employer to determine whether

compliance is a company-wide problem. 

chapter five

41

As of January 2004, OSHA had 46

national alliances and 105 regionaland area-office alliances. A sample

of the working alliances, which are with a

wide range of organizations, include Dow

Chemical Company, the Society of the Plastics

Industry, the MacDonough School of Business

at Georgetown University, the American

Industrial Hygiene Association, the

Washington Group International, and the

American Meat Institute. 
OSHA also works closely with the Solicitor of

Labor to ensure that attorneys act quickly on

all significant enforcement cases and to place

special emphasis on cases involving discrimination or retaliation against workers who

exercise their rights under the Occupational

Safety and Health (OSH) Act. 

OSHA is actively pursuing new and revised

standards to improve workplace safety and

health. The agency’s new regulatory agenda

moved from a “wish” list to a “to do” list by

removing items that were either lower priority

and would not be addressed in the upcoming

12-month period or that could be more effectively addressed by other means, such as

guidance. The agenda now reflects what the

agency is truly working on and identifies specific actions that can be accomplished in the

next 12-month period. 

Outreach, Education and Compliance

Assistance

OSHA’s efforts to reach out to employers and

employees to improve workplace safety and

health also continue to increase. In FY 2003,

state consultation programs conducted more

than 31,000 consultation visits, and assisted

employers in recognizing and removing more

america’s dynamic workforce

42
than 123,000 serious workplace hazards.

These consultants provide additional assistance to small businesses by helping them

develop safety and health management systems specifically for their workplaces.

In FY 2003, OSHA’s training programs

reached more than 300,000 employers and

workers. The OSHA Training Institute (OTI)

near Chicago and OTI

Education Centers,

located throughout the

country, focus on training employers and

employer representatives who work to

ensure their worksites

are in compliance with

OSHA requirements

and train their employees. Because many of

the OSHA training programs use a Train-theTrainer model, the programs create a multiplier effect, which allows

a significantly larger

number of students 

to be trained. Many

programs are bilingual as well. 

OSHA’s web site, named one of the “Best of

the Web” in 2003 by Business Insurance

magazine for their usefulness and innovation,

is one of the main avenues for communicating

and providing compliance assistance to the

public. Visits to OSHA’s web pages increased

150 percent from 2002 to 2003. OSHA

places information on its web pages immediately after a new hazard emerges to help

employers protect their workers. For example, as soon as the agency learned of possible

ricin exposure in U.S. Senator Bill Frist’s

office, OSHA placed crucial information

about the dangers of this substance on its 

web pages. 

In 2003, 146,000 calls were made to OSHA’s

1-800 number, which offers assistance in

English as well as in Spanish, and the agency

received nearly 12,000

emails. In response, the

agency answers questions

and directs the public to

relevant sources of information. 

OSHA has provided

employers and workers

numerous compliance

assistance tools to

enhance their awareness

of workplace hazards.

The tools include 8 new

eTools and 11 new safety

and health pages on

OSHA’s web pages, 

16 Safety and Health

Information Bulletins,

and, for the maritime

industry, a Safety and Health Injury

Prevention sheet and a video of a fatality

investigation by OSHA. Two new tools on

the OSHA web pages are MyOSHA, which

creates individually-tailored links to OSHA

online resources and Quick Start, a step-bystep guide to identify major OSHA requirements and guidance materials. 

An example of OSHA’s approach to outreach

comes from Buffalo, New York, where OSHA’s

staff conducted 66 seminars for small businesschapter five

43

OSHA has provided

employers and

workers numerous

compliance assistance tools to

enhance their

awareness of

workplace hazards.
es in one year. Through the seminars, OSHA’s

local office assisted small-business owners in

developing safety and health programs for

their workplaces and made them aware of

methods used by other firms to protect workers

in their industries.

OSHA worked with the New York

Consultation Program, local community colleges, Small Business Development Centers,

local chapters of the National Safety Council,

and various chambers of commerce in

upstate New York to deliver the material.

These organizations provided classroom

space and publicity for the seminars. As

employers learned of the seminars, participation grew and the feedback from the smallbusiness owners who attended was very positive. Similar outreach efforts are being conducted in many other parts of the country,

including many in Spanish to address

Hispanic workers.

Partnerships and Cooperative Programs

Partnerships and cooperative programs

expand OSHA’s effect. Each of OSHA’s

alliances represents an opportunity for OSHA

and trade organizations, professional societies, or unions to build a cooperative relationship, form networks with others committed to workplace safety and health, and

leverage resources to produce products or

services that maximize worker safety and

health protection. 

For instance, OSHA and 13 major airlines,

including American Airlines, Delta Air Lines,

Continental Airlines and JetBlue Airways, and

the International Air Transport Section of the

National Safety Council formed an alliance to

address ergonomic issues associated with hanamerica’s dynamic workforce

44
dling passenger-checked baggage. The

alliance is helping to develop an ergonomics

training manual for their workers who handle

checked baggage. The manual will be made

available without charge to all airlines. In

addition, through the alliance, the airlines and

OSHA worked cooperatively to review and

provide ways to improve OSHA’s eTool for

baggage handling. Using both groups’ input,

this tool was updated and it is now available

on OSHA’s web pages. 

OSHA currently maintains 212 strategic partnerships with employers, associations, and labor

unions, and has participated in a total of 300

partnerships since the program began in 1998.

In the past three years, OSHA has increased the

number of partnerships by an average of 54

new participants annually. Partnerships have

measurable results, both in reducing injuries and

illnesses and in saving direct and indirect costs. 

A partnership between OSHA and the Idaho

General Contractors reduced the fatality rate

among members by 57 percent in six years.

The number of workers’ compensation claims

among these firms in Idaho dropped by 30

percent during that period. Another partnership, with the Division of Marine Operations,

Pension Horizon Lines of Puerto Rico, Inc.

resulted in a drop in the total case rate during

the first year of the partnership from 8.6 to

5.1, a 41 percent decrease.

OSHA realizes that death and injury among

Hispanic workers is a significant problem.

The results of OSHA’s initial enforcement, outreach and compliance assistance efforts targeted to this worker population have been

positive as fatalities among Hispanic workers

fell by 6 percent from 2001 to 2002. (See

Chart 5.3.) OSHA has over 180 bilingual staff

and continues to make major improvements

for Hispanic workers. 

The most effective way to reduce injuries and

illnesses is to use all the tools available 

through the OSH Act. An example of the way

chapter five

45

The most effective way to reduce injuries and 

illnesses is to use all the tools available through

the OSH Act.
46

this can be accomplished occurred in the

Atlanta Region last year. When regional officials learned that there were large numbers of

workers electrocuted while working around

power lines, they instructed OSHA’s compliance officers to stop at worksites if they saw a

crew working near a line. Compliance officers provided packets of information about

power-line hazards to employers that

described proper safety procedures. A training CD was produced for employers that

included ready-made safety presentations and

photos from OSHA’s inspections. 

OSHA also formed a regional alliance with

the International Brotherhood of Electrical

Workers, the Southeastern Line Constructors

Chapter of the National Electrical Contractors

Association, and the Southeastern Line

Constructors Apprenticeship and Training

Council to improve workers’ ability to recognize and maintain a safe working distance

from power sources, to use proper grounding

techniques, and to wear proper protective

equipment. 

Protecting Miners

The Mine Safety and Health Administration

(MSHA) is a single-focus worker protection

agency, dedicated to protecting the health

and safety of workers in and around the

nation’s mines. Since 1978, MSHA has

worked steadily and successfully to reduce

the number of injuries, illnesses, and fatalities suffered by mine workers. American

miners are safer than ever before. In 2003,

the agency reached a milestone: the number

of fatalities in the industry fell to the lowest

level recorded since the United States began

collecting this data in 1910. MSHA continues to use every tool at its disposal to reduce

the number of injuries, illnesses and fatalities

to zero, to ensure that more workers return

home to their families safe, whole and

healthy at the end of every shift. 

The safety milestone reached in 2003 continues a dramatic record of improvement that

has seen the number of fatalities fall from 85

in 2000 to 56 in 2003, a 34 percent drop.

(See Chart 5.4.) Of course, fatalities are not

the only benchmark. Total injuries at all

mines have fallen by 26 percent since 2000.

These are not just numbers, but lives saved

and tragedies averted. 

These record-setting improvements in health

and safety have been achieved through an

innovative and effective approach to reducing

accidents—an approach that focuses on several

priorities:

■ Increasing the effectiveness of 

enforcement by targeting those with 

poor health and safety performance 

records; 

america’s dynamic workforce
■ Investing in compliance assistance 

tools and programs to help employers

protect workers; and

■ Entering into new partnerships with 

businesses, unions, trade associations, 

and professional organizations that recognize that safety andhealth add value.

Overall, MSHA increased the number of

enforcement site events by 7 percent between

2000 and 2003. At the same time, MSHA

expanded its compliance assistance program

so that mine operators can get answers to their

questions and guidance on how to make

mines safer. 

The records set from 2001 to 2003 are clear

evidence that MSHA is on the right track. But

further reducing injuries and fatalities requires

a renewed emphasis on hazards that have not

yet been fully addressed, and on the behavioral aspects of accident prevention. For

example, small mines (those employing five or

fewer workers) historically have experienced a

fatal incidence rate significantly higher than

that of larger mines. 

Five of the 56 fatalities in 2003 occurred at

small mines. Although this is an improvement

over previous years, MSHA will continue its

efforts to reach zero fatalities. During 2003,

MSHA’s small mine office helped the operators of nearly 1,700 small mines by providing

training, education and compliance assistance. In the coming years, MSHA will continue its efforts to help small mines develop

and manage safety and health programs to

better protect their miners. 

chapter five

47
MSHA is also moving forward with an abandoned mine mapping program. The rescue of

nine miners in Quecreek, Pennsylvania, who

were trapped when they breached the wall of

an abandoned mine filled with water, was

cause for celebration. Yet it highlighted a real

danger to workers, and was an accident that

must not be repeated. In 2003, MSHA awarded

nearly $4 million to the states to create digitized

underground maps for abandoned mines, with

another $6 million devoted to developing new

technologies to advance the process further.

MSHA’s overall success can be traced to its

new emphasis on communication. Toward

this end, MSHA has developed a number of

special initiatives, including: 

■ National Coal Mine Safety Awareness

Day. MSHA sent more than 600 enforcement, training and technical support personnel to 1,500 active coal mines over a

two-week period to speak directly with

mining companies and workers.

■ Spring Thaw Workshops. For metal and

nonmetal mines, these workshops are specially designed to increase awareness of

mine safety hazards before the start of the

high-production season.

■ National Webcasts. With hundreds of

mine operators online, MSHA analyzes

fatalities for causation and methods of prevention, and discusses best practices. 

america’s dynamic workforce

48

MSHA is also moving forward with an abandoned

mine mapping program.

The rescue of nine miners

in Quecreek, Pennsylvania,

who were trapped when

they breached the wall of

an abandoned mine filled

with water, was cause for

celebration.
■ Hispanic Outreach. Portions of MSHA’s

web pages and a number of its publications are available in Spanish. MSHA also

has bilingual employees and offers minesite sessions in Spanish.

■ Holiday Safety Initiative. The Assistant

Secretary of Labor for MSHA wrote to

every mine operator weekly during

December 2003 to emphasize winter hazards and the need to stay alert and

focused. The results were historic—not

one fatal injury

in the coal mining industry for

that month. 

MSHA has been

strengthening its

relationships with

miners beyond onsite visits and webcasts. MSHA has

also developed a

number of special alliance agreements in order

to foster closer coordination. Trade associations, labor unions, and others are recognizing

the advantage of working directly with MSHA

to reach health and safety goals. They are

demonstrating their commitment by signing

alliance agreements, which go further than simply putting pen to paper. Three examples follow:

■ The CEOs of the member companies of 

the National Stone, Sand and Gravel 

Association (NSSGA) have formally 

pledged to adopt MSHA’s safety and 

health performance goals as their own. 

This is a first for the industry.

■ The National Safety Council, not traditionally associated with the mining industry,

has mobilizedits diverse membership to 

protect children from the hazards associated 

with abandoned mine sites through the 

“Stay Out—Stay Alive” partnership.

■ The leadership of the International Union 

of Operating Engineers took the bold 

step of joining MSHA and undertaking 

joint emergency response training and 

exercises in order to bolster U.S. 

homeland security. 

These partnerships,

initiatives and outreach programs are

part of MSHA’s overall strategy to reduce

injuries and illnesses

in mines. The

agency’s “Triangle

of Success” is a balanced approach to

mine safety and

health. The three points of the triangle signify

(1) technical assistance (e.g., exploration of

new technologies for scaling highwalls,

designing haul roads to help control runaway

vehicles), (2) education and training (e.g.,

foreman certification, mine rescue training,

annual refresher courses at the National Mine

Health and Safety Academy in West Virginia),

and (3) enforcement. Compliance assistance

underpins all of MSHA’s initiatives and programs. 

MSHA understands that the vast majority of

mine operators are concerned about their

workers, so the agency seeks to assist them in

keeping workplaces safe. MSHA believes that

assisting employers in complying with the law

chapter five

49

The Department of

Labor protects workers’

hours, wages, and other

job conditions.
50

is every bit as important as enforcement. All

mine visits are now “inspections with a purpose.” Inspectors are there to help identify

and determine the root causes of hazards that

lead to both violations and incidents, but will

continue to hold the mining industry to stringent standards.

Mining is an inherently dangerous occupation,

and it is MSHA’s responsibility to help mine

operators eliminate the hazards that miners face

on the job. Even with the remarkable improvements in mine safety, MSHA recognizes that

one death, one injury, one occupational illness

is still one too many. While MSHA takes pride

in its recent accomplishments, it will not be satisfied until every miner returns home safe and

healthy at the end of every shift. 

Protecting Workers’ Job Conditions

The Department of Labor protects workers'

hours, wages, pensions, and other job conditions. One of the DOL organizations dedicated

to achieving this goal is the Employment

Standards Administration (ESA). In furthering

the economic security and welfare of workers

and families, the Department uses compliance

assistance, education, private/public partnerships and, should these approaches fail, a balanced, consistent enforcement program. 

The Department involves all segments of business and industry—contractors, manufacturers, retailers, consumers, worker advocacy

america’s dynamic workforce

Strengtherning Overtime Protection

DOL finalized reforms to overtime regulations that will provide more overtime to more workers, reduce litigation, and free up resources for job creation. Workers receiving overtime

through a collective bargaining agreement will continue to get overtime

under the new rule. 

■ More Overtime for More Workers: The Department nearly tripled the salary 

level under which workers are guaranteed overtime, from $8,060 to $23,660, 

guaranteeing overtime protection to an additional 1.3 million workers. The rule 

also strengthens overtime protection for 5.4 million workers whose right to 

overtime protection was ambiguous.

■ Overtime Guaranteed: For the first time ever, the regulations explicitly guarantee overtime 

protection to blue collar workers, police, firefighters, EMTs, factory workers, construction workers,

and licensed practical nurses, among others.

■ Reforms Long Overdue: Sections of the overtime regulations had not been updated since 1949, 

and these reforms had been on the DOL’s regulatory agenda since the Carter Administration.

■ Reduced Litigation: Overtime lawsuits are among the fastest growing areas of employment 

litigation today. The current regulations have invited wasteful class action lawsuits that cost the 

economy millions of dollars and require workers to wait years to be paid the overtime they 

deserve. The new overtime rules will reduce this needless burden on workers and the economy 

by clarifying the tests under which workers qualify for overtime.
groups, financial and health care communities, and unions—in advancing the economic

well-being of the Nation’s workers. ESA has

developed programs that assist businesses and

other organizations subject to DOL’s regulations to comply with their provisions through

public education and outreach, in support of

traditional enforcement techniques that detect

violations after workers have suffered harm.

ESA’s Wage and Hour Division administers

and enforces a number of federal statutes that

establish minimum standards for wages and

working conditions, including the Fair Labor

Standards Act (FLSA), the Migrant and

Seasonal Agricultural Worker Protection Act

(MSPA), the Family and Medical Leave Act

(FMLA), certain provisions under the

Immigration and Nationality Act, and various

government contract laws. ESA is trying to

decrease the number of employers that fail to

compensate workers according to the law,

especially those that commit multiple violations. For example, ESA will offer a revised

comprehensive education program, including

technology-based compliance assistance. 

ESA also provides compliance assistance on

all applicable laws during the conduct of an

investigation; secures commitments for future

compliance following an intervention; and

obtains commitments for corporate-wide compliance by multi-establishment employers following a history of interventions. ESA assesses

penalties, pursues litigation and prosecution,

and publicizes the consequences of non-compliant behavior for willful and repeat violators.

Through its administration and enforcement of

the Labor-Management Reporting and

Disclosure Act (LMRDA), ESA’s Office of

Labor-Management Standards safeguards

union democracy and the financial integrity

and transparency of union operations. The

LMRDA requires reporting by unions and

other covered entities for the purpose of public disclosure; establishes certain standards for

union officer elections; and provides certain

union financial integrity protections, including

criminal provisions for the embezzlement of

union funds. 

In carrying out its responsibilities under the

LMRDA, ESA performs four types of activities:

civil and criminal investigations and enforcement actions; union compliance audits;

reports/public disclosure administration; and

compliance assistance. 

The Department is committed to fostering fair

chapter five

51

DOL finalized regulations that will provide

union members with better information

on how their dues money is spent. 

■ Union Financial Disclosures: Last year, DOL 

finalized a rule that made changes to union 

financial disclosure forms. The new forms 

will offer union members more information 

about how their dues money is spent. 

■ Notification of Employee Rights: On 

February 17, 2001, President Bush issued an

Executive Order to require Federal contractors

to post a notice explaining that employees 

can be reimbursed for the portion of their 

dues not used for collective bargaining, 

contract negotiations, or grievances. 
52

workplaces. To meet this objective, it is dedicated to increasing the representation,

advancement, and promotion of women, people of color, veterans, and people with disabilities in the workplace. President Bush has

said, “I will constantly speak for the values

that unite our country: personal responsibility,

equal justice, and equal opportunity for everybody. These are important common values.” 

ESA, through its Office of Federal Contract

Compliance Programs (OFCCP), enforces

laws and regulations protecting workers and

applicants from discrimination regardless of

their sex, race, national origin, color, religion,

or status as a qualified individual with disabilities or protected veteran. The requirement that government contractors refrain

from discriminating in employment has been

an established part of federal contracting policy

since 1941, when President Roosevelt signed

Executive Order 8802, and it continues

today. ESA has the responsibility of ensuring

that employers doing business with the federal government comply with the equal

employment opportunity and affirmative

action provisions of their contracts. 

Procedures and policies for assuring equal

opportunity workplaces must be adaptable, so

they can reflect and accommodate change in

federal contractor industries now and in the

future. The Department must also pursue

avenues of cooperation — through partnerships with employers, associations, and other

federal agencies, as well as compliance assistance — to expand equal opportunity for

workers and job applicants in those companies that have a contractual relationship with

the federal government.

Finally, the Department is committed to minimizing the human, social, and financial effect

of work-related injuries for workers and their

america’s dynamic workforce

When, for example, workers are wrongfully denied pay (often overtime) or terminated

because of a request for family or medical leave, DOL intervenes to help those workers

collect back wages. In 2003, DOL recovered more than $212 million in back wages –

an 11-year high and a 21 percent increase over 2002. The number of workers receiving back

wages increased 30 percent, to more than 342,000 workers. 

■ Increase in Back Wage Recovery: Back wages collected for violations of the Fair Labor 

Standards Act – which governs minimum wage and overtime protections –increased by 27 percent

from 2002 to 2003.

■ Special Emphasis on Low-Wage Workers: Since 2001, the collection of back wages is up 7.8 

percent for garment workers and up 52 percent for agricultural workers, and DOL concluded 

an historic $10 million settlement for poultry workers.

■ Quicker Results for Workers: DOL has worked aggressively to resolve worker complaints more 

quickly. Since 2002, the average number of days needed to resolve wage and hour complaints 

has declined to a record low of 108 days. 
families. ESA’S Office of Worker Compensation Programs administers four disability

compensation programs that provide benefits

to certain workers who experience work-related injury or disease, and survivors of workers

who die from job-related injury or disease. ■ The Federal Employees’ Compensation Act 

(FECA)program affords income and medical 

cost protection to civilian employees of 

the federal government and to certain 

other groups. 

■ The Longshore and Harbor Workers’

Compensation Act program provides similar

protection to private sector workers 

engaged in certain maritime and related 

employment. 

■ The Black Lung Benefits program provides 

protection to the nation’s coal miners who 

are totally disabled by pneumoconiosis. 

■ The Energy Employees’ Occupational 

Illness Compen-sation Program Act of 2000

(EEOICPA) provides compensation and medical benefits to workers or survivors of workers of the Depart-ment of Energy (DOE) and of

private companies under contract with DOE

who suffer from a radiation-related cancer,

beryllium-related disease, or chronic silicosis as 

a result of their work in producing or testing

nuclear weapons. 

Protecting Employee Benefits

We have seen that the Department of Labor

protects workers from injury and abuse. In

addition, the Employee Benefits Security Administration (EBSA) protects the integrity of pensions, health plans, and other employee benefits

for more than 150 million people. These include approximately 7 million health and other

welfare benefit plans and 738,000 pension plans

chapter five

53
holding approximately $4.2 trillion in assets. 

Enforcement of ERISA 

EBSA enforces the Employee Retirement

Income Security Act of 1974 (ERISA), which

protects the pension, health and other

employee benefits of workers and their families in private sector employee pension and

welfare benefit plans. EBSA enforces those

sections of the statute that prescribe minimum standards of fiduciary conduct as well

as the reporting and disclosure requirements. 

The law covers most private sector employee

benefit plans that are voluntarily established

and maintained by an employer, an employee

organization, or by some combination of

these. Pension plans provide retirement

income or defer income until the employee

stops working or sometime later. Other

employee benefit plans, which provide health,

disability, and other similar benefits, are

called welfare plans.

EBSA enforces standards and rules governing

the conduct of plan fiduciaries. In general,

people who exercise discretionary authority,

manage a plan or have the authority to dispose

of its assets are “fiduciaries” under Title I of

ERISA. Fiduciaries are required, among other

things, to discharge their duties both prudently

and solely in the interest of plan participants

america’s dynamic workforce

54
and beneficiaries. ERISA prohibits certain

transactions between an employee benefit

plan and “parties in interest.” Parties in interest include the employer and others who may

be in a position to exercise improper influence

over the plan. 

EBSA also conducts investigations of criminal

violations regarding

employee benefit

plans such as embezzlement, kickbacks,

and false statements

under Title 18 of the

U.S. Code. U.S.

Attorneys’ offices handle prosecutions of

these criminal violations. 

Targeted

Enforcement

EBSA enforces ERISA

by conducting investigations through its ten

regional offices and

five district offices

located in major cities

around the country.

EBSA seeks to identify

situations and apply its

enforcement resources

to protect those employee benefit plan participants and beneficiaries who are in the greatest

danger of being harmed as a result of ERISA violations. Such methods focus on those situations

where workers are most susceptible to losing

their benefits, or where they are exposed to the

greatest risk of falling victim to unlawful conduct.

Targeting is the process by which EBSA identifies investigative subjects who may have broken the law. Because there are nearly 7 million private employee benefit plans under

EBSA’s jurisdiction, targeting is essential.

EBSA strives to use its resources in areas that

are most likely to uncover abuses.

Once the type of

conduct and the

individual or firm is

identified, the field

office decides

whether to open an

investigation.

EBSA’s field offices

coordinate civil

investigations and

case referrals with

their local Regional

Solicitors’ Offices or

with the Plan

Benefits Security

Division of the

Solicitor’s Office in

Washington, D.C.,

which are responsible for bringing civil

lawsuits on behalf of

the agency.

Criminal investigations are conducted

under the direction of the United States

Attorney in that jurisdiction.

Enforcement Actions

If an investigation reveals a violation of the

civil provisions of ERISA, EBSA takes action to

obtain correction of the violation. It is EBSA’s

policy to promote voluntary compliance with

ERISA whenever possible. Making corrections

chapter five

55

The Department of

Labor works hard to

ensure that statutes

and regulations protecting workers are

both followed and

enforced. As a result,

America’s workers

enjoy a more secure

workplace. 
includes paying amounts to restore losses,

reversing prohibited transactions and paying

penalty amounts (when applicable). 

Labor Department attorneys work with field

offices to provide every opportunity for fiduciaries to comply with ERISA. If the persons

involved take the proper corrective action, the

Department will not bring a civil lawsuit with

regard to the issues under discussion. When

voluntary compliance is not achieved, EBSA

may refer a case to Labor Department attorneys for litigation. Criminal prosecutions are

conducted by the Department of Justice.

Employee Benefit plan related crimes are punishable by significant prison terms and fines.

Protecting Retirement 

and Health Security for Working Americans

The Bush Administration has proposed several

significant reforms to enhance the retirement

and health security of working Americans and

their families.

For workers in defined contribution retirement

plans, such as 401(k) plans, the President recommended five reforms to improve retirement

security. The President has signed two of these

into law as part of the Sarbanes/Oxley legislation. These laws would require plans to give

30 days notice to participants prior to a plan

blackout, a period of time during which participants cannot make transactions in their plans,

and would also prohibit corporate executives

from trading stock in the company they hold

outside of the plan during the plan blackout. 

The House of Representatives has passed the

three remaining Presidential recommendations,

and they are pending in the Senate. These

would allow employees to diversify their

investments by selling matching company stock

held in their plans after three years, require

america’s dynamic workforce

56
plans to provide participants with quarterly

benefit statements, and allow greater access by

participants to professional investment advice.

For workers in traditional retirement plans,

called defined benefit plans, the Administration

has proposed a set of reforms designed to

improve accuracy in measuring and reporting

the funding status of pension plans. The

Administration is also working on a comprehensive pension funding reform proposal that will

ensure companies and labor unions provide the

funds to keep the pension promises they make. 

For workers and employers who are having difficulty finding affordable health insurance,

President Bush proposed several key initiatives,

including Association Health Plans (AHPs),

which will be discussed further in Chapter 6.

AHPs will allow small businesses and other

employers to join together through their bona

fide trade and professional associations to purchase health coverage across state lines.

Doing so will allow these workers to benefit

from the same economies of scale, administrative efficiencies and uniform regulation

enjoyed by large employers and labor unions.

According to the Congressional Budget Office,

AHPs will allow as many as 2 million

Americans who do not currently have health

coverage through their employer to gain coverage, reducing premiums by as much as 25 percent. AHP legislation passed the House on a

strong bipartisan basis and is pending in the

Senate. 

American workers and their families rely on

the retirement and health plans provided by

their employers, and the Employee Benefits

Security Administration works hard to ensure

chapter five

57

Strengthening and Protecting Pension and Health Plans 

■ Strengthened Union Pension Plans: As 

part of the President’s 2001 economic 

growth and tax relief bill, workers’ 

pension payments are now calculated on 

the basis of their best three years of 

earnings rather than their last three years.

This is especially beneficial for construction

workers 

because their 

earnings 

often decline 

with age. 

■ Prosecuted 

Abuse of 

Pension and 

Health Plans:

Criminal prosecutions 

against 

employers 

and plan 

trustees abusing pension 

and health 

plans have 

increased 

by more than 

50 percent 

since 2001. 

Since 2001, DOL secured $3 billion through

court judgments, settlements, and fines 

covering 150 million workers and their 

dependents by holding those who manage

benefit plans accountable to their legal 

obligations to protect pension and health 

benefit plans. 
58

that those plans are managed properly and in

the best interests of workers and their families. 

Conclusions

The Department has made substantial gains in

protecting workers’ health, safety, employment

rights, and benefit security. By making sure

that workers have safe and healthy workplaces, OSHA has contributed to an overall

workplace injury and illness rate of only 5.3

cases per 100 workers in 2002. 

Working with mine operators to have the lowest injury and fatality rates possible, MSHA

has made significant progress in protecting

miners. During 2003, mine fatalities fell to

the lowest level since the United States began

collecting data in 1910, falling from 85 in

2000 to 56 in 2003 — a 34 percent decline.

Additionally, total injuries in mines fell by 26

percent in the same period. 

ESA works hard to make sure that workers are

paid according to congressionally-mandated levels and that employees and applicants are protected from discrimination. 

DOL has been successful in protecting employees’ benefits such as pensions and health plans.

In FY 2003, EBSA reported a record $1.4 billion

in monetary results, and 137 criminal indictments resulting from EBSA investigations. These

results have dramatically increased from the

$637 million and 90 criminal indictments

reported by EBSA in FY 2000. 

The Department of Labor works hard to ensure that statutes and regulations protecting

workers are both followed and enforced. As a

result, America’s workers enjoy a more secure

workplace. 

america’s dynamic workforce

DOL has been successful

in protecting employees’

benefits such as pensions and health plans.

In FY 2003, EBSA

reported a record $1.4

billion in monetary

results, and 137 criminal indictments resulting

from EBSA investigations. These results

have dramatically

increased from the

$637 million and 90

criminal indictments

reported by EBSA in 

FY 2000. 
President Bush frequently calls on governmental entities to streamline regulation. Good rules

and regulations protect employees in the workplace. But sometimes regulations become

unnecessarily burdensome and end up hurting

businesses and the workers they were designed

to protect. We must make sure that the costs of

regulations do not outweigh their benefits.

The Department of Labor works to preserve a

delicate balance. We need to protect workers’

interests without stifling the ability of employers

to expand their businesses and hire more

employees. By eliminating unnecessary and

burdensome regulations and creating smarter,

more effective regulations, the Department has

helped foster new job growth within a safe

working environment. 

This chapter describes the progress that the

Department of Labor has made in streamlining

regulations. It concludes with a discussion of

the challenges of addressing the regulatory

problems in the provision of health insurance.

Regulatory Agenda

The Department of Labor routinely issues regulations that implement new statutory

requirements from Congress. It also revises

regulations to reflect current economic realities and workplace conditions. Executive

Order 12866 (1993) and the Regulatory

Flexibility Act (1981) require semiannual

publication in the Federal Register of an

agenda of regulations, both regulations under

active consideration for promulgation, proposal, or review during the coming one-year

period, and those it expects to propose or

promulgate that are likely to have a "significant economic effect on a substantial number

of small entities." 

Proposed regulations are recorded in the

Department’s Regulatory Agenda twice a year,

with some items added as agencies start new

rules and others removed due to long-term

inaction. Over the years proposed regulations

accumulated, and the agenda came to include

many items on which no action had been

taken for long periods and/or for which action

was no longer necessary. 

Therefore, in 2001 the Department began a systematic review of the Regulatory Agenda. Each

chapter six

59

chapter six

creating the environment for job growth
60

item was evaluated for retention or withdrawal

based on the Administration’s policy objectives,

the Secretary’s priorities, statutory requirements,

the length of time the item had remained on the

Agenda without action, and whether circumstances indicate the rule is no longer needed.

The Department has reduced the size of its

Regulatory Agenda from about 145 to about

80 items in three years. These items accurately reflect the Department’s Regulatory

Agenda, allowing the public to participate

more fully in the regulatory process. (See

Chart 6.1.) Additionally, the Department has

prioritized and issued new regulations that

achieve the same results more efficiently, protecting workers and leaving businesses with

more resources for hiring. 

The Policy Planning Board

In August 2001, after a review of existing procedures, the Policy Planning Board (PPB) was

established to provide a Department-wide

mechanism for evaluating proposed policies,

particularly regulatory policies, with oversight

by the Secretary. 

The PPB is responsible for reviewing, developing, and advancing all major policy initiatives

planned by DOL and its agencies. The purpose of the PPB is to assure that such proposed actions have been fully considered by

the appropriate agencies, and that such

actions are consistent with Department and

Administration policy priorities. Another key

function of the Board is to manage policy initiatives that cross agency lines or require

interdepartmental coordination. All actions

reviewed by the PPB are ultimately forwarded

to the Secretary for final approval prior to

their implementation, transmittal to the Office

of Management and Budget (OMB), or publication in the Federal Register. 

Implementation of Regulatory

Priorities 

With a reduction in outdated items, the

Department has been able to focus on completing its top regulatory priorities. These

include transparency in union accounting, with

a new Form LM-2 (Labor Organization Annual

Report); regulations concerning the Senior

Community Service Employment Program

(SCSEP); and new overtime rules which

strengthened and clarified overtime protection.

On October 9, 2003, the Department published the final rule containing changes to

Form LM-2 used by large labor organizations

to file annual financial reports. The American

workforce and labor organizations have

changed dramatically over the last 40 years,

yet the form used by labor organizations to

report financial information had not changed

significantly in the same time period. 

america’s dynamic workforce

Source: Semiannual Regulatory Agenda, compiled from 2000 - 2004
The recent changes to Form LM-2 reflect the

Department’s belief that more detailed and

transparent reporting of labor organizations’

financial information will be more useful to

union members, more effectively deter fraud,

and enable investigators to more easily discover fraud when it occurs. On March 26,

2004, fully tested versions of the software for

the revised LM-2 and new Form T-1 (Trust

Annual Report), user guides, and electronic

instructions were made available for downloading from the web site of the Department's Office of Labor-Management

Standards.

On April 9, 2004, new regulations for the

SCSEP were issued in the Federal Register.

The SCSEP fosters and promotes useful parttime opportunities in community service

activities for persons with low incomes who

are 55 years of age or older. 

The new SCSEP regulations were occasioned

by the Older Americans Act (OAA)

Amendments of 2000. The OAA

Amendments expanded the program’s purpose

to formally recognize unsubsidized employment as a program goal. Other major areas of

change include stronger linkages with the

One-Stop Delivery System; an annual State

Senior Employment Services Coordination

Plan; performance measures; and corrective

actions for grantees that fail to meet the performance measures.

On April 23, 2004, the Department issued the

New Overtime Security Rules, which strengthened and clarified overtime protections. The

overtime protections intended by the FLSA

had eroded over the decades. The salary test

for classifying employees as exempt from

chapter six

61
Consistent with the Secretary’s priority for

ensuring pension and health benefit security,

the Employee Benefits Security Administration

(EBSA) will emphasize finalizing regulations

that facilitate the payment of benefits from

pension plans that have been abandoned by

their sponsors and facilitate the rollover of

missing participant distributions into individual retirement accounts in an effort to preserve retirement income. 

Finally, the Secretary has prioritized protecting

the employment rights of service members as

they return to the civilian workforce.

overtime requirements was last updated in

1975, and the job duties test had not been

changed since 1949. 

Under the New Overtime Security Rules,

workers earning less than $23,660 per year —

or $455 per week — are guaranteed overtime

protection. As a result, 1.3 million low-wage

workers will gain the right to overtime, and an

additional 5.4 million workers will have their

overtime rights strengthened. The FairPay regulations became effective August 23, 2004. 

Each of these three regulatory initiatives was

initiated and published as a final rule during

Secretary Chao’s administration. In addition,

Table 6-1 enumerates other regulatory initiatives that were initiated and finalized during

the same period. 

The Department has identified 19 high priority

items for regulatory action. Seven of them

address health and safety issues, which are

central to the Department’s mission and

which represent a major focus of the Secretary. Two agencies, the Mine Safety and

Health Administration (MSHA) and the Occupational Safety and Health Administration

(OSHA) are responsible for these initiatives. 

MSHA’s priorities involve asbestos exposure

limits, diesel particulate matter, and coal mine

dust monitoring. Four of OSHA’s priorities 

address health standards concerning respiratory protection, exposure to crystalline silica,

hexavalent chromium, and streamlining and

updating a number of other health standards

in ways that enhance compliance. A fifth

OSHA priority project – a fire protection standard for shipyards – will help prevent deaths

and injuries. 

62

america’s dynamic workforce

Source: Office of the Assistant Secretary for Policy, Department of Labor
Implementation of Statutory

Responsibilities for Sarbanes-Oxley

The Sarbanes-Oxley Act of 2002 required the

Department to issue regulations implementing

the Act’s whistleblower provisions and its provisions governing notices to employees of

blackout periods, during which they would be

unable to trade in employer stock held in their

401(k)-type plans. Final Blackout Period regulations were issued in January 2003, and

whistleblower regulations were issued in May

2003. In addition, final whistleblower regulations required by the 2000 Wendell H. Ford

Aviation Investment and Reform Act for the

21st Century were published in March 2003. 

This year, the Department specifically

addressed the goal of a more competitive

workforce. This requires the promotion of job

flexibility and the minimization of regulatory

burden. DOL agencies are in the beginning

stages of planning exactly how they will examine, and possibly adjust, the regulatory environment imposed on employers in ways that

accommodate evolving non-traditional work

arrangements and the need to reduce regulatory burden, while keeping necessary worker

protections in place.

Rising Health Costs Harm Job Creation

After averaging less than 1 percent per year

from 1994-1997, health benefit costs began to

climb again in 1998, increasing at annual rates

of 14.7 percent in 2002 and 10.1 percent in

2003. An earlier period of high health cost

inflation during the late 1980s and early 1990s

is often cited as causing the shift away from

traditional insurance plans, where individuals

pay a percent of the costs, to managed care,

where people generally pay a lump sum as

copayment. This period of inflation also led to

higher cost sharing requirements for employees and a decline of group health plan sponsorship by employers. 

Rising health insurance costs create competitive disadvantages for American companies in

the global marketplace. Indeed, William Clay

Ford Jr., the chairman of Ford Motor Co., last

year said that the rising cost of health care puts

U.S. companies at a competitive disadvantage.

Not surprisingly, as costs have increased and

employers have felt the pinch, the segment of

the American population with employer-sponsored coverage has dropped from approximately 70 percent in 1987 to 61 percent today.

chapter six

63

Addressing Regulatory Problems 

in the Provision of Health Insurance

F

or most

Americans,

health insurance is provided

through the

workplace.

Since World War

II, this system of

employer-provided coverage has

been an integral

part of a health

care system that

is among the best in the world, but the system today faces challenges in the form of rising costs and a corresponding declining level

of plan sponsorship. Controlling costs and

finding new, more efficient ways to provide

coverage are the key challenges facing the

American system of private health insurance. 
64

america’s dynamic workforce

Given that the period of health cost inflation in

the late 1980s led to some restructuring of

employment-based health insurance, the current rise in costs can be expected to have an

effect on insurance markets. What is unknown

at this time is how employers and employees

will respond to rising costs. Will “consumer

driven” approaches and high deductibles

become the norm? Will more employers get

out of the benefits business altogether? 

Employer Size Makes a Difference

For a variety of reasons, insurers typically

charge small firms more per employee than

large firms for comparable coverage.

According to the General Accounting Office,

insurers incur higher marketing, underwriting

and administrative costs when providing

health care coverage to small employers than

to large employers – and they pass those costs

on to small firms. Small company premiums

are typically 20 percent to 30 percent higher

than those of large, self-insured companies

with similar claims experience. And, as noted

above, the cost of coverage continues to rise. 

The difficulties that small businesses face in

trying to offer quality, affordable health insurance help to explain a significant part of

America’s uninsurance problem. Small firms

employ 42 percent of all workers. Yet these

workers and their families comprise 60 percent

of the working uninsured. 

The Solution: Empower Small

Employers

The Bush Administration is pursuing a comprehensive health care agenda designed to improve health care accessibility and affordability

for every American, consistent with the PresMore Access and More Choices in Health Care

T

he President's goal is to ensure that

Americans can choose and afford private health care coverage that best fits

their needs. The U.S. health care system can

provide the best care in the world, but rising

costs and loss of control to government and

health plan bureaucrats threaten to keep

patients from getting state-of-the-art care.

The President's agenda includes:

■ Health Savings Accounts (HSAs), which 

combine low-cost, high-deductible health 

insurance with tax-free savings accounts 

to pay for health care expenses. The 

President has also proposed to make 

insurance premiums associated with HSAs 

tax deductible.

■ Association Health Plans (AHPs) to give 

America's working families greater access 

to affordable health insurance. By allowing

small businesses to band together and 

negotiate on behalf of their employees 

and their families, AHPs would help small 

businesses and employees obtain health 

insurance at an affordable price, much like 

large employers and unions.

■ Strengthening Medicare. President Bush 

signed legislation in 2003 to establish a 

prescription drug benefit under Medicare. 

Under this plan, private health plans will 

provide seniors better coverage at affordable prices by using competition, not government price-setting. And seniors will be 

able to choose the health care plan that 

best fits their needs instead of having that 

choice made by the government.
ident’s call for an ownership society. This

agenda focuses on expanding coverage for

small businesses through Association Health

Plans (AHPs), as well as expanding coverage

for individuals through new arrangements such

as Health Savings Accounts, enacted as part of

last year’s comprehensive Medicare reform. 

AHPs will improve the health insurance outlook for small employers by breaking down

state-by-state market barriers that discourage

small employers from offering coverage.

Regulated by the Department of Labor, AHPs

will utilize uniform regulation and market

transparency to enhance national product uniformity and efficiency. The result will be

high quality, lower cost health coverage that

will make small employers more competitive.

How would they work? In an AHP, small

businesses could join together across state

lines through bona fide trade and professional

associations to purchase health benefits. By

pooling their resources, small businesses

would enjoy greater bargaining power,

economies of scale, administrative efficiencies, and more uniform regulation, all combining to make coverage more affordable. 

By grouping small employers together to purchase coverage, AHPs will be able to act more

like large employers and offer lower cost coverage to employers, employees and their families.

If the AHP chooses to purchase insurance, it

will be in a better position to negotiate with

insurers regarding the terms and costs of coverage than small employers acting individually. 

chapter six

65
66

AHPs will also enjoy economies of scale in

the administration of plans. They will give

insurers a vehicle to market and distribute

policies to many small employers at once. 

By offering a well-selected and stable choice

of policies to members, AHPs can help slow

small employers’ otherwise costly movements

from one insurer to another. 

In addition, AHPs will allow small businesses to enjoy a more uniform regulatory 

system. Just as large employers and unions

are able to offer the same health plan to

their workers and members regardless of

which state they live in, AHPs will allow

small businesses to join together across 

state lines to purchase uniform health 

america’s dynamic workforce

Health Savings Accounts (HSAs)

Millions of Americans will get help with their out-of-pocket medical expenses through

President Bush's support of health savings accounts (HSAs). The Medicare bill that

President Bush signed into law establishes new tax-free savings accounts for people and

groups who purchase affordable high-deductible health plans. Those who take advantage of these

accounts will save substantial sums on health insurance premiums and gain more control over

health care spending. The tax-free, portable accounts will help families pay their routine medical

expenses and provide a tax-preferred means of saving for future health care needs.

New health insurance deductions will make coverage more affordable to millions of Americans

whose employers do not provide health benefits. The President's proposal will allow individuals

who establish HSAs to deduct the premiums they pay for their low-premium, high-deductible

health insurance policies. This new deduction will be available

to taxpayers whether or not they itemize. It will reduce the net

cost of these policies and encourage the use of HSAs for saving

for health care needs and making wise, cost-effective health

care choices.

Tens of thousands of people already are saving on their health

care costs through HSAs. These accounts can save families

thousands of dollars on their health insurance premiums.

Americans can deposit some or all of these savings into their

tax-free accounts and use the money for current health care

needs and to save for future medical expenses. Employers also

can contribute to these accounts, which the employee controls.

Instead of sending more money off to insurance companies in the form of higher premiums, families can keep their savings in an account that belongs to them, not to their employer or to an insurance company.
benefits under the protective umbrella 

of ERISA. 

It is important to note, however, that the

pending AHP legislation leaves in place major

elements of state insurance regulation. Much

as in the current group health marketplace,

insurers selling policies to AHPs would be

regulated by the states. 

The AHP legislation passed by the United

States House of Representatives preserves

important state consumer protections for

these insurers, including solvency standards

and prompt pay laws. AHPs that offer selfinsured coverage will be subject to a single,

effective, national certification and oversight

process administered by the Department of

Labor. The legislation provides strict new

solvency standards for these plans to protect

consumers.

AHPs will help ensure that small employers

will not be denied insurance coverage or be

priced out of the market due to the health of

their employees. An employer with high

claims experience would be offered the same

coverage options as other employers within

the sponsoring association. Under the current legislative proposal, AHPs would explicitly be prohibited from setting premium rates

based on health status, effectively restricting

their ability to engage in favorable risk selection, or so-called “cherry-picking.”

Small businesses obtaining insurance 

through AHPs could enjoy significant 

premium reductions. According to the

Congressional Budget Office (CBO), the

average savings would be 13 percent and

could be as much as 25 percent per employer.

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67
68

CBO further estimated that, because insurance will be more affordable, as many as

two million Americans whose employers 

do not offer insurance today will be 

brought into the employment-based health

insurance system. 

AHPs will give small employers and other

members of trade and professional associations real choices in health insurance

options. By providing greater choice and

greater efficiency, AHPs will make the market for health insurance more dynamic,

which will be good for all Americans. 

Conclusions

We need regulations to protect our workers,

but at the same time, we must remember

these regulations impose real administrative

and monitoring costs on both businesses and

enforcement agencies. Designing an ideal

regulatory system requires that we ensure that

the benefits of regulations are real and are

greater than the costs of compliance.

The Department of Labor has successfully

streamlined regulations over the past three

years. We have made sure regulations 

make economic sense and considered their

effects on small businesses. Both employers

and workers have benefited. Employers have

more resources for hiring employees, and

workers have more opportunities to find jobs. 

america’s dynamic workforce
chapter six

69

Notes

i Mercer National Survey of Employer-Sponsored Health Plans, 2004.

ii A “group health plan” is an ERISA-governed welfare benefit plan that provides health coverage. Employers and unions may finance such coverage through commercial insurance, or they may “self-insure,” that is, pay claims out of their own assets. This is an important distinction from

a regulatory perspective because most “self-insured” plans are subject solely to Department of Labor oversight; states retain jurisdiction over

commercial insurance products.

iii U.S. General Accounting Office, “Private Health Insurance: Small Employers Continue to Face Challenges in Providing Coverage,” GAO-02-8;

and “Private Health Insurance: Number and Market Share of Carriers in the Small Group Health Insurance Market,” GAO-02-536R. Insurers

must market and distribute their policies to a very large number of unconnected employers. Insurers also must compensate agents for each

small policy sold or renewed. Some costs, such as the cost of collecting detailed medical histories for purposes of medical underwriting, are

layered on each time an employer changes insurers.

iv Actuarial Research Corporation. Cost drivers include small businesses’ administrative overhead, insurance company marketing and underwriting expenses, adverse selection, and state regulatory burdens. 

v Department of Labor estimates of working families' health insurance status, based on the Census Bureau's annual March Current Population

Survey.

vi Congressional Budget Office, "Increasing Small-Firm Health Insurance Coverage through Association Health Plans and Healthmarts," January

2000.

the challenges ahead
america’s dynamic workforce
chapter seven

73

Introduction

To compete as a nation in today’s global

economy requires each country to recognize

and understand their natural competitive

advantage. For the United States, our competitive advantage can be traced back over

100 years to a time when Bell Telephone,

Ford Motor Company, and the Wright

Brothers flying machines revolutionized

communications and the way we interact

with the world. One hundred years later,

that process continues, only now it is software and micro-processors and mp-3 players that are on the cutting edge. At the 

turn of the last century, we called the pioneers of those technologies inventors.

Today, we have an additional name for

them—innovators. 

It is the constant innovation created by the

United States that has pushed us to the leadership of the world economy, and it is this continuing innovative spirit that will keep us on

top through the next 100 years. Great innovations do not happen though, without three key

advantages already in place: 

■ Investment

■ Infrastructure

■ Talent 

Conditions that foster investment and infrastructure can be brought about through a

combination of market-friendly business conditions and wise community development

practices. But the creation and fostering of

talent, the most important of our three advantages, requires more. 

During his Administration, President George

W. Bush has recognized the vital role that talent plays in our economy and has set an

agenda that will produce, attract and maintain

the most talented workforce in the world.

This agenda has three primary goals: 

1. Help our workforce adapt to change, and

for that, we need a more agile system of

training, support and portable benefits;

2. Stimulate a next generation of Americans

skilled in science, math, and engineering,

as well as in writing and language skills; and

3. Become a magnet for the best global talent.

chapter seven

jobs for the 21st Century
74

The Employment and Training Administration

(ETA) focuses on the first agenda item: Helping

our workforce adapt to change.

The federal government invests $23 billion in

employment and training programs to support

workforce development. Of that, more than

$15 billion in services and programs are

delivered through a nationwide network of

more than 3,500 One-Stop Career Centers.

And, of that, about $11 billion is managed by

ETA in the Department of Labor. 

President Bush believes that these resources

must be more effectively and efficiently used

to ensure American workers have the skills

needed to succeed in the 21st Century economy and American businesses can access the

skilled workers they need in order to thrive

and create new jobs.

To accomplish this, the Administration is seeking to:

1. Provide more flexibility in responding to

local labor market needs for skilled workers;

2. Empower individuals to control their own

careers; and

3. Expand alternatives for the post-secondary

education and training necessary to succeed in virtually all of the jobs of the 21st

Century.

The Workforce Investment Act of

1998

For those stung by sudden job loss or lacking

proper education or skills, the Workforce

Investment Act of 1998 (WIA) provides the

framework for assistance. At the heart of the

workforce investment system are One-Stop

Career Centers. These locally based centers

america’s dynamic workforce

President Bush has set a goal to double the

number of workers receiving job training

through significant reforms to the major Federal

worker training grant programs. The 2005

Budget provides $23 billion for job training 

and employment assistance. This is $500 million

(2.3 percent) more than in 2004 and $2.5 billion

(12.5 percent) more than in 2001. 
provide a comprehensive array of services so

that workers, job seekers, and businesses can

conveniently find the help they need under

one roof in more than 3,500 comprehensive

and affiliated easy-to-reach locations across

the country. 

At One-Stop Career Centers, individuals may

receive: ■ Core services, such as job search and

placement assistance, labor market information, and skills assessments; 

■ Intensive services, such as counseling and

specialized assessments; and

■Training services, usually provided through

Individual Training Accounts that may be

used with eligible training providers. 

WIA also provides services to primarily lowincome youth with barriers to employment. 

In addition, WIA requires cooperation between

the federal-state vocational rehabilitation services program for people with disabilities and local Workforce Investment Boards, One-Stop Career

Centers, and other WIA entities. WIA establishes a principle of universal access to WIA

employment services for all individuals, including people with disabilities. WIA has, through

its advocacy of standards of physical site and

program accessibility, opened a wide variety of

previously unavailable employment-related programs to people with disabilities.

Local business representatives oversee OneStop Career Centers through community-based Workforce Investment Boards. These boards

focus on strategic planning, policy development and oversight of the local workforce

investment system, and determine service priorities for the community. These boards also

chapter seven

75
76

reach out to and welcome input from people

with disabilities to ensure their participation in

crucial local planning efforts.

Three programs under WIA help workers adjust

to economic changes: the Adult Program, the

Dislocated Worker Program, and National

Emergency Grants (NEG). All of these programs are coordinated with the Unemployment

Insurance program when applicable.

The WIA Adult and Dislocated Worker

Programs

The Adult and Dislocated Worker Programs

provide a similar array of services, but target

different populations. The Adult Program

provides workforce services that increase the

employment, retention, earnings, and adult

occupational skill attainment of adult workers. In Program Year (PY) 2002, approximately 475,209 individuals participated in the

Adult Program.

The Dislocated Worker Program is tailored

to assist experienced workers who have

been laid off. In PY 2002, 379,798 individuals received services under the Dislocated

Worker Program. These two programs together provided more than $2.17 billion in

funds to states and local areas in Fiscal 

Year (FY) 2002. 

National Emergency Grants

National Emergency Grants (NEGs) are distributed by the Secretary of Labor to temporarily

expand state and local capacity to help dislocated workers by providing time-limited funding assistance in response to “significant dislocation events.”

For example, not only did the terrorist attacks

of September 11th claim nearly 3,000 lives,

they also temporarily displaced thousands of

workers. Upon receiving a request from the

state of New York, the Department of Labor

responded with a grant of $25 million to run a

temporary jobs program to assist in 9/11-related recovery efforts. 

america’s dynamic workforce

A Speedy Response Nets Benefits

I

n August 2003, Pan-American Life

Insurance Company issued a WARN notice

for layoffs that would affect 100 workers

in the company’s New Orleans, LA office.

Following a downturn in the economy after

the September 11th

terrorist attacks, the

company decided to

close its pension operations department.

The Louisiana

Department of Labor’s

Rapid Response unit

responded to the

WARN notice by setting up an on-site Worker Transition Center.

The Center’s sessions spanned two days and

included an orientation of the services, on-site

completion of registration forms, a job search

workshop and resume assistance. An

impressive 73 of the 100 workers utilized the

Center’s services, and feedback from both the

employer and applicants has been overwhelmingly positive. 

U.S. Department of Labor 

Annual Report, p. 99
Other events, including major worker dislocations resulting from plant closures, mass layoffs, foreign imports, and those resulting from

natural disasters, also create a need for rapid,

targeted assistance. Employment-related assistance supported by NEG funds includes training, job development and placement, supportive services such as child care and transportation for individuals enrolled in training.

Timeliness, though, is the key to delivering

assistance that is effective. A NEG application

and approval process that a few years ago

consumed several months now takes an average of 45 to 53 days. A goal to further reduce

processing time to 30 working days has been

set, and an electronic application process has

been put into place.

One of the most significant plant closures

where NEG funds have been used to assist

workers occurred after the closure of

Pillowtex plants in North Carolina and

Virginia. The Secretary of Labor disbursed

NEGs totaling $18,425,760 to serve 4,581

affected workers in North Carolina

($16,273,909) and Virginia ($2,151,851). 

During the program year that ended June 30,

2004, the Department of Labor awarded NEG

funding totaling $242.9 million to 47 states

and the territories of Guam and Puerto Rico.

Of this amount, NEG funding totaling approximately $47.8 million was approved for states

affected by natural disasters. More than 2,800

dislocated workers were provided temporary

jobs to assist in the clean-up and restoration

activities subsequent to these disasters.

Another approximately $89 million was

approved for 18 states to assist over 19,000

workers affected by trade policies.

With the enactment of the Trade Adjustment

Assistance Reform Act of 2002 by President

Bush, the use of NEG funds was expanded to

support implementation of the Health Coverage

Tax Credit (HCTC). This Act establishes mechanisms by which certain trade-certified individuals and other eligible groups can receive assistance in paying for qualified health insurance

premiums. NEG funds are also authorized to

assist eligible individuals with 65 percent of the

cost of their qualified health insurance premiums until such time as they have been

enrolled, processed and received their first payment by the IRS under the HCTC program. In

addition, NEG funds are authorized to support

the development of infrastructure needed by

the states in carrying out their responsibilities

related to the HCTC. 

chapter seven

77

One Stop for Training and New Employment

L

ois Harris was a dislocated worker from

Century Tool Manufacturing. After visiting her local One-Stop Center to inquire

about training programs, she enrolled in and

completed a computer class. After finishing

that class, she learned about the new DOLfunded advanced manufacturing Integrated

Systems Technology (IST) training program

offered at Rock Valley College in Rockford,

Illinois. After completing the IST program in

July 2003, with the help of the One-Stop

Center, Lois found work at Rockford

Toolcraft. She began working there on

September 3, 2003.

U.S. Department of Labor 

Annual Report, p. 102
78

WARN Notices

In our dynamic economy, many companies

streamline their operations in order to maintain a competitive edge in the marketplace.

While such actions help companies become

more efficient, they also may result in the

closing of facilities and the layoff of workers. 

Under federal law, employers are required to

provide written notice at least 60 days in advance of certain mass layoffs or plant closings.

These so-called Worker Adjustment and Retraining Notification (WARN) notices assure that

assistance can be provided to affected workers,

their families, and their communities through

Rapid Response and early intervention services. 

Rapid Response

When employers inform affected states, Rapid

Response helps dislocated workers find reemployment as quickly as possible by responding

to major layoffs and plant closings. 

Rapid Response teams work with employers

and workers to minimize disruptions associated

with job loss. Services may include information

on the local labor market, education and training opportunities, job search and placement

assistance, resume writing workshops, worker

transition committees, layoff aversion strategies

and incumbent worker strategies, among others. 

Rapid Response and early intervention services play an important role in the successful

reemployment of laid-off workers and help

communities maintain their economic stability

by rapidly adjusting to the effects of layoffs

and plant closings.

america’s dynamic workforce

More Choices for Workers in Training Programs

President Bush has proposed significant

reforms to federal worker training programs to double the number of workers

receiving job training, to ensure those programs work better for America's workers, and

to close the skills gap so we fill every highgrowth job with a well-trained American

worker. The President proposed: 

■ Providing $4 billion in Federal job training 

funds to the nation's governors with less 

federal red tape and more flexibility;

■ Putting strict 

limits on 

overhead in 

major federal job training programs 

by closing 

loopholes 

and enforcing 

limits to 

ensure tax 

dollars support training 

for workers 

who need it, 

thereby reducing overhead costs by an 

additional $300 million;

■ Giving workers more choices about their 

job training by increasing the use of 

personal job training accounts called 

Innovation Training Accounts (ITAs); and

■ Training an additional 200,000 workers 

through programs run by community 

colleges, unions, and businesses.
Providing a More Flexible

Workforce Investment System

The United States is a vast and diverse country that stretches from

the deserts of the

Southwest to the

forests of Maine, from

the sunshine and

beaches of Florida to

the glaciers and tundra of Alaska. No two

states have the same

geography. No two

states have the same

people. And no two

states have the same

economy. 

But today, each of the

50 states must have

the same workforce

investment system to

serve its people and

provide for its economy. That is why

President Bush is proposing to change the

framework of the system, so that each state

and local area has the

flexibility to design

services for its workers that meet the needs of

its local economy. 

Reauthorization of the Workforce

Investment Act 

The first step in creating the President’s proposed framework is the reauthorization of the

WIA. When WIA was originally passed in

August of 1998, Congress set a five-year time

limit so that the legislation could be reviewed

and changes made to make the system it created more effective and efficient. The five

years came to an end on September 30, 2003.

President Bush has proposed reauthorizing legislation that builds on and

improves what works

under WIA, and changes

or eliminates what does

not work. 

President Bush’s proposal

embodies the following

six key principles that

should be enshrined in

the new legislation.

1. More customerfocused and effective

One Stop Career Center

services 

The One Stop system is

an integrated delivery

system for a host of federally funded employment

and training services. It

is an entry point intended

to provide individuals

and businesses with easy

access to relevant labor

market information and

services that are coherent and coordinated.

Specific enhancements under the reauthorization should include:

■ Improving access to a range of products and

services, both in-person and electronically.

■ Bolstering access to services through OneStop Career Centers, including customers

at risk in the labor market, such as dislochapter seven

79

As of August 2004,

DOL has funded 47

High Growth pilot

and demonstration

projects totaling

over $92 million.

These projects have

affected 33 states,

41 Workforce

Investment Boards,

and 94 community

colleges.
cated workers, individuals with disabilities,

current and former welfare recipients,

migrant and seasonal farmworkers, immigrants, older workers, and school dropouts.

■ Establishing easier ways for partners to

share One-Stop Career Center costs.

■ Encouraging states and localities to design

and operate common information systems.

■ Providing increased opportunities for faithand community-based organizations to

participate as partners in the One-Stop

Career Center system.

■ Increasing availability of English as a

Second Language training and other services for Limited English Proficiency individuals through One-Stop Career Centers. 

■ Creating opportunities to try new ideas 

and service approaches.

2. Greater responsiveness to employers 

Business is a customer of workforce investment services, a provider of training, and a

leader and policy setter in the management of

local programs. Specific enhancements under

reauthorization should include:

■ Increasing business 

use of the public 

workforce investment 

system.

■ Informing the workforce investment system

about labor market 

changes and the skills

that are in demand.

■ Identifying training programs that help

individuals acquire requisite skills and ceramerica’s dynamic workforce

80
tifications used by business in hiring and

promotion decisions.

■ Simplifying means of developing financial

partnerships with business.

3. Clarified roles for federal, state, and local

levels

States should have a greater policy role and

more flexibility; there should be more local focus on program design, staff capability, and monitoring of program quality. Specific enhancements under reauthorization should include:

■ Simplifying the governance structure and

empowering states to use workforce investment resources as an economic development tool.

■ Expanding authority for states to build on

existing reforms to improve performance.

■ Providing incentives to encourage state

and local innovation and risk-taking.

■ Extending state flexibility to shift funds

within states based on documented need.

■ Increasing overall focus on grant integrity

and the safeguarding of funds through an

emphasis on programmatic and fiscal

monitoring.

4. Improved program performance

The system should focus on outcomes and

results and use information on outcomes,

quality, and customer satisfaction to drive

change, making sure that data are valid.

Specific enhancements should include:

■ Establishing a core set of common performance measures such as employment,

retention, and earnings that would apply

across partner programs.

■ Creating common definitions and reporting

formats that encourage common state and

local reporting systems for One-Stop partner programs.

■ Providing significant incentives for states

and localities to help individuals and businesses get the services they need, leading

to higher performance levels.

5. Individualized opportunities for training

The workforce investment system should provide customers more choice, control, and customization of services to develop the knowledge, skills, and abilities that are sought after

in the new economy. Specific enhancements

should include: 

chapter seven

81

Regina Whitaker, Forsyth Tech Biotechnology Graduate, Winston-Salem, NC

Regina Whitaker, age 24, worked at Unifi, a textile company in Yadkinville, for four years.

Unifi, like several manufacturing companies in the Triad, was laying off workers, so

Regina enrolled at Forsyth Technical Community College in a program funded by a biotechnology grant in the High Growth Job Training Initiative.

Regina entered the biotech program in the spring of 2003 and graduated in the spring of 2004.

During her education she served as a lab assistant in the chemistry department and a work-study

student for one of the instructors in the chemistry department.
82

■ Providing job training that leads to industry-standard certifications of skills.

■ Simplifying ways for education and training providers to share information about

their successes in preparing individuals for

jobs or career advancement.

■ Authorizing Career Change Scholarships, a

form of Individual Training Account that

would facilitate access to longer-term

training consistent with needed skills and

that would leverage other public and private training resources.

■ Matching more ambitious program goals

and outcomes with richer and more professional services.

■ Encouraging co-enrollment among programs to maximize available training and

related resources and avoid duplication of

effort and expense.

6. Improved youth programs

Youth workforce investment programs should

include a strong education component leading to

a credential and to long-term attachment to the

labor market and life-long learning. Connections

between academic and occupational learning

should be encouraged. Specific enhancements

under reauthorization should include:

■ Improving access to youth program services through One-Stop Career Centers, either

through existing centers or special centers

serving youth.

■ Improving links to the local job market

and other community youth services,

including activities that promote youth

development and citizenship, mentoring,

and follow-up.

■ Improving opportunities for out-of-school

youth.

america’s dynamic workforce

Strengthening and Modernizing Support for 

Vocational Education

President Bush proposed to modernize

the major federal program for vocational

education, the Perkins Vocational Education program, to better serve the needs of

the 21st Century worker. The President's proposal redirects $1 billion in annual funding

from the

Perkins

Vocational

Education

program

into a new

Secondary

and

Technical

Education

program

(Sec Tech)

and

requires

that high

schools

participating in the

program

offer four

years of

English,

three years

of math and science, and three years of social

studies, in addition to their vocational education curriculum. The program would continue

to support the work of community and technical colleges to prepare youth and adults for

tomorrow's jobs.
Both the House of Representatives and the

Senate have passed bills reauthorizing the

Workforce Investment Act. The Administration hopes that both Houses of Congress will

meet to reconcile the differences between the

bills and pass final legislation that promotes

the key principles described above.

President Bush’s High Growth Job

Training Initiative

A workforce development strategy that helps

workers when they are down is too late. The

Bush Administration instead sees workforce

development through the forward-looking

eyes of economic development. We believe a

better strategy gets ahead of unemployed

workers’ plight by first identifying and then

training them in the skills that employers and

our innovative economy will demand of them.

Our approach explains why we have been

focused on bringing educators and employers

to the table with workforce professionals so

that they can collaborate to prepare workers

for 21st Century careers. 

The President’s High Growth Job Training

Initiative is a strategic effort to prepare workers to take advantage of new and increasing

job opportunities in high-growth/high-demand

and economically vital industries and sectors

of the American economy. The initiative is

designed to ensure that worker training and

career development resources in the public

workforce system are targeted to helping

workers gain the skills and competencies they

need to obtain jobs and build successful

careers in these industries.

The foundation of this initiative is partnerships

that include the public workforce system,

business and industry, education and training

providers, and economic development working collaboratively to develop solutions to the

workforce challenges facing these industries.

Through the following roles, each of the partners will help to develop maximum access for

American workers to gain the competencies

they need to get good jobs in these industries:

■ Industry representatives define the workforce challenges, e.g., getting career and

skill information to young people who are

charting their education and career courses; accessing new labor pools; defining

core competencies for success on the job;

training workers; building the capacity of

educational institutions to train workers.

■ Community colleges and other education

and training providers assist in developing

competency models and curricula to build

core competencies, and train workers.

■ The public workforce system accesses

human capital (youth, unemployed and

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83

Kennikqua Thompson, Licensed Vocational Nurse,

West Houston Medical Center, Houston, TX

Kennikqua worked as a medical assistant for two years when the medical

group she worked for closed down.

She had always wanted to be a nurse but

never had the time or money needed to pursue a nursing career. Through the HCA Cares

Scholarship Program, part of the Health Care

High Growth Job Training Initiative, she was

able to achieve her goals of becoming a

nurse and gaining job security. Kennikqua

expects to gain advanced nursing skills, medication knowledge and techniques to help

provide excellent patient care.
■ Health Care

■ Information Technology

■ Biotechnology

■ Geospatial Technology

■ Automotive

■ Retail

■ Advanced Manufacturing

■ Construction

■ Transportation

■ Hospitality

■ Financial Services

■ Energy

84

dislocated workers) and places trained

workers in jobs.

To model this approach, the High Growth Job

Training Initiative has initially identified twelve

sectors at the national level that: (1) are projected to add substantial numbers of new jobs to

the economy; (2) have a significant effect on

the economy overall; (3) affect the growth of

other industries, (4) are being transformed by

technology and innovation requiring new skills

sets for workers; or (5) are new and emerging

businesses that are projected to grow.

america’s dynamic workforce

America’s growing economy is also a changing

economy. As technology transforms the way

almost every job is done, America becomes more

productive, and workers need new skills. Much

of our job growth can be found in high-skilled

fields like health care and biotechnology. So we

must respond by helping more Americans gain

the skills to find good jobs in our new economy.

-President George W. Bush, 

January 20, 2004

“

“
The High Growth Job Training Initiative is

investing in national models and demonstrations of workforce solutions in these sectors

designed to achieve the following outcomes:

■ Targeted investment of workforce development resources and support for private and

public sector partnerships to ensure the

development of workers’ skills in demand

occupations based on industry need.

■ Increased integration of community and 

technical college efforts with business and 

the public workforce system activities to

meet the skills training needs of highgrowth industries.

■ Increased opportunities for employers to

use apprenticeship training as skills development methodology, combining on-thejob training and academics, to ensure a 

pipeline of skilled workers.

■ Providing workers with paths to career 

enhancing opportunities in high growth

occupations. By expanding the local workforce system’s capacity to be market-driven,

responsive to local economic needs, and a

contributor to the economic well-being of

the community, the Employment and 

Training Administration is promoting workforce quality, enhanced productivity, and 

economic competitiveness.

By expanding the local workforce system’s

capacity to be market-driven, responsive to

local economic needs, and a contributor to

the economic well-being of the community,

the Bush Administration is promoting workforce quality, enhanced productivity, and economic competitiveness.

The first action that was taken to understand

and implement industry-identified strategies to

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85
86

confront critical workforce shortages was in the

health care sector. For the past nine months,

the Department of Labor has taken part in

forums conducted by associations representing

thousands of health care institutions, and considered viewpoints expressed in-person by over

300 health care leaders. Solutions that were

adopted as a result of eight forums now act as

national models

through the

President’s High

Growth Job

Training Initiative. 

This set of solutions cuts across

the national labor

needs of the

health care

industry in acute

care, long term

care, and allied

health care professions. It also

addresses the

unique challenges facing rural areas. On the whole, 22

healthcare grants totaling more than $34 million are being funded across the nation. They

are intended to provide genuine solutions,

leadership, and models for partnerships that

can be replicated in different parts of the country.

The second action that was taken to address

employers’ workforce needs occurred in the

biotechnology industry. DOL hosted forums

over the past year with biotechnology industry

leaders, educators, and the public workforce

system to learn about this new and exciting

industry, understand the workforce challenges

that such a young industry faces and develop

solutions to those challenges. 

The challenges they face, however, are far

too complex for one institution or industry

sector to solve alone. DOL is supporting

comprehensive business, education, and

workforce development partnerships. These

have developed

innovative

approaches that

address the workforce needs of

business while

effectively helping workers find

good jobs and

promising career

pathways in the

biotechnology

industry.

Overall, ten

biotech grants

totaling more than

$18 million are

being funded across the nation. They are

intended to provide genuine solutions, leadership and models for partnerships that can be

replicated in different parts of the country.

For both industries, the solutions to their

workforce challenges can be broadly categorized under the following areas:

■ Expanding the pipeline of youth entering

the professions; 

■ Identifying alternative labor pools such as

immigrants, veterans, and older workers

that can be tapped and trained; 

america’s dynamic workforce

We need to close the skills

gap in America. 60 percent

of the new jobs require

post-secondary education,

which is currently held by

only one-third of America’s

workforce.
■ Developing alternative training strategies

for educating and training professionals,

such as apprenticeship, distance learning,

and accelerated training; 

■ Developing tools and curriculum for

enhancing the skills of professionals for

nationwide distribution;

■ Enhancing the capacity of educational

institutions through increased numbers of

qualified faculty and new models for training;

■ Developing strategies to retain and help

current health care workers move into

higher level positions in shortage areas;

■ Helping workers in declining industries

build on existing skills and train for health

care professions.

The President’s Job Training Reform

Proposal

As the world becomes a true global economy

where labor from one country must compete

against the labor available in every other

country, the importance of education and

training becomes magnified. Recognizing this

and building on the experiences of the High

Growth Job Training Initiative and the proposal to reauthorize the Workforce Investment

Act, President Bush announced on April 5,

2004, an over-arching reform and redesign

proposal for the workforce investment system.

The President’s Job Training Reform Proposal

is a vision for how the workforce investment

system needs to operate to remain effective in

this global economy. It builds on the flexibility proposed under the Workforce Investment

Act reauthorization proposal and challenges

the workforce investment system to double

the number of individuals trained by reducing

administrative and infrastructure costs and expanding access to Innovation Training Accounts.

These proposed Innovation Training Accounts

would provide workers with more flexible and

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87
88

responsive assistance. Workers would have

more job training choices — they would be

able to use community colleges, private-sector

training providers, local businesses, or community organizations — to get the help they

need in the most effective and efficient way

possible. These ITAs would allow workers

considerable flexibility to tailor training programs to meet their needs.

The Workforce Investment Act reauthorization

proposal, the President’s High Growth Job

Training Initiative, and the President’s Job

Training Reform Proposal all seek to change the

workforce investment system so that it is best

positioned to serve our nation’s businesses and

our nation’s workers as they compete in this

global economy. As the next section highlights, serving America’s workers does not

mean that the workforce system makes all the

decisions. Instead it provides individuals with

the tools and information so that they can

make the decisions that are best for themselves.

Empowering Individuals to Control

Their Own Careers

Americans are better off when they make the

decisions that affect their lives rather than

having government make those decisions.

america’s dynamic workforce

Better Education for Better Jobs

T

he President's initiatives will result in

more students graduating from high

schools and colleges with the skills they

need to compete for the jobs of the 21st

Century. Encouraging more students to pursue math and science will also help the

United States continue to lead the world

in innovation and

will result in better

jobs and a brighter

economic future for

young Americans.

With a better trained

and better educated

workforce, America

will continue to be the best place in the world

to do business. The President's plan strengthens and modernizes vocational and technical

education, expands math and science education for all students, enables more lowincome students to pursue degrees in math

and science, and enables educators to determine whether high schools are graduating

students with the skills they need to succeed.

Reforming the Workforce Investment Act would 

maximize the available Federal dollars going to

workers and eliminate unnecessary overhead

costs by $300 million.
They can weigh the options before them and

make whatever decision is best given individual circumstances. Citizens need material to

make informed decisions and tools to carry

out their plans. 

Personal Reemployment Accounts

To empower people to take control of their

own careers, the Administration has proposed

a new way to serve vulnerable jobless

Americans: Per-sonal Reemployment Accounts

(PRA). This proposal would make resources

available to unemployed persons most at risk

of exhausting their benefits. Such accounts

would provide them the flexibility and means

to get the training or assistance they most need

to advance their careers. Getting people back

to work, as opposed to increasing funding

reflexively for ineffective programs, has been

and remains this Administration’s chief goal.

The FY 2005 Budget requested $50 million

to fund a PRA pilot project which would distribute up to $3,000 to selected unemployment

insurance claimants who are most likely to

exhaust their benefits or have already exhausted those benefits. The project would demonstrate the value of providing flexible, self-managed financial assistance for unemployed workers attempting to return to the workforce as

quickly as possible. For example, people

would have the flexibility to use part of these

funds for child care as they spend several

weeks interviewing for jobs, while others may

need to purchase a bus pass to get to the community college for training. In each instance, it

is the individual who makes the decision on

how best to spend that money.

Based on prior research as well as experience

with the use of Individual Training Accounts

under the Workforce Investment Act, the pilot

is expected to demonstrate several outcomes:

■ An increase in the number of workers served;

■ A reduction in the amount and duration of

unemployment insurance; and

■ A faster return to the workforce. 

These results will be accomplished through

empowering individuals with the resources they

need to secure employment and through incentives that promote finding and retaining a job. 

Funds for the PRA project, which supports the

guiding principle that resources and decisionmaking should lie with the individual, will be

awarded to states through a competitive grant

process. 

Launching the PRA project as a pilot allows

the system to demonstrate the value of the

accounts based on outcomes achieved before

deciding to take it to a larger scale. It also

provides the flexibility to test varied designs

and identify which models work best.

chapter seven

89

President Bush has

proposed a $50 million Personal

Reemployment Account

pilot program to help

unemployed workers who

have the hardest time

finding jobs choose the

services they need to

return to work, including

assistance with training,

child care, and transportation costs.
90

The President’s Jobs for the 21st

Century Initiative: Expand

Alternatives for Post-Secondary

Education and Training

With education and training becoming critical

components for success in today’s economy,

the United States must improve the quality of

education at our nation’s high schools to better prepare students for success both in higher

education and in the job market. Options for

post-secondary education must be expanded

beyond traditional four-year colleges so that

alternatives such as community colleges are

widely available. 

President Bush’s plan to accomplish this is the

Jobs for the 21st Century Initiative. At the middle

school and high school levels, the Initiative

includes an increased emphasis on math and

science classes, expanded opportunities for

Advanced Placement courses, and greater comprehensive reading instruction to help struggling

students catch up to their peers in reading. 

To build on this stronger education base and

provide young adults with the skills needed to

begin a career, the President has two higher

education proposals that will strengthen the

access to post-secondary education and training opportunities. The first is an enhanced Pell

Grant program that will reward low-income

students who participate in a rigorous high

school curriculum. The second proposal is to

establish Community-based Job Training Grants

to build the capacity of community colleges to

america’s dynamic workforce

Improving High School Education

T

he President's plan will improve the quality of education at our nation's high schools and better prepare students for success in higher education and the job market. The plan includes the

following initiatives:

■ Creation of a Striving Readers Initiative to provide extra help to middle and high school students 

who fall behind in reading. The President's FY 2005 budget provides $100 million for the 

Striving Readers Initiative.

■ Increased funding for the Mathematics and Science Partnership Program to provide extra help 

to middle and high school students who fall behind in math. The President's FY 2005 budget 

provides an additional $120 million for the Program.

■ Expansion of Advanced Placement (AP) programs in low-income schools. The President's FY 

2005 budget provides an increase of $28 million for the expansion of AP programs.

■ Incentives to invite math and science professionals from the private sector to teach part-time in 

our high schools. The President's FY 2005 budget also includes $227 million in loan forgiveness 

for math, science, and special education teachers in low-income schools.

■ Funding to make the State Scholars program, which requires four years of English, three years 

of math and science, and three years of social studies, available nationwide. State Scholars 

encourages high school students to take more rigorous courses to prepare them for college and 

the workplace.
become key workforce development training

providers in communities all across the nation. 

Community colleges possess certain strategic

advantages that make them ideal as primary

workforce training options. They have over

1,100 campuses nationwide and are easy to

get to for the majority of the population.

There are night and weekend classes, making

them accessible to parents and working Americans who are available only certain hours for

class. Finally, the have a flexible academic

structure that allows them adapt curricula to

meet the demands of our changing economy. 

These advantages are extremely important.

But they do not guarantee the training of a

skilled workforce. It is only through the partnerships with employers that these advantages

are fully realized. Partnerships among industry, community colleges and the public workforce system will be a critical economic

development tool in every labor market.

And finally, to see that every worker has the

opportunity to access these services, more

funding will be devoted to Innovation Training

Accounts so more workers can access the

education and training they need to access

good jobs and career opportunities. Together,

the President’s Jobs for the 21st Century

Initiative will better prepare students and

workers for the global economy by improving

high school in the core areas of reading,

math, and science and strengthening the

opportunities for post-secondary job training.

CareerVoyages.Gov

To empower individuals to take control of their

own careers, the Administration has provided

more and better career information to young

people, their parents, guidance counselors and

transitioning workers through a new web site,

www.careervoyages.gov, produced in partnership with the Department of Education. The

web site takes new and transitioning workers

on a “roadtrip” to discover the career opportunities of today and tomorrow, with the education and skills required to travel successfully.

Career Voyages provides career information

and choices for varying levels of education or

training background. Career information on

the site includes:

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91

The President’s Jobs for the 21st Century

Initiative includes a $250 million proposal to 

help America’s community colleges train 100,000

additional workers for the industries that are 

creating the most new jobs.
92

■ Occupations that are growing fastest

nationally and within each state, as well as

emerging and evolving industries;

■ Career ladders within each high growth

industry; 

■ Skills, education, and training required for

these positions;

■ Detailed occupational reports including

wages, growth rates, and licensing requirements;

■ Career videos, as well as links to actual

job descriptions and jobs in their local

community; and

■ Specialized resources for youth, career

changers, adults, and career advisors.

Although some career paths described on the

web site require a four-year degree, Career

Voyages has something for everyone,

whether they have a high school diploma,

on-the-job training, apprenticeship certification, vocational certificates, or two-year professional degree programs at community colleges. These can all lead to promising

careers. 

Conclusion

For over two centuries, the United States has

overcome all the obstacles placed in its path

and matured to become the world’s leading

economy. We accomplished this through the

strength of our people and the commitment

of our nation to freedom and opportunity. It

is these traits that will carry us through this

transition and make us a stronger, more

vibrant nation; one that continues to drive

the world’s economy for the next century.

america’s dynamic workforce
The greatest constant in U.S. economic history

has been change. Americans are constantly

adjusting to meet new demands and utilize

new technologies. New jobs require new

skills. By analyzing trends in the economy,

we can make projections for the future and

help prepare the American workforce for

tomorrow’s economy. 

Predicting the Future

The nation’s predominant industries and occupations have drastically changed over the

course of the last century and even the last

decade.

■ At the turn of the last century, 40 percent 

of all U.S. workers were employed in 

agriculture. Today, fewer than 2 percent 

work in that industry. 

■ At its height during World War II, manufacturing employed nearly four of every 

ten workers in this country. By 2002, the 

figure had fallen to one of every nine 

workers. 

chapter eight

93

chapter eight

the jobs of the future: 2002 - 2012

■ In 1994, there were a reported 916,000 

computer systems analysts and scientists. 

By the end of the decade, that number 

had nearly doubled, rising to 1.8 million 

workers. 

■ Over the 2002-12 decade, BLS projects 

that employment in healthcare occupations will grow by 2.9 million, an increase 

of more than 28 percent.

The pace of employment change is not always

so dramatic, especially in the shorter term.

Because of the dynamic nature of the U.S.

economy, the speed of technological innovation, and the changing demands by employers

for skilled employees, it is essential that the

best and latest information is available to individuals who are making decisions about education, training, and careers. 

This chapter examines the ten-year projections of the labor force, industry output and

employment, and occupational employment.

What will be the trends in labor force growth

for the population, for men and women, and

for minority groups? What industries will be

the source of job growth? What will be the

high-paying, in-demand occupations that will

provide employment opportunities for U.S.

workers? And what levels of education and

training are generally required to enter these

occupations?
94

america’s dynamic workforce

A Note of Caution

I

t is important to remember that long-term employment projections of occupations and industries

are speculative, and actual employment trends may differ from the projections. BLS regularly

compares its employment projections with actual employment trends to evaluate the accuracy of

the models, assumptions, and analytical judgments that underlie the projections. 

The objective of these evaluations is to improve future projections. The most recent evaluation

examined projections made in the late 1980s of occupational employment trends during the period

from 1988 to 2000. 

Of the 338 occupational employment projections evaluated for the 1988-2000 period, BLS projected the direction of the employment change correctly for about 70 percent of the occupations. For

each occupation, BLS classified the direction and rate of the employment change into the following

6 categories:

■ Declining (decrease of 4 percent or more)

■ Little or no change (increase or decrease of 3 percent or less)

■ Slower than average (increase of 4 to 10 percent)

■ Average (increase of 11 to 19 percent)

■ Faster than average (increase of 20 to 30 percent)

■ Much faster than average (increase of 31 percent or more)

Overall, the actual growth for 87 of the 338 occupations (26 percent of the total) fell into the category that was projected. Another 100 occupations (30 percent of the total) were 1 category higher

or lower than projected. The 1988-2000 projections were more accurate for occupations that were

predicted to have much faster than average employment growth or declining employment. Of the

occupations predicted to have much faster than average employment growth, 66 percent of them

actually had much faster than average growth. Of the occupations predicted to experience declining employment, 50 percent of them actually experienced declining employment. By comparison,

of the occupations predicted to have average growth, only one-fifth experienced average growth,

with roughly the same proportions experiencing much faster than average growth, little or no

change, and declining employment.

Even with the information learned from these evaluations, employment projections will remain

inherently speculative and sometimes significantly wrong. Occasionally, unforeseen changes in

technology, business practices, and government regulations affect occupational and industry

employment patterns significantly, frequently resulting in projection error. Likewise, events such as

the timing of business cycles, the onset of international conflicts, and the occurrences of natural disasters are difficult to predict and often affect the accuracy of projections.
In February of 2004, BLS published ten-year

long-term projections of employment growth

for 725 occupations covering the period from

2002 to 2012. These projections are based

on a model of the U.S. economy which

assumes relatively strong long-term growth in

output and productivity and relatively low

unemployment rates. In particular, it is

assumed there will be annual growth rates of

3 percent for real Gross Domestic Product

and 2.1 percent for labor productivity. The

BLS projections are also based on an economy with an unemployment rate of 5.2 percent

in 2012. (See Chart 8.1.)

Using these general macroeconomic assumptions, BLS estimates how much output will be

produced by industries and the total number of

jobs needed to produce this output. Based on

both expert analysis of occupations and a rich

data base on the occupational staffing patterns

of detailed industries (the biannual Occupational Employment Statistics survey of 400,000

establishments), the BLS also projects the employment levels in 725 occupations and the

education and training levels of those jobs. 

Labor Force Projections

BLS projects that the labor force will grow by

1.1 percent per year between 2002 and 2012,

similar to the 1.1 percent annual growth rate

during the prior ten years. The growth rate of

the population and the labor force has slowed

considerably after the arrival of the Baby

Boom generation into the labor force in the

1970s. (See Chart 8.2.)

Over the last 50 years the labor force participation rates of women have increased remarkably, rising from 34 percent in 1950 to 60 percent in 2002. As Chart 8.3 indicates, this

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96

america’s dynamic workforce

increase has slowed substantially in the last

20 years, but still exceeds those of men. For

men, the pattern has been one of declining

participation rates, although the pace of

decline has also slowed in the last two

decades. BLS projects a continuation of this

pattern between 2002 and 2012. (See Chart

8.3.) As a result, the share of the labor force

made up of women is projected to be 48 percent by 2012.

The labor force growth rates of minority populations are projected to continue their rapid

pace and exceed those of whites over the projections period. (See Chart 8.4.) Whites will

continue to be the dominant demographic

group in the labor force, although their shares

are gradually declining due to their relatively

slower growth rates.

High Growth Employment: 

A Focus on Industries

BLS develops projections for

284 detailed industries that

fall under the 22 major industry sectors described above.

Which of these detailed

industries will grow faster

than average, and what will

be the net employment

increase in these industries

over the projections period?

Which of these fast growing

industries will contribute the

greatest increase in employment? And, despite the overall declining levels of

employment in manufacturing, are there detailed manufacturing industries

that will experience strong employment

growth? 

Table 8.1 Employment by Industry and Percent Distribution, 2002 and Projected 2012
Table 8.1 provides a list of the top ten detailed

industries expected to experience faster than

average employment growth. Three of the top

ten are in the information sector, four of the

top ten are in the health care and social assistance industry, and two of the top ten are in

the professional, scientific, and technical services sector.

Table 8.2 provides a list of all of the fastemployment-growing detailed industries.

These industries are presented under their

major industry group, and are in order of their

projected change in employment levels. Four

detailed construction industries are projected

to grow faster than average, including the

building equipment contractors industry with

a projected employment increase of over

430,000 jobs. There are a number of fast

growing manufacturing industries, including

the plastics product manufacturing industry

that is projected to grow by more than

128,000 jobs. 

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america’s dynamic workforce

Total employment, all workers1

Wage and salary workers2

Agriculture, forestry, fishing and hunting

Support activities for agriculture and forestry

Construction

Building equipment contractors

Foundation, structure, and building exterior contractors

Other specialty trade contractors

Building finishing contractors

Manufacturing

Pharmaceutical and medicine manufacturing

Cement and concrete product manufacturing

Other wood product manufacturing

Architectural and structural metals manufacturing

Plastics product manufacturing

Veneer, plywood, and engineered wood product manufacturing

Other general purpose machinery manufacturing

Forging and stamping

Metalworking machinery manufacturing

Animal slaughtering and processing

Wholesale trade

Electrical and electronic goods merchant wholesalers

Lumber and other construction materials merchant wholesalers

Professional and commercial equipment and supplies merchant wholesalers

Drugs and druggists' sundries merchant wholesalers

Furniture and home furnishing merchant wholesalers

Metal and mineral (except petroleum) merchant wholesalers

Retail trade

Used merchandise stores

Electronic shopping and mail-order houses

Electronics and appliance stores

Other miscellaneous store retailers

Book, periodical, and music stores

Office supplies, stationery, and gift stores

Home furnishings stores

Building material and supplies dealers

Sporting goods, hobby, and musical instrument stores

Furniture stores

Other motor vehicle dealers

Department stores

Specialty food stores

Lawn and garden equipment and supplies stores

Transportation and warehousing

Urban transit systems

Other transit and ground passenger transportation

Local messengers and local delivery

Nonscheduled air transportation

Couriers

Support activities for rail transportation

Scenic and sightseeing transportation, other

Other support activities for transportation

Charter bus industry

School and employee bus transportation

Warehousing and storage

Support activities for road transportation

Freight transportation arrangement

General freight trucking

Specialized freight trucking

Scenic and sightseeing transportation, land

Taxi and limousine service

Utilities

Water, sewage and other systems

Information

Software publishers

Internet service providers and web search portals

Wireless telecommunications carriers (except satellite)

Internet publishing and broadcasting

Data processing, hosting, and related services

Cable and other subscription programming

Cable and other program distribution

Motion picture and video industries

Other information services

Sound recording industries

Finance and insurance

Activities related to credit intermediation

Other financial investment activities

Other investment pools and funds

Nondepository credit intermediation

Real estate and rental and leasing

Commercial & industrial machinery & equipment rental & leasing

Consumer goods rental

General rental centers

Lessors of nonfinancial intangible assets (except copyrighted works)

Activities related to real estate

Offices of real estate agents and brokers

Professional, scientific, and technical services

Management, scientific, & technical consulting services

Computer systems design & related services

Other professional, scientific, & technical services

Specialized design services

Accounting, tax preparation, bookkeeping, & payroll services

Legal services

Advertising & related services

Administrative & support & waste management & remediation services

Employment services

Investigation & security services

Facilities support services

Remediation & other waste management services

Waste treatment & disposal

Office administrative services

Other support services

Services to buildings & dwellings

Waste collection

Educational services, private

Educational services, private

Health care & social assistance

Other residential care facilities

Home health care services

Community care facilities for the elderly

Vocational rehabilitation services

Community food & housing, & emergency & other relief services

Offices of other health practitioners

Other ambulatory health care services

Individual & family services

Residential mental retardation, mental health & substance abuse facilities

Child day care services

Offices of physicians

Medical & diagnostic laboratories

Outpatient care centers

Offices of dentists

Nursing care facilities

Arts, entertainment, & recreation

Other amusement & recreation industries

Gambling industries

Amusement parks & arcades

Independent artists, writers, & performers

Spectator sports

Museums, historical sites, & similar institutions

Agents & managers for artists, athletes, entertainers, & other public figures

Accommodation & food services

Special food services

RV (recreational vehicle) parks & recreational camps

Traveler accommodation

Full-service restaurants

Other services (except government)

Personal care services

Religious organizations

Business, professional, labor, political, & similar organizations

Other personal services

Social advocacy organizations

Commercial & industrial machinery & equipment 

(except automotive & electronic) repair & maintenance

Automotive repair & maintenance

Government

Local government educational services

State government educational services

Table 8.2 Employment by Industry and Percent Distribution, 2002 and Projected 2012

14.8

16.3

18.4

23.5

17.8

17.7

14.9

23.2

20.9

20.9

19.3

19.2

18.4

17.7

16.2

15.5

15.4

22.6

19.8

19.8

18.3

17.0

16.4

47.5

45.3

38.2

37.3

34.5

29.3

27.2

22.6

18.9

18.4

18.3

18.1

17.7

15.4

47.9

47.8

46.4

43.5

41.1

36.2

34.8

33.6

31.4

30.2

28.6

28.4

27.5

20.8

19.7

19.6

16.8

46.4

67.9

64.2

50.5

41.1

40.8

36.5

35.2

31.1

30.7

15.0

26.3

22.6

16.6

16.3

39.7

37.4

36.3

33.1

18.9

15.7

55.4

54.6

36.7

30.8

24.8

19.6

18.9

54.3

46.7

40.6

33.3

28.4

26.2

25.0

24.0

21.0

28.6

58.8

55.8

53.8

49.5

49.0

48.8

47.5

45.6

43.9

43.1

38.8

37.6

34.2

30.9

22.3

31.9

30.8

28.3

26.9

22.3

21.2

19.2

25.0

18.8

17.0

16.1

27.6

24.4

23.4

23.2

19.5

18.7

16.7

17.5

17.5

21,305,070

21,603,400

17,800

432,500

162,900

102,800

131,300

68,000

48,000

66,700

77,300

128,100

21,400

51,000

18,400

33,700

80,300

83,000

44,600

130,300

38,900

18,300

20,700

51,300

101,600

202,100

110,700

77,700

127,500

70,400

232,200

82,300

51,700

25,900

309,400

44,800

23,500

18,400

26,600

25,300

18,900

207,100

7,500

800

10,900

11,000

46,400

146,700

20,000

45,900

199,300

75,500

1,800

11,100

22,500

173,700

91,200

98,900

14,300

124,500

33,900

45,000

111,900

14,300

4,100

66,900

59,200

6,400

112,300

40,600

108,500

22,800

9,200

83,600

47,000

405,600

635,000

179,200

37,900

214,700

218,100

83,500

1,763,500

338,800

42,100

32,100

34,000

75,200

72,400

382,900

21,200

759,200

97,100

376,600

285,200

186,200

61,500

234,900

87,500

349,600

208,000

316,100

770,100

65,500

140,200

223,900

351,300

324,100

42,100

43,500

10,800

26,300

23,900

2,800

126,700

7,800

292,600

640,900

144,100

400,800

117,900

50,700

33,600

29,200

149,400

1,341,700

388,300

Industry Percent change Numeric change Industry Percent change Numeric change
chapter eight

99

Nine of the ten detailed industries in the information sector are projected to have employment increases of more than 30 percent. Five

of these are projected to have employment

growth exceeding 40 percent: software publishers; internet service providers and web

search portals; wireless

telecommunications carriers (except satellite);

internet publishing and

broadcasting; and data

processing, hosting, and

related services. 

Fourteen of the 15 fast

growing detailed industries in the health care

and social assistance

sector are projected to have employment

increases of more than 30 percent. These

health-care related industries reflect a diverse

mix of delivery systems for health care ranging from home-based care, ambulatory and

outpatient care facilities, offices of physicians,

vocational rehabilitation services, and nursing

care facilities. 

The professional, scientific, and technical

services industry

has a number of

fast growing

detailed industries,

especially the

management, scientific, and technical consulting

industry and the

computer systems

design and related

services industry,

both with projected employment changes exceeding 

50 percent.

High Growth Employment: A Focus

on Occupations

The growth in industry

output and employment

has a significant effect on

both the number of jobs

and the types of occupations that will be in

demand by employers.

Which occupations will

grow the fastest and how

many jobs will these

occupations produce?

Which occupations will

provide the best earnings opportunities? And

what are the educational and training requirements of these jobs? What share of jobs will

be available for individuals with education and

training beyond high school but without a fouryear college degree? Are there good jobs for

those with only a high school degree?

One of the most consistent findings in studies

of labor markets is the increasing return to

educational attainment. As Chart 8.5

demonstrates, earnings rise and unemployment rates fall

with higher levels

of education.

These are average

levels of earnings

for each education

group. What the

chart does not

reflect is that with-

...earnings rise and

unemployment rates

fall with higher 

levels of education.
america’s dynamic workforce

in each group there can be substantial variation in earnings depending on what kind of

occupation an individual is in.

Focusing on high-growth, high-wage occupations and the education and training requirements of those occupations provides a richer

and more detailed picture of employment

opportunities than just looking at the returns

to education alone. Of course, the analysis

depends critically on how high-growth and

high-wage occupations are defined. The

approach taken here is to define a highgrowth occupation as one with an employment change between 2002 and 2012 that is

projected to be greater than the overall average of 14.8 percent. A high-wage occupation

is one that had average earnings in 2002 that

are in the top half of the overall distribution of

earnings (based on data from the 2002

Occupational Employment Statistics survey).

BLS has derived 11 education and training

categories that describes for each occupation

the most significant education or training

pathway to employment. For some occupations, the education and training preparation

may be very straightforward because government laws and regulations establish it, as it is

for physicians and lawyers. In other occupations, such as computer programmers or

industrial machinery repairers, jobs may vary

considerably in their educational and training

requirements. When an occupation has more

than one path of entry, BLS identifies the one

that research suggests is most preferred by

employers and likely to lead to the best

advancement prospects.

The 11 categories of education and training

are: 

100
chapter eight

101

1. First professional degree

2. Doctoral degree

3. Master’s degree

4. Bachelor’s or higher degree, plus work 

experience

5. Bachelor’s degree

6. Associate degree

7. Postsecondary vocational award

8. Work experience in a related occupation

9. Long-term on-the-job training

10. Moderate-term on-the-job training

11. Short-term on-the-job training

The grouping of occupations into the six educational clusters along with information on the

most significant source of postsecondary education and training provides a natural hierarchical sorting of occupations based on the training

and skill requirements found within each cluster. It is not surprising that high school occupations all have short, moderate or long-term onthe-job training as their most significant source

of education and training.

Further, it is not surprising that college occupations all have bachelor’s degree or higher

as their most significant source of education

or training. It is the mixture occupations that

reflect a substantial diversity in the pathways

to entry into occupations. In general, the

“high school / some college” occupations

have a greater concentration of the short,

moderate, and long-term training categories

as their single descriptor while the “some

college / college” occupations have a greater

concentration of higher education awards as

their single most significant source of education or training.

The widest range of training and education

categories is found in the full mixture occupation, “high school / some college / college”

occupations. An occupation such as flight

attendant is classified as requiring long-term

on-the-job training as its most significant

source of education or training, but the hiring

pattern of employers results in a diverse mix

of those with high school, some college and

bachelor’s degree or higher backgrounds.

This reflects the interplay between training

requirements and employer preferences for

characteristics such as so-called “people”

skills that can result in substantial diversity in

the educational attainment of those hired into

this occupation.

The list of high-growth, high-wage occupations in Table 8.3 provides a wide range of

career options and opportunities for U.S.

workers at all levels of educational attainment. The high-school occupations listed

contain several construction-related occupations, including 3 that are projected to add at

least 25,000 jobs over the projections period:

drywall and ceiling tile installers, cement

masons and concrete finishers, and roofers.

The high-school/some-college occupations

include a large number of fields requiring the

acquisition of technical knowledge related to

repair, installation, and the operation of various types of equipment. These include,

among others: maintenance and repair workers; first-line supervisors of mechanics,

installers, and repairers; heating, air conditioning and refrigerator mechanics and

installers; telecommunications line installers

and repairers; truck drivers (heavy and tractortrailer); and bus drivers (transit and intercity).

There are also a number of constructionrelated occupations, including: electricians;
plumbers, pipefitters, and steamfitters; sheet

metal workers; and structural iron and steel

workers. There are also a number of production-related occupations including: welders,

cutters, solderers, and brazers; and water 

and liquid waste treatment plant and systems operators.

The high-school/some-college/college occupations reflect a more diverse mix of skill

requirements including a large number of

service-providing fields, especially sales

related including sales representatives for

wholesale and manufacturing and technical

and related products. This list also includes

a number of management-related occupations such as general and operations managers; administrative service managers; and

transportation, storage and distribution managers. There are a number of fields requiring

highly technical levels of skills such biological technicians; health practitioners and

technical workers; and life, physical and

social science technicians.

The some-college/college occupations

include a significant number of health and

computer-related fields requiring more extensive academic preparation. Some of the

health-related fields include registered nurses; physicians assistants; dental hygienists;

medical and clinical laboratory technologists

and technicians; respiratory therapists; radiologic technologists and technicians; cardiovascular technologists and technicians; and

physical therapist assistants. 

The computer-related occupations include:

computer systems analysts; database administrators; network and computer systems administrators; and computer support specialists.

There is a broad mix of other occupational

fields represented in the list including adult

literacy, remedial education and GED teachers and instructors; self-enrichment education

teachers; police and sheriff patrol officers; private detectives and investigators; graphic

designers; multi-media artists and animators;

and interior designers.

The college occupations naturally reflect a

broad mix of professional occupations that generally require at least a bachelor’s degree or

higher. Again, there are a large number of

health-related and computer-related fields. Other

general fields with a substantial number of

occupations include education, science, engineering, and counseling-related occupations.

102

america’s dynamic workforce

The grouping of occupations into the six educational clusters . . . provides a natural hierarchical

sorting of occupations based on the training and

skil requirements found within each cluster.
chapter eight

103

Table 8.3 Employment in High-Wage, High-Growth Occupations, 2002 and 2012, Projected
104

america’s dynamic workforce

Table 8.3 Employment in High-Wage, High-Growth Occupations, 2002 and 2012, Projected
chapter eight

105

Table 8.3 Employment in High-Wage, High-Growth Occupations, 2002 and 2012, Projected
106

The Skilled Trades

Throughout history, we have turned to the

men and women of the skilled trades to keep

America’s foundation strong. Skilled trades

workers have built homes for our families and

the roads and factories that keep our economy moving forward. While the tools and

technology used for these trades have

changed – with nail guns now accompanying

hammers and laser guides accompanying

plumb lines – the important role played by

the skilled trades has not.

As America grows, we need a new generation

of skilled trades workers. By the year 2012,

there is projected to be 8.4 million people in

construction and extraction occupations. In

addition to the projected 1.1 million new jobs

to be created, opportunities will exist to

replace experienced construction workers as

they leave their jobs. Some firms in the construction industry are today reporting shortages of skilled labor. In order to keep

America strong, we must not discourage

young people from entering the skilled trades.

The skilled trades offer opportunities across a

broad set of occupations. Most of the workers

in construction occupations are skilled

craftsworkers or laborers, helpers, and apprentices who assist the more skilled workers.

Construction workers generally are classified

as one of the following: structural, finishing,

or mechanical workers. 

Skilled trades and crafts jobs are heavily concentrated in the construction industry. While

these workers may be employed in any indusamerica’s dynamic workforce
try, half of construction industry employment

is comprised of these skilled trades and crafts

workers. Other industries in which they may

be employed include manufacturing, real

estate, and wholesale and

retail trade. In addition,

self-employment is very

common.

Labor force growth for the

2002-2012 period will be

affected by the aging of the

Baby Boom generation.

The aging workforce will

stimulate demand for new workers to sustain

growth in the skilled trades. The median age

of the labor force was 34.6 years in 1982; it is

expected to rise to 41.4 years in 2012,

exceeding the highest level ever recorded,

which was 40.5 years in 1962. 

Not only will the aging population generate

job openings due to retirements, but the aging

population will also increase demand for various construction activities. Construction of

nursing homes and convalescent homes will

multiply. And as the children of the Baby

Boomers become young adults, the demand

for manufactured housing, starter homes, and

rental apartments is expected to increase. 

Job opportunities are expected to be excellent

in the construction industry. Construction

employment is expected to increase by 15.1

percent (from 6.7 million to 7.7 million) during the 2002-2012 period. Demand for new

housing and an increase in road, bridge, and

tunnel construction will account for the bulk

of job growth in this supersector. Skilled

trades workers are likely to be in demand for

the foreseeable future.

Skilled trades occupations are a diverse group,

and the projected ten-year increase for each

specific occupation ranges from 1.7 to 43.1

percent. For instance, from 2002 to 2012

boilermakers are projected to grow by 1.7 percent, carpenters by 10.1

percent, insulation workers by 15.8 percent, electricians by 23.4 percent,

and hazardous materials

removal workers by 43.1

percent. Chart 8.6 shows

projected employment

changes for selected skilled trades occupations. Overall, construction and extraction

occupations are projected to increase by 1.1

million jobs during the 2002-2012 period.

Conclusion

The Department of Labor has committed itself

to preparing the workforce of today for

tomorrow’s economy. Health, education, and

computer-related fields will continue to serve

as the source of many good jobs for those

with at least some college education. Jobs in

maintenance, production, repair, and construction and installation will provide a good

source of jobs for high school graduates,

especially those who have received additional vocational training. In the dynamic U.S.

economy, the technological advances in production and the changing demand for goods

and services will determine what industries

will provide good jobs for U.S. workers. The

American workforce has met the challenges

of every new economic era and the next one

will be no exception.

chapter eight

107

Skilled trades

occupations are a

diverse group . . . 
108

References

Alpert, Andrew, and Jill Auyer, “Evaluating the BLS 1988-2000 employment projections,” Monthly Labor Review, October 2003, pp. 13-37.

Bureau of Labor Statistics, Career Guide to Industries, 2004-05 Edition, pg. 20.

Toosi, Mitra, “Labor Force Projections to 2012: The Graying of the U.S. Work Force,” Monthly Labor Review, Feb 2004.

america’s dynamic workforce
Introduction

As Secretary Elaine L. Chao noted at the 

2002 National Summit on Retirement Savings,

the retirement landscape has been transformed by an “earthquake of change.”i For

Americans born today, average life expectancy is 77 years — more than a decade longer

than the life expectancy for their grandparents’ generation. (See Chart 9.1.) Of particular note is the rise in life expectancy for those

over age 65. By 2000, the life expectancy of

someone at age 65 had risen to 83.ii An

aging and retiring workforce pose a number of demographic challenges.

The demographics are revealing.

Between today and the year 2050, the

U.S. population is expected to grow from

282 million today to 420 million. The

percentage of the U.S. population that will

be 65 and older will grow from 12 percent in 2000 to 21 percent in 2050. The

percentage of Americans 85 and older

will also increase substantially—from 1.5

percent of the population to 5 percent.iii 

Because it is rare for someone to work their

entire lifetime for a single employer, it is more

critical than ever to assure that workers can

take ownership over their pension and other

retirement savings accounts. Workers have

more control over their own retirement

accounts, through Individual Retirement

Accounts (IRAs) and 401(k) plans, and they are

less likely to expect a fixed pension from a single employer upon retirement.

Retirement security must be a national priority. Because we have the advantage of living

chapter nine

109

chapter nine

saving for our future
110

longer after retirement – often 15, 25, even 30

years in retirement – successful and active

retirement requires better planning. Today

individuals are bearing increasing responsibility for their retirement savings as employers

turn from the traditional defined benefit pension plan to 401(k) and other defined contribution plans. 

While some Americans still believe that Social

Security will pay for all or most of their retirement needs, a comfortable retirement requires

a combination of savings accounts, including

Social Security, retirement plan benefits, and

personal savings and investments. However,

Social Security is not expected to meet its

planned obligations after 2042. Often, retirees

wish to continue to spend at high levels,

requiring between 74 percent and 83 percent

of their pre-retirement income in order to maintain their standard of living. Studies indicate,

however, that only 56 percent of households

are adequately prepared for such a lifestyle.i

The landscape of retirement is also changing as

workers no longer view retirement as a complete end to work and a transition to leisure

but rather as a new phase of life. According

to the 2003 Retirement Study conducted by

Towers Perrin, almost four out of five workers

plan to continue working after reaching retirement age. More than half of these individuals

plan on working in order to stay involved and

active, while the remainder cite financial reasons for staying on the job.iv (See Chart 9.2.)

Similar results were reported by AARP in their

The AARP Working into Retirement Study

(2003).v A number of factors will influence

future retirees’ decisions to continue working.

The Social Security earnings test has been

america’s dynamic workforce

Expanding Ownership of Retirement Assets

T

he tax relief legislation signed into law

by the President provided almost $50

billion dollars of tax relief over the next

ten years to strengthen retirement security.

This landmark legislation raised the contribution limits for IRA and 401(k) accounts,

allowed for additional "catch up" contributions for workers aged 50 and over, and

speeded up the vesting process for employer

contributions to 401(k) accounts.

New Savings

Opportunities: The

President has proposed

to expand savings

opportunities through

the creation of

Retirement Savings

Accounts (RSAs) and

Lifetime Savings Accounts (LSAs). RSAs would

provide all Americans with an easy, tax-preferred way to prepare for retirement. LSAs

would give all Americans the opportunity to

save tax free to pay for job training, college

tuition, the down-payment on a first home, a

car to drive to work, or their retirement.

Ensuring Freedom of Choice: The President's

proposal would ensure that workers who

have participated in 401(k) plans for three

years are given the freedom to choose where

to invest their retirement savings. The

President has also proposed that choice be 

a feature of Social Security itself, allowing

individuals to voluntarily invest a portion 

of their Social Security taxes in personal

retirement accounts.
eliminated for those who retire at normal

retirement age, and the eligibility for full benefits is increasing to 67; people are living

longer; and they want to maintain their

employment-based health care coverage.

Today consensus is emerging among

Congress, the Executive Branch, and private

sector organizations on two major policy

goals — first, we need to educate American

workers on the importance of saving for a

secure retirement; and second, we need to

educate American employers about the

advantages of a workplace savings plan. 

Employment-Based Retirement Plans

Half of private full-time workers and 14 percent of private part-time workers participate in

employment–based retirement plans. Sixtyfour percent of private and public employees

worked for employers that sponsored a retirement plan in 1999. This represents 90 percent

of public workers but only 58 percent of private workers. Out of covered private sector

workers, 51 percent of full-time workers and

14 percent of part-time workers participated in

a retirement plan. 

A greater percentage of public-sector than private-sector workers participate in employmentbased retirement plans. In a similar breakdown of public sector worker coverage, 85

percent of full-time workers and 32 percent of

part-time workers participated in a retirement

plan. These coverage rates have not changed

substantially over the past 30 years. 

Many workers who do not have a workplace

retirement plan work for small employers,

who often do not sponsor a plan. In 2003, just

35 percent of workers at private establishments with fewer than 100 employees participated in a retirement plan, compared with 65

percent of workers at larger establishments.vi

A defined benefit plan – the traditional pension plan – promises a specified monthly benefit at retirement. The plan may state this

promised benefit as an exact dollar amount or

calculate the benefit through a formula that

considers such factors as salary and service

(for example, 1 percent of your average salary

for the last five years of employment for every

year of service with your employer). 

A defined contribution plan, on the other

hand, does not promise a specified benefit at

retirement. In these plans, employees and/or

the employer contribute to an employee’s

individual account in the plan, sometimes at 

a set rate, such as 5 percent of annual earnings. The contributions are invested, with

most participants making the investment decisions for their own accounts. The participants

will receive their account balance as their

retirement benefit. The value of the account

will fluctuate due to changes in the investments. Examples of defined contribution

plans include 401(k) plans, 403(b) plans,

chapter nine

111
112

employee stock ownership plans, and profitsharing plans. 

Defined contribution plans, such as 401(k)

plans and profit-sharing plans, have proliferated

over the past 20 years. They have more than

doubled in number from 1978 to 1999, from

315,000 to 683,000 plans. (See Chart 9.3.) At

the same time, the number of traditional defined benefit pension plans decreased by more

than 60 percent, from 128,000 to 50,000 plans.

Some companies offer both types of plans.

In terms of individuals covered by the plans,

the number of people covered by defined

contribution plans rose from 16 million in

1978 to 60 million in 1999. (See Chart 9.4.)

Over the same period the number of people

covered by defined benefit plans rose from 36

to 41 million.

The popularity of 401(k) plans has been largely

responsible for the shift from traditional defined

benefit pension plans to defined contribution

plans. Of 730,000 total retirement plans, 93

percent are defined contribution plans covering

69 percent of total active participants.vii 

The shift toward defined contribution plans

has major implications for retirement. Unlike

traditional defined benefit pension plans,

which employers solely fund and manage,

employees contribute to defined contribution

plans and generally direct where and how

their account balances are invested and allocated. Employees can also tap into their vested accounts before retirement, for example,

by taking a loan or leaving an employer. 

The popularity of self-directed defined contribution plans has brought with it a need for

america’s dynamic workforce
financial literacy to help employees understand the specifics of their plan, the importance of participating and contributing, and

how to choose appropriate investments and

diversify those investments. 

Individual Retirement Accounts

Two-fifths (42 percent) of the U.S. households

tracked by the Investment Company Institute

in 2001 own IRAs. (See Chart 9.5.) Further,

IRA assets are growing substantially. In 1999,

for the first time, EBRI found assets in IRAs

($2.47 trillion) exceeded those in defined contribution plans ($2.45 trillion) and defined

benefit plans ($2.21 trillion).viii

Most IRA growth, though, is not from new

contributions but from rollovers of employment-based plan distributions and investment

gains. Today IRAs are used primarily as a

vehicle to store retirement wealth that has

been accumulated elsewhere in the retirement

system, and not as a vehicle through which

current retirement savings occur.

Misperceptions about retirement and investments may be discouraging people from contributing more to IRAs. Common mistakes

include overestimating investment returns,

and consequently running out of funds in

retirement; underestimating the needed

income to preserve an active lifestyle; expecting too much from Social Security; depending

on an inheritance or a spouse’s pension; and

underestimating longevity.

Social Security

Social Security is the mainstay of most people’s retirement income. Nine in ten households aged 65 and older receive Social Security benefits.ix Thirty-eight percent of the

chapter nine

113
114

america’s dynamic workforce

Strenghtening America’s Retirement Future and Strengthening Social Security

Social Security was designed in 1935 for an America that was very different in many ways.

In order for Social Security to withstand the conditions of the 21st Century, retirees in 2035

must have a system that reflects the realities of the nation in which they live.

Fifty years ago, there were 16 workers paying into Social Security for every 1 collecting benefits from it.

Today, there are 3.3 workers paying into Social Security for every 1 collecting benefits. By the time

today’s young workers retire, there will be only 2 workers paying into Social Security for every 1 collecting benefits.

The current Social Security system is effectively a “pay as you go” system. The benefits of today’s

seniors are not paid from personally-owned Social Security accounts, but from the payroll taxes of

today’s workers. Under current Social Security law, even surplus payroll taxes paid by workers

are not saved in personal accounts, but finance the current operations of the federal government.

Because Social Security is a “pay as you go” system rather than a savings

system, a sharp drop in the worker-collector ratio must mean a sharp

increase in the tax burdens borne by workers.

President Bush favors allowing younger workers the opportunity to save a

portion of their payroll taxes in a personal account. These accounts would

enable the worker to build a nest egg for retirement, which could eventually

be passed on to the worker’s heirs. 

In May 2001, the President convened a bipartisan Commission to Strengthen

Social Security, co-chaired by the late Senator Daniel Patrick Moynihan and Richard Parsons. That

Commission was charged with making recommendations to make Social Security fiscally sustainable, subject to reform principles prescribed by the President. The President’s reform principles, in

addition to creating voluntary personal accounts, also include making no changes to the benefits of

those now in or near retirement, and opposing any increases in the Social Security payroll tax.

The President’s Social Security Commission issued a unanimous report of options to permanently

strengthen Social Security, while protecting the benefits of current and near-term retirees, and

establishing voluntary personal accounts for younger workers. With its report, the Commission

invited others to discuss and to expand upon their proposals. Many Members of Congress have

answered the call, and stepped forward with plans. Since the Commission report, six fully

detailed, comprehensive proposals have been introduced by Members of Congress.

Fixing Social Security will require choices, bipartisanship, and public education. The President wants

to work with Congress to produce a consensus on the best elements of the many proposals that have

been put forward. Working together, we can build a Social Security system that improves the lives of

Americans in the 21st Century, in the same way that the original Social Security system improved the

lives of 20th century Americans.
total income of retirees comes from Social Security. Social Security supplies 50 percent or

more of the income for two-thirds of households

aged 65 and older; it is the only source of income for 18 percent of beneficiary households. 

The eligibility age for unreduced Social

Security benefits is increasing from 65 to 67.

Over a period of 22 years, beginning in 2000,

the normal retirement age increases gradually

from age 65 to age 67 for people born in

1938 and after. For those born in 1960 and

after, normal retirement age is 67.

The later normal retirement age of 67 may

accelerate a reversal of the decline in the average age at retirement experienced up to the

1990s. Some workers may even choose to work

beyond normal retirement age because delayed

retirement increases Social Security benefits for

each year after normal retirement age, reaching

8 percent per year of delay in 2010. 

Earnings

People are increasingly transitioning to retirement through bridge jobs or phased retirement. A 1999 AARP survey confirmed that

most Baby Boomers (80 percent) plan to work

at least part time in retirement.iv

Continuing to work after retirement makes

sense in light of increasing lifespans. On average a child born in 1998 can expect to live to

almost 77. As mentioned above, a 65-year-old

female retiree in 1998 can expect to live until

84. With people living longer and retiring earlier, earnings could become a more significant

source of retirement income. Also, as the

workforce ages and there are fewer younger

people in the workforce, labor shortages may

encourage people to retire later.

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Another reason people transition to or delay

retirement is to maintain or pay for health care

coverage. Not only do retirees have to bridge

gaps between early retirement and the Medicare eligibility age of 65, but most want to supplement Medicare coverage. The percentage

of employers with retiree health benefits, once

a more common benefit, is declining. 

Helping Americans to Save

There is plenty of evidence of the need for

Americans to save – and, as noted above,

there is consensus among those leading efforts

to help Americans take on this important

responsibility for a secure future. The

Retirement Savings Education Campaign

implements a statutory mandate under the

Savings Are Vital to Everyone’s Retirement

(SAVER) Act of 1997. It advances the public’s

understanding of the importance of saving for

retirement, often working with many public

and private sector partners. 

Further, pursuant to this Act, Secretary Chao

convened the 2002 National Summit on

Retirement Savings. Under the theme

“Savings for Lifetime: Advancing

Generational Prosperity,” Secretary Chao welcomed the President, members of Congress,

and 200 other leaders in this field as they

spoke to the importance of understanding the

differences between generations – focusing on

their attitudes toward finances and saving for

retirement. The Summit produced a report,

recommendations, and action steps specific to

each generation of savers. 

Adding new and expanded incentives to motivate Americans to save, President Bush signed

into law the Economic Growth and Tax Relief

and Reconciliation Act of 2001 (EGTRRA) and
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the Jobs and Growth Tax Relief Reconciliation

Act of 2003 (JGTRRA). Both bills encouraged

saving by reducing taxes on income from capital, thereby increasing returns to savers.

EGTRRA is particularly important to many of

the Baby Boom generation approaching retirement with the addition of catch-up contributions to retirement savings plans for those over

50. In addition, EGTRRA encourages higher

salary deferrals by increasing the limits for

retirement plan contributions. It also encourages Americans to keep savings and not spend

them by facilitating rollovers opportunities

from retirement plan accounts into IRAs when

employees change jobs. 

The Department’s work to help small businesses consider the various retirement plan

options available was also expanded to work

with the Internal Revenue Service and highlight the new incentives added as part of

EGTRRA. By encouraging more small businesses to set up plans, more workers can be

covered by plans and save for the future. 

In May 2004, the U.S. Department of Labor

launched a new education campaign designed

to assist plan officials, especially small businesses, in meeting their fiduciary responsibilities. The campaign is part of a retirement plan

compliance assistance program that includes a

number of new publications, live outreach

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seminars conducted with the IRS and many

other partners including the Small Business

Administration, the U.S. Chamber of

Commerce, the Society for Human Resource

Management, the National Federation of

Independent Businesses, and the American

Institute of Certified Public Accountants. 

Wise Up is a Women’s Bureau e-mentoring

financial security and retirement savings

demonstration project that is accessible via

the web and at institutions in six regions. The

project is designed to teach Generation X

women ages 22 to 35 the basics of managing

money, saving, investing, using credit wisely,

buying insurance and retirement planning.

The curriculum is available online and in participating institutions. 

As part of its continuing e-gov educational

efforts, this campaign also features a dedicated web page. The Department continues to

expand its compliance assistance efforts to

assist retirement plan officials in operating

their plans and keeping the plans secure to

provide promised benefits to their workers.

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e-gov

Efforts to educate workers and employers

about the importance of saving for a secure

retirement include a number of e-gov initiatives. In 2003, EBSA worked with its partners,

the U.S. Chamber of Commerce and the Small

Business Administration, to update an interactive web site developed by the three organizations, selecta-retirementplan.org, for small

businesses. The site now draws more than

50,000 visitors per month. 

Four additional web sites provide information

to motivate employees and employers and

help them make wise decisions about retirement. One such site, www.dol.gov/ebsa, features publications and web-only information

to help all of the agency’s target audiences.

The interactive elaws Small Business

Retirement Savings Advisor (at www.dol.gov)

links small business owners with timely information and the requirements and benefits of

the various types of retirement plans. And the

Retirement Savings Education Campaign and

the National Summit on Retirement Savings

both have web sites with helpful and interesting information for workers and employers. 

The more ownership there is in America, the

more vitality there is in America, and the more

people have a vital stake in the future of this

country. -President George W. Bush, 

June 17, 2004

“

“
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Partnerships 

Partnerships are an important component of

the Retirement Savings Education Campaign’s

efforts to educate workers and employers

about retirement savings and retirement plans.

EBSA has multiplied its outreach by working

with many private- and public-sector partners.

From the IRS to the Consumer Federation of

America, these partnerships have resulted in

greater exposure for the retirement savings

message. 

As one example, the EBSA’s partnership with

the IRS has resulted in information on the tax

advantages of saving for retirement being

added to several publications for employers.

A partnership with the Consumer Federation

of America gives consumers at the grass-roots

level basic information and tools to increase

their savings rate. 

EBSA’s partnership with the Federal Citizen

Information Center (FCIC) has resulted in

increased exposure for the agency’s publications. Through the efforts of the FCIC,

Savings Fitness, Top 10 Ways to Prepare for

Retirement, and Women and Retirement

Savings have been promoted in the pages of

Parade magazine, through the syndicated column “Hints from Heloise,” and highlighted on

information accompanying federal income tax

refunds. 

The Retirement Savings Education Campaign

has worked with a wide range of partners to

draw from varied expertise and to reach a

wide range of the American public. These

partners, in addition to those noted above,

include the Small Business Administration, the

U.S. Chamber of Commerce, the Certified

Financial Planner Board of Standards, the

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Social Security Administration, the National

Association of Women Business Owners, and

many others. The Campaign continues to

expand its partnerships and looks forward to

working on future collaborative efforts. 

Reaching Non-English Speaking

Americans

During 2002, EBSA increased the number of

publications available to Spanish-speaking

populations. Pension and Health Care

Coverage...Questions and Answers for

Dislocated Workers, was translated and disseminated. The publication answers questions

about the Consolidated Omnibus Budget

Reconciliation Act of 1985 (COBRA) and other

health and retirement benefits after job loss. 

Changing Jobs, a poster offering regional

office assistance with retirement and health

questions, was also translated into Spanish

and distributed by EBSA’s 15 field offices.

This builds upon EBSA’s continuing efforts to

expand its retirement and health benefits educational materials available to non-English

speaking Americans. EBSA, working with a

translation service, can also assist callers

speaking over 140 languages. 

Las Mujeres y el Dinero (Women and

Money) is a series of financial education conferences held across the country. The

Women’s Bureau initiated these events with

partners from the Hispanic business community especially for Hispanic women who face

unique challenges when it comes to financial

security. The web site address is http://www.

dol.gov/wb/hisp.htm.

Conclusions

Retirement security has become a national

priority. Today, people are bearing more

responsibility for their retirement savings as

more employers turn from traditionally

defined benefit pension plans to 401(k) and

other defined contribution plans. 

The Department of Labor assists Americans as

they plan for an active retirement. Through

programs and partnerships, the Department of

Labor encourages Americans to take advantage of the tax-favored opportunities proposed

by President Bush and passed by Congress.

By preparing for retirement and taking advantage of tax benefits, Americans will be ready

for the future.

By preparing for retirement and taking advantage of

tax benefits, Americans will be ready for the future.
Notes

i U.S. Department of Labor (2002a). Saving for a Lifetime: Advancing Generational Prosperity: The 2002 National Summit of Retirement

Savings, U.S. Department of Labor, Washington, DC.

ii National Center on Health Statistics (2003). Health, United States, 2003, NCHS, Hyattsville, MD.

iii U.S. Census Bureau (2004). U.S. Interim Projections by Age, Sex, Race, and Hispanic Origin, http://www.census.gov/ipc/www/usinterimproj/, Internet Release Date: March 18, 2004.

iv HR Services, Towers Perrin (2003). Back to the Future: Redefining Retirement in the 21st Century: The 2003 Retirement Study, Towers

Perrin, New York, NY.

v The AARP Working into Retirement Study (2003).

vi U.S. Bureau of Labor Statistics, Employee Benefits in Private Industry, 2003, News Release USDL 03-489, September 17, 2003.

vii United States Department of Labor, Employee Benefits Security Administration, Abstract of 1999 Form 5500 Annual Reports: Private Pension

Plan Bulletin, Number 12, Summer 2004, Washington, DC.

viii U.S. Department of Labor (2002b). Delegate Resources: The 2002 National Summit of Retirement Savings, U.S. Department of Labor,

Washington, DC.

ix Social Security Administration (2003). Income of the Aged Chartbook, Social Security Administration, Washington, DC.

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References

HR Services, Towers Perrin (2003). Back to the Future: Redefining Retirement in the 21st Century: The 2003 Retirement Study, Towers Perrin,

New York, NY.

Kaiser Family Foundation and the Health Research and Education Trust (2003). Employer Health Benefits 2003 Annual Survey, Kaiser Family

Foundation, Menlo Park, CA.

Lin, Hongji & Ravi Sharma (2003). 1999 Health and Health Care of the Medicare Population: Data from the 1999 Medicare Current

Beneficiary Survey, Centers for Medicare and Medicaid, U.S. Department of Health and Human Services, Baltimore, MD.

National Center on Health Statistics (2003). Health, United States, 2003, NCHS, Hyattsville, MD.

Office of Policy and Research (2003). Coverage Status of Workers Under Employer Provided Health and Pension Plans, OPR, Employee

Benefits Security Administration, U.S. Department of Labor, Washington, DC. Unpublished.

U.S. Bureau of Labor Statistics, Employee Benefits in Private Industry, 2003, News Release USDL 03-489, September 17, 2003.

Social Security Administration (2003). Income of the Aged Chartbook, Social Security Administration, Washington, DC.

U.S. Census Bureau (2004). U.S. Interim Projections by Age, Sex, Race, and Hispanic Origin, http://www.census.gov/ipc/www/usinterimproj/,

Internet Release Date: March 18, 2004.

U.S. Department of Labor (2002a). Saving for a Lifetime: Advancing Generational Prosperity: The 2002 National Summit of Retirement

Savings, U.S. Department of Labor, Washington, DC.

U.S. Department of Labor (2002b). Delegate Resources: The 2002 National Summit of Retirement Savings, U.S. Department of Labor,

Washington, DC.

United States Department of Labor, Employee Benefits Security Administration, Abstract of 1999 Form 5500 Annual Reports: Private Pension

Plan Bulletin, Number 12, Summer 2004, Washington, DC.

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