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See also: “Making a Commitment to America’s Workers: An Overview of CAP’s Blueprint for the 21st Century”

The United States faces a widening chasm in outlook and opportunity. While the wealthiest Americans have captured the lion’s share of returns in the economy, college-educated Americans have largely continued to prosper under many of the economic forces and policies that have reshaped the 21st century economy. But for millions of American workers—and particularly those without a four-year college degree—these powerful forces have exerted downward pressure on employment and wage growth, job quality, and opportunity in their communities. To make matters even worse, this decline in opportunity has been further exacerbated by long-standing inequities in our country. The effects have been particularly pronounced in certain regions.

We can see our nation’s widening chasm when we compare the stark contrast between the overall condition of the American economy and our current political climate. By several traditional measures, the U.S. economy is doing well. Since the lowest depths of the Great Recession in 2009, the national unemployment rate has declined from double digits to below 4 percent; real GDP growth has been positive in nearly every quarter; and corporate profits have grown robustly. If measures such as these adequately reflected the economic situation of individuals and households, we would expect that people would feel economically secure and reasonably confident about their economic prospects.

But the undeniable reality is that too many Americans feel deeply insecure about their prospects and future. Moreover, upward mobility feels and is increasingly out of reach for workers who have not gone to college. Together, these forces are having economic, social, and political impacts. The plan we set out here is aimed at countering those forces by making good work with decent pay available for all Americans.

And if we look beyond the headline unemployment rate, the American economy is, in fact, still far from achieving full employment among adults in their prime working years. While the headline unemployment rate does capture meaningful progress since the depths of the Great Recession, targeting a low headline unemployment rate is not sufficiently ambitious if we want to address the true labor market challenges we face. To offer one indicator of why: If the labor force participation rate for 16- to 65-year-olds, which is now 72.9 percent, were to return to its 2000 peak level of 76.5 percent, there would be an additional 7.6 million workers in the labor force—which would raise the unemployment rate of those aged 16 to 65 from 4.2 percent to 8.7 percent.

The pain from this jobs shortfall is disproportionately concentrated among Americans without four-year college degrees. Many have left the labor market with no good prospects for decent employment, are underemployed, or are struggling to piece together work to barely make ends meet. And of those workers, it is even worse for women, people of color, and certain other demographic groups. Certain pockets of the country—including rural America, hard-hit manufacturing communities, and areas with long-standing and concentrated poverty—have been hit particularly hard. The impact can be felt in sluggish wage growth that leaves many who are employed still feeling like they are falling behind.

A range of forces lies behind the economic struggles of working Americans. The real wages of workers without a four-year degree, which have been essentially stagnant for decades, have yet to fully recover from declines the Great Recession produced. In addition, the increase in women’s labor force participation—which helped many families to overcome years of anemic income growth—has stalled, due in large part to the failure of public policy to ease caregiving responsibilities, which, today, disproportionately fall upon women. Moreover, in recent decades, good jobs have become increasingly scarce, especially in certain industries and geographic regions. These developments, in turn, have caused entire communities to fall further behind the rest of the country. Certain groups, including people of color and those with disabilities, have been hit even harder by these trends.

The pain being felt by the American people reflects deep, long-brewing market and policy failures. And neither the free market nor tax cuts for the wealthy and large corporations have—nor will—address their hardship.

But it does not have to be this way. America can seize this opportunity to chart a new path forward. We can confront and overcome the economic challenges facing America’s workers, but only through substantial, sweeping changes to the nation’s economic policies. It is time for a bold new set of initiatives to create good jobs—ones that will provide much-needed employment opportunities for American workers, address many of our society’s pressing needs, and provide a bedrock for thriving communities.

“Blueprint for the 21st Century: A Plan for Better Jobs and Stronger Communities” is designed to raise working-class wages and employment. It will create 4 million jobs through an approach that both addresses some of our most pressing national needs and focuses particular assistance on communities that have been left particularly far behind. It will deliver higher wages by tightening labor markets and taking steps that change the rules of the game to strengthen worker bargaining power.

These jobs will be created primarily by making a series of major investments to address some of America’s most pressing 21st century challenges. As part of the Jobs Blueprint, the Center for American Progress proposes five major initiatives that will provide high quality, affordable child care; rebuild America’s infrastructure; modernize K-12 schools; prepare America’s communities and housing stock for the effects of climate change; and provide critical supports to senior citizens and persons with disabilities. We propose investing in America’s physical capital and human capital for the 21st century—investments that the market will not make by itself. Together, these nationwide investments will create more than 3 million new jobs.

Furthermore, in the most economically distressed areas of the country, CAP proposes a job guarantee that, we estimate, about 1.2 million persons will take up. Approximately one-quarter of the jobs needed to meet that estimated adoption rate will already be created by the major investment initiatives of the Jobs Blueprint. Additionally, about three-quarters of these jobs, or 900,000, will be new jobs specifically created to facilitate the implementation of the guarantee. This proposal builds upon the ongoing policy conversation around a job guarantee as a measure to achieve full employment, spurred by scholars and advocates who have brought the idea to the forefront of the conversation.¹

Under our 21st century Jobs Blueprint, the major national investment initiatives, together with a targeted job guarantee, will create enough jobs to move the economy substantially toward full employment. By tightening labor markets, these new jobs will raise wages, even as they help our country meet pressing national needs. Critically, their combined scope will have a major effect on both the highly distressed communities specifically targeted in the job guarantee but also on other communities that, although they are not selected under the particular distressed-community index utilized in this plan, nonetheless may be facing significant economic challenges.

The Jobs Blueprint stands up a new paid training initiative to help workers prepare to fill jobs that will be created under the plan. To address a decline in the bargaining power of workers over several decades, it proposes fundamental changes to the rules governing the labor market, including policies to encourage industry-wide bargaining; wage boards to set pay and benefit standards; and expanded bargaining rights for all workers. These changes can benefit not only workers in the jobs created by this plan but also all American workers. Finally, the plan proposes to raise the minimum wage to $15 per hour by 2024 as a means to ensure that lower-wage workers can earn a reasonable income. This new higher wage floor applies to every job created under this plan and beyond it.

The goal of the Blueprint for the 21st Century is basic yet powerful: Address the serious economic challenge facing working-class Americans of all races and backgrounds by providing them with higher wages and the opportunity to work in jobs that also address many of the country’s most pressing needs.

These challenges have been years in the making, and the solutions proposed will take time to implement. As described below, the proposals in this Jobs Blueprint are meant to be supplemented by protecting and strengthening automatic stabilizers that help respond to economic downturn and the use of other monetary, fiscal, and policy tools that are meant to address cyclical economic changes. Beyond this plan, in upcoming reports CAP will be offering additional proposals that are central to a progressive economic agenda. Yet, critically, the Blueprint signals a major new commitment on the part of America as a united and democratic society: guaranteeing a fair day’s pay and a good job for people in communities who are struggling and striving. Every person who can work and wants to work should have the chance to do so—and this Jobs Blueprint creates a template for meeting that promise.

Trends in employment and wages

While there have been marked improvements since the economy began to recover from the financial crisis and Great Recession, the recovery has been insufficient to overcome declines in the employment rate and the wage rate of working-class Americans that began in the year 2000.² (For analytic purposes, this report loosely defines working-class Americans as individuals in the labor force with less than a four-year college degree.) As shown in Figure 1 below, the employment rate for all prime-age workers (those ages 25 to 54) remains 3.4 percentage points below the level that it reached in the year 2000; the employment rate for the prime-age working class remains 5 percentage points below the peak it reached that same year.

As shown in Figure 2, certain demographic groups fared disproportionately worse in the labor market. Among workers without a four-year college degree, black men have seen the greatest drop in prime-age employment from 2000, with their prime-age employment rate falling 7.6 percentage points to 69.3 percent.³ Prime-age white men still enjoy a relatively high employment rate among those without college degrees but have seen a 6 percentage point drop since 2000. Female employment for those without college degrees has fallen as well, with white women and black women’s employment rate dropping since 2000 by more than 5 percentage points to 68.9 percent and 67.4 percent, respectively.

While workers without college degrees have seen the largest employment challenges in the 21st century, some groups of college-educated workers have similarly seen their employment rates decline. For example, college-educated black and Asian American and Pacific Islander (AAPI) female prime-age employment rates have dropped by 4.9 percentage points and 5 percentage points, respectively, since 2000. Employment rates of prime-age college-educated Hispanic men have fallen by 4.2 percentage points.

The real compensation of the working class, which has been nearly stagnant from 1979 to 2016, remains below levels previously achieved.⁴ Between 1979 and 2000, median compensation for those with at least a four-year degree increased 31 percent in real terms, while median compensation for all other workers only increased 4 percent.⁵ Moreover, the median compensation of workers without a four-year degree grew just 3 percent in real terms from 2000 to 2016. In contrast, weekly compensation of workers with at least a bachelor’s degree has risen by just more than 7 percent in real terms over the same time period.

The story is similar when examining wage growth of prime-age workers since 2000. It is clear that workers in their prime working years without four-year college degrees have fared worse overall. And 2017 data show that college-educated workers tend to earn higher weekly wages on average than those without four-year college degrees, as shown in Figure 4. But not all college-educated workers have seen their wages grow in recent years. Among black workers, even college graduates are experiencing sluggish wage growth, with the typical prime-age college-educated black man seeing just a 1.5 percent increase in his weekly wage earnings and the typical prime-age college-educated black woman seeing declining pay since 2000.⁶ And while the median prime-age member of the working class has seen just stagnant real weekly wages, working class black men and women, white men, and AAPI men and women in their prime have actually seen their median weekly earnings decline since 2000.

It is also important to note, as shown in Figure 3, that inequality is also growing among those with at least a four-year degree. Those with the highest levels of education are pulling further away from those with just a bachelor’s degree.

The combination of wage stagnation and employment decline has resulted in declining household incomes for working-class families. Median real incomes for households with children headed by a worker without a four-year degree have declined since 2000. It is unsurprising, then, that more than 30 percent of working-class Americans indicate they are “extremely” or “very” worried about their financial situation. ¹² This is twice the rate for college-educated Americans, and it only grows larger for communities of color. In fact, a January 2018 poll conducted by GBA Strategies and commissioned by CAP revealed that nearly half (48 percent) of voters report a serious problem with “finding a decent job with good wages.”¹³