July 14, 1995
"Tower to Workforce: No Sweat, You're Holding Steady"
San Jose Mercury News
By Timothy Taylor
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THE PERCEPTION that jobs have become more short-term and insecure in the tumultuous economy of the 1990s has become so entrenched and widespread that it comes as something of a shock to discover that many recent economic studies find no evidence to support it.

For example, here's Henry Farber of Princeton University: "No systematic change has occurred in various measures of overall job duration over the last two decades."

Or Francis Diebold, David Neumark and Daniel Polsky of the University of Pennsylvania, Michigan State, and again U Penn, respectively: "Taken as a whole, the evidence to date certainly does not point toward a secular decline in job stability."

Or the respected Employee Benefit Research Institute in Washington: "Available data do not support the widely held perception that the U.S. workforce is becoming increasingly mobile."

Or President Clinton's Council of Economic Advisers, in its annual report last year: ''No strong trend toward increasing overall instability can be found.... If there has been an increase it is either too recent or too subtle to be reflected in the aggregate job tenure statistics.''

Since disagreement among economic studies is as inevitable as the sun rising in the east, it comes as no surprise that other studies have found opposing results.

For example, Kenneth Swinnerton and Howard Wial of the U.S. Department of Labor write: "Compared to earlier periods, fewer of the workers with less than eight years of tenure will join the more senior individuals who have already made it. If the pattern of the late 1980s persists, workers who have stable, long-term jobs will make up an increasingly exclusive club."

Or Stephen Rose of the National Commission for Employment Policy (an advisory group appointed by the president): "Job instability for men rose in the 1980s. . . . Many more workers are having trouble maintaining a steady career path in which wages rise with experience and seniority."

Two interrelated puzzles arise here. Why do the studies disagree with each other? If job security hasn't diminished, as some of these studies claim, then why do so many people feel as if it has? Here are five factors to keep in mind while disentangling these questions.

1. The curse of career counselors. I meet a lot of college students who have been through lengthy diagnostic tests and counseling about their career goals. They sometimes feel panicky about their futures. But if you're expecting to find a lifetime niche in the workplace right out of school, you're almost certain to be disappointed.
   
   Young workers have always had unstable job histories. Currently, the average individual holds 7.5 jobs before the age of 30. "One might think that by age 30," reports the U.S. Department of Labor, "a typical individual should have settled into a job and completed the transition from school to work. However, past research indicates that at age 30, a substantial percent of workers has been at their current job for a very short time."
   
   
2. Nostalgia for stability that never was. After many fits and starts, a sizable proportion of the U.S. workforce does eventually settle into a long-term job. But the proportion has long been smaller than many people think.
   
   Back in 1973, for example, in the 45-54 age group, 21 percent of workers had been in their present job more than 20 years, according to Farber's calculations. In 1983, 20 percent of the workers in that age group had 20 years on the job; by 1993, it was back to 21 percent.
   
   Those figures are taken from three points in time. One classic study of overall lifetime employment patterns, published in 1982 by Robert Hall of Stanford University, found: "Among workers aged 30 and above, about 40 percent are currently working in jobs which eventually will last twenty years or more."
   
   Overall, perhaps up to half of U.S. workers have historically had 20 years at a single job at some point in their life.
   
   
3. Closing the gender gap. When people talk about how jobs have become more short-term and insecure, they are not talking about the recent experience of women. As recently as 1970, 80 percent of men were in the labor force, but only about 43 percent of women. Today, about 75 percent of men are in the labor force - along with 60 percent of women. As Farber, of Princeton, describes it: "Long-term jobs used to be almost exclusively the province of men. The largest secular change in the data is the dramatically increased probability of long-term employment for women." His figures show that in 1973, just 5 percent of women had tenure of more than 20 years in their current job. By 1993, the figure had almost doubled to 9 percent.
   
   
4. Opening the education gap. The economic benefits of being well-educated soared in the 1980s; so did the economic penalties for lacking education. All studies I've seen, including those that find no overall change in job stability, show that the labor market prospects for men with low levels of education - a group that includes a disproportionate share of black men - are grim. Their incomes are falling; their job stability is declining.
   
   
5. The bump in job tenure. For men, the median time on the job stayed fairly constant through the 1960s, jumped during the 1970s, and then partially reversed itself during the 1980s. As an example, consider male workers in the 45-54 age bracket. According to the Employee Benefit Research Institute, the median time on the job for men in this age group was 11.4 years in 1963, 11.5 years in 1973, 13.4 years in 1983, and then back to 12.2 years by 1981. A similar pattern holds for men in other age groups.
   
   Thus, studies that focus on the 1980s sometimes find less job stability, while studies that use the 1960s and 1970s for comparison do not find such a decrease.

To sum up: Studies that focus on the last decade and on the experience of men, especially men with lower levels of education, sometimes find a decrease in job stability. But when the focus broadens to all workers and to a deeper historical picture, job stability does not seem to have changed.

The fear that job insecurity has shot up is probably born of misinformation and nostalgia about how common lifetime jobs have been in the U.S. economy.

Lifetime jobs are important to people partly because changing jobs is so stressful. In addition, becoming well-established at a job is clearly linked to receiving benefits like medical insurance in the short run, higher pay over time, and a healthy pension.

However, perhaps half of American workers in the past never had a long-term job connection; if job stability stays constant, half will not have such a connection in the future. For those with low education, the chance of a secure long-term job was always lower, and now it is falling.

Even though overall job stability doesn't seem to be changing, it's time to rethink how our society distributes the benefits that have traditionally come with attachment to a single employer. Those who work for a series of employers are just as deserving of health insurance or continued job training or a decent pension as those who work for a single employer.

But it will take some path-breaking leadership to make such benefits portable, attached to the person rather than to the job.

U.S. public policy often seems trapped in a mindset that employers should be the vehicle for bringing benefits to people: Thus, we talk about requiring employers to provide health insurance, day care, job training, advance notice of layoffs, a minimum wage, a decent retirement plan, and more.

The problems with the employer-based approach are now obvious. It doesn't work well for those who don't establish a long-term relationship to the workforce. When business is required to provide benefits to every long-term worker, it discourages hiring such workers. Finally, when a business spends time playing benefits manager, it isn't focusing on innovation and productivity growth.

Rather than worrying about whether everyone will have a lifetime job - which they haven't in the past and won't in the future - we should seek to make the benefits that have traditionally come from job stability more available to everyone.

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