Trends in Labor Underutilization Rates Among Adults (16 and Over) by Educational Attainment and Household Income, 1999–2000 to 2013–2014

In our prior analyses of the labor underutilization rates of the nation's working-age population, we tracked variations in these rates across educational attainment and household income groups in 2013–2014. In this section of our chapter, we compare key findings from the 2013–2014 surveys with those for 1999–2000, when the national economy was operating under full employment conditions in its labor markets (see Table 7.8).

In 1999–2000, the overall labor underutilization rate was 9.1 %, varying from a high of about 30 % among low-income dropouts to only under 3 % for bachelor's and higher degree holders with household incomes above $75,000.

By 2013–2014, the aggregate labor underutilization rate had increased to 14.9 %. Each demographic, educational attainment, and household income group of labor force participants encountered an increase in its labor underutilization rates, but the percentage point sizes of these increases varied quite widely across these groups (see Fig. 7.17). Low-income workers with a high school diploma or less in formal schooling saw their labor underutilization rates rise by 14–16 percentage points. At the lower end of the distribution of underutilization rates were bachelor's or higher degree recipients from upper-income families. Their underutilization rates rose by only to two to three percentage points over this 14-year period. Adults with a master's or higher degree and a family income greater than $75,000 faced a labor underutilization rate of only 4 % in 2013–2014, two percentage points higher than in 1999–2000.

America's adults clearly faced a deep set of widening gaps in their labor underutilization rates since 1999–2000. At the top of the distribution are low-income adults with only a high school diploma or less education with underutilization rates of 38–44 %—a Depression-era labor market environment. High school graduates

Table 7.8 Labor force underutilization rates of U.S. workers (16 and older) in selected educationalattainment and household income groups in 1999–2000 and 2013–2014 (in %)

Educational attainment/household income

(A)

1999–2000

(B) 2013–2014

(C) Percentage point

change

No diploma or GED, under $20,000

30.5

44.4

+13.9

H.S. diploma or GED, under $20,000

22.4

38.1

+15.7

H.S. diploma or GED, $20,000–$40,000

9.8

20.2

+10.4

13–15 Years, $40,000–$60,000

5.9

13.4

+7.5

Associate's degree, $60,000–$75,000

3.3

8.4

+5.0

Bachelor's degree, $75,000 and over

2.7

5.5

+2.8

Master's and higher degree, $75,000 and

over

2.1

4.1

+2.0

All

9.1

14.9

+5.8

Source: Monthly CPS household surveys, public use files, 1999–2000 and 2013–2014, tabulationsby authors

Fig. 7.17 Percentage point increases in labor underutilization rates among selected educational and household income groups of workers, 1999–2000 to 2013–2014

from low-middle-income families faced a 20 % labor underutilization rate, equivalent to several points above the worst during the Great Recession of 2007–2009. At the bottom of the distribution are college graduates (bachelor's and above) with affluent family incomes who live in a world characterized by super full employment. These are radically different labor market worlds.

 
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