The Labor Force 2026 - Can Shifting Demographics Meet Industry Workforce Needs
Although unemployment is down and an additional 10.5 million people are expected to be employed over the 2016 to 2026 decade, the diminishing rate of labor force growth due to an aging population and other changing demographics is projected to further slow the U.S. labor force participation rate. This is the first factoid in a series of six factoids detailing the projected demographic shifts in the workforce as reported by the Bureau of Labor Statistics in 2017 Q4.
Labor Force Methodology
“Labor force projections are based on expectations of the future size and composition of the population, as well as on the trends in labor force participation rates of different age, gender, race, and ethnic groups, a total of 136 categories. BLS converts population projections to the civilian noninstitutional population concept, a basis for labor force projections. BLS develops participation rate projections using data from the Current Population Survey (CPS) conducted for BLS by the Census Bureau” -Bureau of Labor Statistics (BLS)
How will the Labor Force look by 2026? And will there be enough workers to meet the specific needs of American industry? In 1996 all Baby Boomers were within the prime 25 to 54 age segment – roughly 72 percent of the total labor force. Thirty years later, projected in 2026, Baby Boomers will be 62 to 80 years of age and many will have exited the job market – leaving just 63.5 percent of the labor force between 25 to 54 years old. Between 2016 and 2026, the other significant change to the workforce will be among 35 to 44 year olds as the Millennials dominate this age group, growing from 20.6 percent of the workforce in 2016 to 22.2 percent by 2026. They will be the only age group under 65 to gain share of the workforce.
Industries are changing and growing alongside the population. The retail industry is adapting to a changing economic structure and many brick and mortar stores are forecasted to decline in employment over the 10-year period 2016 to 2026. Among these are traditional furniture stores, as well as electronic, department and clothing stores. Furniture Stores are expected to take a 10.2 percent negative hit in employment over the 10 years to 2026. Meanwhile the success of Home Furnishings Stores is expected to boost this channel’s employment 7.4 percent. In the same time period, Electronic Shopping and Mail-Order Houses are expected to gain 23.4 percent more employees. The next article in this series will focus on changes in the Labor Force by Sex.
Source: U.S. Department of Labor, Bureau of Labor Statistics *projected