Modernizing employment records: The public infrastructure the US labor market needs – Brookings

Report on Modernizing U.S. Employment Records to Advance Sustainable Development Goals

Executive Summary

The United States’ antiquated employment data infrastructure, rooted in policies from the Great Depression, fundamentally undermines progress toward key Sustainable Development Goals (SDGs), particularly SDG 8 (Decent Work and Economic Growth). This report analyzes the system’s deficiencies, examines international best practices, and proposes a modernization roadmap. By treating employment data as critical public infrastructure, the U.S. can enhance economic resilience, reduce inequality, and create effective pathways to quality education and decent work, aligning with the 2030 Agenda for Sustainable Development.

Systemic Failures and Their Impact on Sustainable Development

Hindering SDG 8: Decent Work and Economic Growth

The current U.S. system, a fragmented patchwork of state-level wage records, prevents the rapid identification of workers in need during economic disruptions. This inadequacy directly impedes the achievement of SDG 8 by failing to promote full, productive employment and decent work for all. During crises like the COVID-19 pandemic or trade shocks, policymakers lack the real-time data necessary to design and deploy targeted support, leaving millions vulnerable and slowing economic recovery.

Exacerbating Inequalities and Impeding SDG 10

The inability to track critical labor metrics such as occupation, hours worked, or job location means that support programs are often designed after the fact, frequently missing the most vulnerable populations. This systemic blindness exacerbates existing disparities, working against SDG 10 (Reduced Inequalities). Furthermore, without robust data, it is impossible to accurately measure job quality or track economic mobility, which are essential for creating inclusive economic policies.

Undermining SDG 4: Quality Education

The lack of clear data on employer demand and skills gaps forces training and education systems to operate on guesswork. This disconnect hinders progress on SDG 4 (Quality Education) by preventing the alignment of educational programs with labor market realities. Students invest in training without a clear understanding of employment outcomes, leading to inefficient allocation of resources and suboptimal career pathways.

International Models for Building Resilient Labor Infrastructure

Lessons from Global Innovators

Several countries have successfully modernized their employment record systems, offering a blueprint for building the resilient infrastructure essential to SDG 9 (Industry, Innovation, and Infrastructure). These international examples demonstrate that modernization is a matter of strategic design and coordination.

• Germany: Since the 1970s, Germany has linked wage, education, and training records to evaluate program effectiveness, directly supporting SDG 4 and SDG 8.
• Brazil: The digital labor card connects millions, including informal workers, to job matching and social aid, advancing SDG 1 (No Poverty) and SDG 8.
• India: The e-Shram registry has brought 300 million informal workers into the formal data ecosystem, a critical step for achieving SDG 10.
• Australia: By integrating reporting into payroll software, the system reduces administrative burdens on employers and improves compliance, fostering a better business environment under SDG 8.
• Estonia: A “report once, use many times” system streamlines data sharing across government agencies, exemplifying the efficient and accountable institutions called for in SDG 16 (Peace, Justice, and Strong Institutions).

A Roadmap for Modernization Aligned with Global Goals

Key Principles for Reform

The global experience provides a clear roadmap for transforming the U.S. system from fragmentation to function. The following principles are crucial for a modernization effort that supports the SDGs.

1. Set National Standards, Implement Locally: Establish central standards to ensure data consistency, a prerequisite for effective national policymaking under SDG 16, while allowing for regional flexibility.
2. Pilot and Iterate: Begin with small-scale pilot programs to manage complexity, build support, and refine the system before a national rollout, ensuring the development of resilient infrastructure (SDG 9).
3. Embed Privacy and Security by Design: Integrate robust data protection measures to build public trust and give individuals control over their information, a cornerstone of strong and accountable institutions (SDG 16).
4. Streamline Reporting through Technology: Embed reporting requirements into payroll software that businesses already use to reduce administrative burdens and improve data quality, contributing to economic efficiency under SDG 8.
5. Empower Workers with Data Access: Provide workers with secure access to their own verified employment histories. This empowers individuals in the labor market, enhances mobility, and builds trust, directly supporting the principles of decent work in SDG 8.

Conclusion: Building a Future-Ready Workforce

The Urgency of Action in an Era of Disruption

As artificial intelligence and automation reshape the global economy, a modern employment records system is no longer optional—it is essential public infrastructure. Such a system would enable workers to carry a verified, portable record of their skills and experience, enhancing their adaptability and resilience. For policymakers, it would allow for the rapid deployment of targeted aid, mitigating the social and economic costs of future shocks and advancing SDG 1 and SDG 10. For educators, it would provide the data needed to design programs that lead to better jobs and higher wages, fulfilling the promise of SDG 4. By embracing modernization, the United States can build a more fair, dynamic, and resilient economy capable of achieving the Sustainable Development Goals.

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 1: No Poverty
• SDG 4: Quality Education
• SDG 8: Decent Work and Economic Growth
• SDG 9: Industry, Innovation, and Infrastructure
• SDG 10: Reduced Inequalities
• SDG 16: Peace, Justice, and Strong Institutions

2. What specific targets under those SDGs can be identified based on the article’s content?

• SDG 8: Decent Work and Economic Growth

  • Target 8.5: Achieve full and productive employment and decent work for all. The article directly addresses this by highlighting the need for a system that can better match workers’ skills with employer demand, track job quality, and support workers during economic disruptions to maintain a “fair, dynamic economy.”
  • Target 8.6: Substantially reduce the proportion of youth not in employment, education or training. The article criticizes the current situation where “training programs prepared workers for disappearing jobs” and “students invest in programs without clear payoff.” A modernized data system would help align training with actual job market needs, thus improving employment outcomes for those in training.

• SDG 1: No Poverty

  • Target 1.3: Implement nationally appropriate social protection systems and measures for all. The article points out that when disruptions hit, the current data infrastructure is inadequate to “target help to workers… quickly or accurately,” often “missing the people who need support most.” It references Brazil’s system connecting workers to “social aid” as a model for a more effective social protection delivery mechanism.

• SDG 4: Quality Education

  • Target 4.4: Substantially increase the number of youth and adults who have relevant skills, including technical and vocational skills, for employment. The article states that with a better system, “Educators could design programs and credentials that lead to better jobs and higher wages.” This directly connects to ensuring that education and training provide skills that are in demand and lead to employment.

• SDG 9: Industry, Innovation, and Infrastructure

  • Target 9.1: Develop quality, reliable, sustainable and resilient infrastructure. The article repeatedly frames the employment records system as a form of public infrastructure, stating, “policymakers must treat employment records as the indispensable public infrastructure they are.” The entire argument is for modernizing this data infrastructure to make it more resilient and reliable.

• SDG 10: Reduced Inequalities

  • Target 10.4: Adopt policies, especially fiscal, wage and social protection policies, and progressively achieve greater equality. By enabling policymakers to “target aid in weeks instead of months” during crises, a modernized system would ensure that support reaches vulnerable populations more effectively, mitigating the unequal impacts of economic shocks. The inclusion of informal workers, as seen in the examples of India and Brazil, is a key aspect of reducing inequality.

• SDG 16: Peace, Justice, and Strong Institutions

  • Target 16.6: Develop effective, accountable and transparent institutions at all levels. The article critiques the U.S. system as a “patchwork of state-level wage records” and an example of “bureaucratic inertia.” It advocates for a “report once, use many times” model to streamline compliance and create a more efficient, coordinated, and effective institutional framework for managing labor data.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• Speed and accuracy of aid delivery: The article implies this indicator by stating a modernized system would allow policymakers to “target aid in weeks instead of months.” This measures the effectiveness of social protection systems (Target 1.3).
• Alignment of training programs with labor market demand: The article notes that currently, “Training systems guess at employer demand.” A successful system would allow for the measurement of how well educational and vocational programs match the “skills in demand,” which is a key indicator for Target 4.4.
• Ability to track labor market dynamics: The article laments that policymakers “cannot measure job quality, track mobility, or identify skills in demand.” The existence of data on these factors would serve as a direct indicator of progress towards a more informed labor policy (Target 8.5).
• Registration of informal workers: The article cites India’s e-Shram registry bringing “300 million informal workers into view” and Brazil’s system connecting informal workers to aid. The number or proportion of informal workers included in formal data and social protection systems is a clear indicator for Targets 1.3 and 10.4.
• Reduction of administrative burden: The proposed “report once, use many times” model aims to reduce the burden on employers. A potential indicator would be the reduction in time and cost for businesses to comply with data reporting requirements for various government agencies (Target 16.6).

4. Table of SDGs, Targets, and Indicators

Source: brookings.edu