ABSTRACT
The functioning of America’s labor markets and the allocation of incomes to workers as a class of income receivers has become fundamentally changed since the 1940s. Each of the decades between the 1940s and the 1990s was, in effect, a different setting within which the working population undertook to earn wages, salaries, and such quantitatively less important forms of payment for mental and physical effort as bonuses, fees, commissions, and tips. Economists who are concerned with explaining how workers have fared in a world of work that is constantly being transformed by a complex combination of technological, economic, social, and political forces have consequently reformulated and redirected their inquiries into the functioning of labor markets in order to keep pace. This book continues that practice. Its objective is to integrate new research to extend our understanding of the functioning of labor markets in the high-technology global setting that has emerged since the close of World War II. These changes have transformed the United States from an economy which in 1930 generated employment in goods-type occupations for more than 60 percent of its workers, a third of whom were employed in agriculture, to one which in 1990 employed 70 percent of its labor force in the production of services. In 1990 fewer than 30 percent of all workers were employed in goods production, and only 3 percent of those employment opportunities were in agriculture. The economy has, moreover, become transformed by a technological revolution and global competition with other industrialized economies. The concern of this chapter is an overview of these changes to establish the context within which contemporary labor markets operate, and how it has affected the changing focus of labor economics over time.
