Published Online: April 23, 1997

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Report Warns of Less Skilled Workforce After 2020

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The nation's future prosperity depends on reversing trends toward a shrinking, less skilled workforce after 2020, and public schools are not up to the task, a new report declares.

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The report from the Hudson Institute warns of an economic "train wreck" if the nation doesn't fend off the effects of an aging population.

"Put simply, when the baby boomers retire, beginning in about 2010, we're in big trouble, unless something changes," said Carol D'Amico, a co-author of the report and a senior fellow at the conservative Indianapolis-based think tank. "The boomers are a statistical anomaly, and the next generation is smaller in number and poorly prepared to replace them."

The report, "Workforce 2020," is a sequel to Hudson's 1987 "Workforce 2000." The earlier study, which highlighted the entry of members of minority groups into the workforce in growing proportions, became a runaway best seller in business circles.

The new report, released last week, points to two major challenges in the next decade and a half: the growing scarcity of workers prepared to make the most of accelerating technological change and the dearth of younger workers to replace retiring baby boomers.

Workers will find themselves in an environment full of danger and opportunity, where the premium on skills, flexibility, and foresight will be greater than ever, the authors say.

Those with a good education and skills "will join a global elite whose services will be in intense demand." Those without "will face declining real wages or unemployment, particularly in manufacturing," according to the report.

America's prosperity, in turn, will depend on the number of workers on each side of the divide.

To meet the challenges, the authors counsel a revised immigration policy that gives greater preference to skilled workers and more flexible work arrangements to encourage parents and older workers to stay on the job.

Emphasis on Schools

But even more crucial, the report argues, are good K-12 schools. Public schools must set high academic standards and dole out rewards and punishments related to meeting them.

The authors are critical of President Clinton's effort to make the first two years of college universal, arguing that early education is more cost-effective than adult education and that college too often fails to provide students with the skills they need in the workplace.

Many of the report's conclusions seem sound, said John H. Bishop, who heads the department of human resource studies at Cornell University in Ithaca, N.Y.

But he disagreed with the idea that postsecondary education should be de-emphasized. Mr. Bishop said it is a proven winner in the marketplace, where a year of college means an average of 5 percent to 10 percent higher earnings on the job.

"An investment in a 24- or 25-year-old will start paying off immediately," he said, "and could well be more cost-effective than something done earlier."


For More Information:

Copies of "Workforce 2020: Work and Workers in the 21st Century" are available for $20.95 each, prepaid by credit card, from the Hudson Institute, (800) HUDSON0.

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