The Contributions of Immigrants and Their Children to the American Workforce and Jobs of the Future

8/22/2019 The Contributions of Immigrants and Their Children to the American Workforce and Jobs of the Future

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The Contributions of Immigrantsand Their Children to the American

Workforce and Jobs of the FutureDowell Myers, Stephen Levy, and John Pitkin June 19, 2013

www.americanprogress.o


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The Contributions ofImmigrants and Their Childrento the American Workforceand Jobs of the Future

Dowell Myers, Stephen Levy, and John Pitkin June 19, 2013


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1 Introduction and summary

8 Section 1: Overview

11 Section 2: Size, make up, and change in the workforce

15 Section 3: Labor-force participation rates

19 Section 4: The coming wave of Baby Boomer retirementstheir characteristics

26 Section 5: The flow of replacement workers and theircharacteristics

29 Section 6: Net changes in the labor force

32 Section 7: Job growth, job openings, and occupationchangethe impact of Baby Boomer retirements

38 Section 8: Education and skill requirements of new andreplacement jobs

43 Section 9: Immigrants in todays workforce

46 Conclusion

49 Technical appendix

59 Appendix Table

63 About the authors and acknowledgements

64 Endnotes

Contents


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Introduction and summary

Our naion is in he middle o wo grea demographic shis. Te larges genera-

ion o Americanshe Baby Boomersis reaching reiremen age and will leave

he workorce en masse beween 2010 and 2030. Te reiremen o he Baby

Boom generaion will creae millions o replacemen job openings, even as eco-

nomic growh creaes he need or addiional workers o ll newly creaed jobs. A

he same ime, our naion is becoming more demographically diverse. Immigrans

and heir children make up a growing share o he populaion ha will be enering

heir prime working years over he nex wo decades.

Wih large numbers o jobs coming open in every secor o he economy and a all

skill levels rom now o 2030, immigrans and heir children will be criical o he con-

inued dynamism o he American workorce and economy. Tey will play a vial role

in reshaping he workorce, lling essenial jobs, and susaining economic growh.

Tis repor analyzes undamenal demographic and employmen rends ha are

changing our naions workorce and seem cerain o coninue long beyond he

ongoing recovery rom he recen deep recession.1 Te workorce and jobs o he

uure will be very dieren rom hose o oday.

Tis sudy presens projecions o he workorce ha are unprecedened in heir

deail abou he role o oreign-born immigranshe rs generaionand heir

naive-born childrenhe second generaion. Grounded in daa rom he Census

Bureau and he Bureau o Labor Saisics, or BLS, he uniquely deailed Pikin-

Myers generaional projecions o populaion2 are exended o esimae he role o

immigran generaions in he workorce.

Te sudy combines hese projecions o he size and characerisics o he work-orce wih independen esimaes o job openings o show he linkages beween

workorce changes and economic growh over he coming decade and beyond.

We begin by comparing he coming wave o Baby Boomer reiremens wih he

growh o he workorceha is, he sheer numbers o people leaving and ener-

Workforce: The work

comprises everyone in t

population ages 16 and

who is employed outsid

the armed orces, as we

those unemployed peo

who are actively seekin

The labor orce is anoth

term or workorce and

interchangeably.

Job openings: Job op

ings result rom growth

jobs and the need to re

workers who leave the

orce (through retireme

death, or other reasons

who change occupatio

Definitions

1 Center or American Progress |The Contributions o Immi grants and Th eir Chil dren to the American Workorce and Jobs o


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ing he workorce and available o ll jobs in he uure. We projec ha over he

nex wo decades, nearly 83 million people will ener he workorce. More han

wo-hirds o all new enrans o he workorce will be needed o replace odays

workers, who will reire and leave he workorce, wih he remaining enrans

accouning or he growh in he workorce.3

Baby Boomer retirements and the future workforce

People born beween 1946 and 1964, he so-called Baby Boomers, were by ar he

larges cohor in American hisory. Tis large generaion currenly comprises more

han 38 percen o he oal workorce. Tis year he rs o he Baby Boomers urns

67 years old, pas he hreshold o eligibiliy or ull Social Securiy benes. Even

while many are delaying reiremen o say in he workorce a laer ages, mos will

reire in he nex 20 years. Beween 2010 and 2030 some 45 million older workers

will reire, o which 40 million are members o his large generaion.

As hese reirees and ohers4 leave he workorce, new workers will be required o

replace hemjus o mainain curren oupus o goods and services. Beween

2010 and 2020, 27.3 million workers will leave he workorce, and beween 2020

and 2030 anoher 31.3 million will leave. In oal, hese 58.6 million o he 83 mil-

lion new workers projeced o ener he labor orce during he nex wo decades,

more han wo-hirds o all new workers, will be replacemens or older workers

leaving he workorce. (see Figure A)

0

10

20

30

40

50

60

20102020 20202030 Total

In millions

27.331.3

58.6

12.7 11.5

24.2

Workforce replacement

Workforce growth

82.8 Mtotal entrants

to the workforce

58.6 million

replacement worke

24.2 million

workforce growth

Figure A

Future workforce

Figure B

Total entrants to workforce, 2010 to 2

Source: Summary o authors calculations. Source: Summary o authors calculations.


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Beween 2010 and 2020 he workorce will grow by 12.7 million people, and

beween 2020 and 2030 i will grow by an addiional 11.5 million, or a oal o

24.2 million people. (see Figure A) In oal, over he nex wo decades, nearly 83

million people will ener he workorce. More han wo-hirds o hem will replace

people currenly in he workorce, and he res will accoun or he growh in he

workorce. (see Figure B)

Where will he close o 83 million new workers come rom? Tere are hree

sreams o new enrans o he workorce: 51.3 million grown children o

naive-born parens oday (hird-generaion or higher Americans); 18.6 million

immigrans (rs-generaion Americans); and 12.9 million grown children o

immigrans (second-generaion Americans). Hence, 31.5 million o he 83 million

new workers, or 38 percen, will be immigrans

and heir children. (see Figure C)

Alhough immigrans and heir children, the frstand second generations, will comprise 38 percen

o new workers, hey will be a much smaller share

o hose aging ou o he workorce. As a resul,

his group will accoun or he large majoriy o

he ne increase in he workorce and ll many

o he uure job openings ha will be creaed

as he Baby Boom generaion reires rom he

workorce. aken ogeher, immigrans and

heir children will accoun or 85 percen o ne

workorce growh over he nex wo decades. (see

Figure C) Beween 2010 and 2020 immigrans

and heir children will make up 72 percen o

ne workorce growh; beween 2020 and 2030

hey will make up 97 percennearly all o he

workorce growh.

Job openings in the future

Our projecions o he overall workorce ell one side o he sory o jobs in he

economy: he number and characerisics o people available o work in he

Unied Saes. How do hese compare wih expeced job openings?

20102020 20202030 Average

Share of new entrants to the workforce that are immigrants and their chi

Share of net workforce growth that are immigrants or second generation

35%

71.9%

40.8%

97.3%

38%

84

Source: Summary o authors calculations.

Figure C

Immigrants and their children (second generationthe future workforce


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I is reasonable o expec ha here will be abou 90 million job openings beween

2010 and 2030, roughly wo-hirds o which will be replacemen jobs and one-

hird o which will be new jobs. Tese jobs will be lled largely by he new workers

and by reducions in he ranks o he unemployed. Jus as immigrans and heir

children will play a criical role in he growh o he workorce, so oo will hey be

essenial o meeing he job needs o he uure in dieren occupaions.

Te replacemen jobs ha he Baby Boomers will leave behind and he new jobs

will be in all secors o he economy and a all skill levels. Some o he highes con-

cenraions o jobs will be ound in occupaions such as proessional and echnical

work (12.3 million by 2020), he service secor (12.6 million by 2020), and oce

and adminisraive suppor (7.4 million by 2020).

Oher proessions requiring workers wih various skill levels will also see grea needs

in he uure, including sales (6.5 million by 2020), insallaion and repairs (2 mil-

lion by 2020), and ransporaion and maerial moving (3.6 million by 2020).5

And while in he uure here will be more jobs ha require higher levels o educa-

ion, daa rom he Bureau o Labor Saisics indicae ha job growh will occur

or workers a all educaional and experience levels, rom hose wihou a high

school degree o docoral degree holders.

Te 25.6 million oreign-born workers in he U.S. workorce as o 2010 already

make up 16.6 percen o he oal workorce. Tese workers can be ound in every

major occupaional secor, including more han one in eigh workers in agri-

culure, consrucion, producion, service, proessional, and sales occupaions.6

Te widespread prevalence o he Baby Boomer workers across occupaions and

indusries suggess ha heir immigran and children replacemens will have even

more imporan roles in coming decades han oday.

Summary of findingsTis repor shows how cenral immigrans and heir children will be o meeing

he uure workorce and economic needs o he naion. Several specic ndingsare oered abou immigran conribuions o he uure workorce. Tese are

ollowed by some general conclusions relaed o curren policy debaes. Te ve

principal ndings o his sudy are he ollowing.


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Impact of Baby Boomer retirements

We projec ha 58.6 million workorce replacemens beween 2010 and 2030

will be required by he reiremen or deah o Baby Boomers and oher older

Americans. Tis is more han 80 percen greaer han he number o replacemens

required by he exi o he previous generaion beween 1990 and 2010. Te accel-eraing wave o reiremens by he Baby Boom generaion provides a key conex

or judging he economic imporance o immigrans and heir U.S.-born children.7

Most new workers will replace those exiting the workforce

Our projecions show ha ully wo-hirds (58.6 million) o all new workers will

replace people who will leave he workorce, while one-hird (24.2 million) will

represen growh.

Immigrants and their children are vital to replenishing the workforce

Wihou he immigran populaion, he naions workorce would no be sucien

o replace he number o workers expeced o reire rom he labor orce beween

2010 and 2030. Our projecions indicae ha 51.3 million workers who are naive

born and no o immigran parens are likely o ener he workorce in his period.

Ta number is 7.3 million people shor o he oal number o workers ha will

be leaving he workorce.

Labor-force growth will support economic growth

Jus o mainain curren producion o goods and services, large needs or replace-

men workers are projeced in he major occupaions where members o he

reiring generaion o Baby Boomers are currenly employed. In addiion, eco-

nomic growh is susained by more han jus replacemen o reiring workers. Our

projecions ha include immigrans and heir children indicae a oal increase in

he workorce o 24 million workers by 2030.


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Retirements will raise the need for new skilled workers

Te naion will need a growing number o experienced workers a all skill levels

due o he number o older workers ha are being replaced. Because he Baby

Boomers are more highly educaed han earlier generaions, replacemen needs

a higher skill levels will accelerae. Tis is a subsanial shi rom he siuaionbeore 2010, when a much larger share o older workers leaving he workorce had

less han a high school educaion.

Finally, we believe our empirical ndings carry some general implicaions or cur-

ren debaes over comprehensive immigraion reorm. Overall, our ndings show

ha exising immigran residens, heir children, and new arrivals are indispens-

able addiions o he naions workorce, making imporan conribuions ha

should be sudied and careully considered by policymakers.

Among he policy implicaions ha ollow rom our ndings are he ollowing.

Our projections could be curtailed by policy

Te srong growh in he workorce ha we projec could be reduced i insucien

numbers o new immigran admissions are permited. Our workorce projec-

ions are based on an exension o curren rends in delayed reiremens o older

workers and assume a rebound in new immigran arrivals rom curren low levels.

Should he fow o immigrans be resriced below our projeced levels, ha would

have he eec o making i more dicul o replace reiring workers, and i would

reduce he growh in he workorce or uure economic growh.

More efficient management of the immigration flow is needed

All levels o skills are likely o be needed in he uure, necessiaing a legal immi-

graion sysem ha is fexible and adjuss o he changing needs o he naions

workorce and economy. Our immigraion policies, or example, should aciliae

he process or inernaional sudens who we have rained in our colleges and uni-versiiesand who have acquired experise in skills needed by our economyo

receive legal residency so ha hey become par o he nex round o new immi-

grans joining he workorce.


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The legal and citizenship status of immigrants are workforce issues

Alhough our sudy has no addressed he legal saus o curren and uure

immigran workers, i is noed ha a subsanial minoriy o immigran workers

have unauhorized residence and ace limiaions on heir skill developmen and

working condiions. Tese workers uure conribuions o meeing he naionsworkorce needs will be aeced by wheher or no immigraion reorm changes

he legal saus o his populaion.

Beyond he imporan consideraion o how o reorm our immigraion laws, policy-

makers mus no neglec naive-born ciizens. Tey, similar o immigrans and heir

children, will also be lling many o he posiions now held by Baby Boomers. Skill

developmen or he enire workorce should be a prioriy. Te urgency o our needs

in his decade and he nex requires ha he generaional ransiion in he workorce

ha has already begun should no be le o happensance.


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8 Center or American Progress | Report Title

Section 1: Overview

Nearly 83 million new workers are projeced by his sudy o ener he labor orce

beween 2010 and 2030, lling new jobs creaed by economic growh and replac-

ing he large numbers o Baby Boomers who will be reiring. Te skills and abiliies

o hese workers will conribue o economic growh and help susain he naions

uure economic prosperiy. Immigrans now comprise some 16 percen o he

workorce, and i is widely recognized ha hey can help ll he jobs ha will be le

by reiring Baby Boomers and also be an imporan source o economic growh.8

Te presen sudy seeks o esimae jus how large a role immigrans and heir

children will play in meeing he naions uure workorce needs. I aims o pro-

vide a uller and much more deailed projecion o immigrans in he workorce

han has been previously atained. Te analysis is guided by he generaional

approach o demographic analysis or policy purposes, whose ouchsone is he

bookImmigrants and Boomers ha described generaional ransiion in America

rom 1970 o 2030 as he lie-cycle advancemen o aging Baby Boomers and he

incorporaion o newer immigran generaions. 9

The research object ives

In his repor, we seek o quaniy he basic conours o immigran conribuions

o a changing labor orce over he nex wo decades. While we recognize ha here

is a serious immediae unemploymen problem and a need or policies o address

i, his paper ocuses on jobs and workorce rends over he nex wo decades,

during which he curren high unemploymen rae is projeced o be reduced.10

Te long-erm rends meri consideraion in he debae abou immigraion reorm

now being considered by Congress. Specic quesions o be addressed include:

How much will he workorce grow beween 2010 and 2030?

How many workers will leave he workorce and need o be replaced?


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How many new workers are expeced o ener he workorce, eiher rom chil-

dren coming o age, rom increases in paricipaion eor by exising aduls, or

rom newly arrived immigrans?

Wha will be he characerisics o he new enrans compared o hose leaving

he workorce in erms o age, new immigrans, he children o immigrans, andoher naive-born workers?

Wha will be he immigran conribuion o workorce change?

How are occupaional needs growing and changing, boh in respec o oal job

growh and replacemen job openings and in respec o skill and experience

requiremens?

Meeting new information requirements

Te presen sudy brings o bear subsanial new inormaion no currenly

provided by he ederal daa sysem. Te greaes impedimen o a ull accoun-

ing o he role o immigrans and heir children in he uure workorce has been

he absence o populaion projecions ha disaggregae he U.S. populaion by

naiviy (oreign born versus naive born), which are essenial or creaing labor-

orce projecions. Census Bureau projecions o he populaion have provided

only limied inormaion abou he oreign-born populaion. Te laes projec-

ions rom December 2012, wih supplemens in May 2013, do no disinguish

immigran and naive-born componens o he populaion, nor are he children o

immigrans disinguished rom ohers who were U.S. born.11

Te absence o populaion projecions wih immigran deail has prevened he

Bureau o Labor Saisics rom incorporaing an explici immigran dimension

ino heir oherwise excellen sudies o labor-orce rends. As a resul, immigrans

are inermixed wih naive born in unknown proporions wihin each o he major

race-ehnic groupings o he workorce. Over ime immigrans may become a

larger or smaller porion o dieren groups, alering he rends in unmeasured

ways wih unknown implicaions or he uure. Inormaion on hese rends isclearly o be desired, especially a a ime when immigraion reorm and he role o

immigrans in meeing he naions workorce needs are on he naional agenda.

Beter accouning o uure labor-orce rends hereore requires, rs, a projec-


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ion o he immigran populaion likely o reside in he Unied Saes, including

no only he presen oreign-born populaion aged orward in ime bu also he

children o immigrans (he second generaion), and he anicipaed new arrivals.

Te later are more uncerain because hey are subjec o changes in immigraion

policy. Pas rends in new arrivals and exper opinion abou uure changes are he

bes guide o possible uure fows.

A second componen necessary or projecing immigran workers is he rae

o labor-orce paricipaion by people o oreign origin. Tis rae oen diers

rom he raes or hose who are naive born and o he same gender and race or

Hispanic origin. While hese daa are colleced in he Curren Populaion Survey,

or CPS, and he American Communiy Survey, or ACS, he daa dier beween

he wo daa sources, and hey are compiled in an inconsisen manner. Moreover,

changes in deniions and procedures over recen years make i dicul o

assemble he consisen ime series needed or rend projecions.

Te presen sudy makes use o populaion projecions prepared or he Unied

Saes by John Pikin and Dowell Myers in 2011 and revised in 2013 wih updaed

assumpions.12 Tese projecions break ou he populaion by oreign-born or

naive-born saus, as well as by saus as children o oreign-born mohers (second

generaion), or as hird-generaion or laer members o he populaion. o accom-

pany he more deailed caegories in his generaional populaion projecion, we

have prepared a corresponding se o labor-orce paricipaion raes abulaed and

averaged rom CPS monhly surveys and projeced orward o he uure by ol-

lowing recen BLS projecions. Deails are supplied in he echnical appendix.


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A shor overview o he workorce and is dynamics o change help lay he oun-

daion or wha ollows. Te workorce consiss o all he people who are eiher

currenly employed or looking or work. By convenion, his is limied o people

ages 16 and older, and we urher ollow he convenion o he Bureau o Labor

Saisics in resricing analysis o he civilian populaion no living in insiuional

quarers. Te iniial overview o he workorce oered here emphasizes is genera-

ional srucure, boh in erms o age and immigran origins. Subsequen secions

will hen delve ino he dynamics o change and explain how we are able o projeche changes described in his repor.

The structure of the workforce

An overall prole o he

workorce in 2010 is given

in Exhibi 1, showing he age

groups and he porion ha is

oreign born, he naive-born

children o immigran mohers

(second generaion), or he

naive-born grandchildren (or

higher generaions) o immi-

gran ancesors.

Tere are a leas 16 million

workers in each o he ve-year

age groups rom age 25 o age54. Te larges age groups in

2010 are ages 45 o 49 and ages

50 o 54, conaining workers

rom he hear o he Baby

exhiBit 1

2010 workforce by immigrant generation


Section 2: Size, make up, and

change in the workforce

0

5,000,000

10,000,000

15,000,000

20,000,000

Foreign born

Generation 2

Generation 3

80or16

19

202

4

2529

303

4

3539

4044

4549

505

4

5559

606

4

6569

707

4

7579

Source: 2010 Census; 2010 American Community Survey; 2010 Current Population Survey. For details, see Projections and estio the workorce in the technical appendix.


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Boom generaion. Te sharp drop-o in numbers a older ages refecs boh he

smaller cohor size o earlier generaions and also atriion due o reiremen or

deah a older ages.

Also shown in Exhibi 1 is he porion o he workorce supplied by immigrans

and heir children. Te U.S. workorce in 2010 conains 25.6 million oreign-bornworkers, who amoun o 16.6 percen o he oal. In addiion, here are 8.7 million

U.S.-born children o immigran mohers, or 5.7 percen o he oal workorce. Te

larges numbers ha are o immigran origin are visible in Exhibi 1 a ages 30 o

49, amouning o more han 3.2 million workers in each ve-year age group. Te

smaller number o oreign-born workers a ages 20 o 29 refecs boh he slowdown

o immigraion in he 2000s and he absence o hose workers in he cohor who will

immigrae aer age 30. Te U.S.-born children o immigrans are mos prominen

in he younger age groups, ypically some 20 o 30 years younger han heir parens

and accoun or a oal o more han 4 million workers age 20 o 34.

Overall, immigrans and heir children orm a large share o he workorce a cer-

ain ages. In he younges age group, he second generaion approaches 10 percen

o all workers, while a ages 30 o 44, he immigran generaion accouns or a

leas 20 percen o workers o ha age. As shown in more deailed analysis in laer

secions, immigrans and heir children conribue an increasing share o he ne

growh in he workorce over ime.

Basic metabolism of retirement and replacement

In he curren decade he workorce is projeced o grow by 12.7 million people,

or 8.3 percen, which is less han 1 percen per year and slow by hisorical san-

dards. In he nex decade beween 2020 and 2030, he workorce is projeced o

grow even more slowly, by 11.5 million people, or 6.9 percen. Bu beneah he

surace is much more dynamic change. In addiion o he overall growh is a sub-

sanial roaion o he composiion o he workorce. Some 27.3 million workers

are projeced o exi he workorce his decade, enering reiremen or leaving he

workorce due o disabiliy, deah, or oher reasons. Tey will be replaced by 40

million people who will ener he workorce a younger ages. Similarly, 31.3 mil-lion workers are projeced o leave he workorce during he decade beween 2020

and 2030. Tey will be replaced by 42.8 million new enrans. As shown in laer

secions o his repor, he same basic meabolism is a work in all decades, bu he

volume o exis and enries is rising over ime..


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I is he dierence beween hese exis and enries ha yields he ne growh in

workers, and he roaion o more han 67 million workers (he sum o exis and

enries) is involved in producing he ne growh o 12.7 million workers in he

nex decade. Likewise, he exi and enry o more han 74 million workers during

he decade rom 2020 o 2030 produces he projeced ne growh o 11.5 million

workers. A graphic depicion o hese movemens or he decade o 2010 o 2020is shown in Exhibi 2.

Te 2010 and 2020 workorces are displayed by age group. Over he decade

everyone grows 10 years older, so all workers shi 10 years o he righ. By he

end o he decade, reiremens and oher exis rom he workorce have depleed

he number o workers in older cohors compared o heir number in 2010, when

hey were en years younger. Ta loss o 27.3 million workers is colored red.

Conversely, new cohors have aged ino workorce years, and heir arrival is col-

ored green, represening he 40 million new workers. Tis patern o older workers

leaving he workorce o be replaced by younger enrans is imporan or bohworkorce and immigraion policy and will be discussed laer in his repor.


17/69


0

5,000,000

10,000,000

15,000,000

20,000,000

0

5,000,000

10,000,000

15,000,000

20,000,000

-10,000,000

-5,000,000

0

5,000,000

10,000,000

15,000,000

20,000,000

80 or older1619 2024 2529 3034 35 39 40 44 4549 5054 5559 6064 6569 7074 7579

2010 workforce

2020 workforce

Entrants

Exits

80orold

er

1619

202

4

2529

303

4

3539

4044

4549

505

4

5559

606

4

6569

707

4

7579

80orold

er

1619

202

4

2529

303

4

3539

4044

4549

505

4

5559

606

4

6569

707

4

7579

Entrants

Stayers

Exits

Age in 2020 Age in 2020

2010 to 2020 workforce entrants and exits2010 and 2020 workforce compared

2010 and 2020 workforce

exhiBit 2

Calculations of 2010 to 2020 entries and exits by age, based on the workforce in

2010 and 2020, total population

Source: 2010: See Projections and estimates o the workorce in the technical appendix. 2020: Pitkin-Myers workorce projections.


18/69


Section 3: Labor-force

participation rates

Te rae o paricipaing in he labor orce is measured as he proporion o individu-

als who eiher hold a job or are currenly looking or employmen. Tese raes o

labor-orce paricipaion, or LFPRs, are sysemaically dieren or groups dened

by gender, age, and race/ehniciy, and ogeher wih he size and composiion o he

populaion deermine he size o he workorce. Tey also vary beween immigrans

and naive-born members o he aoremenioned groups. o a much lesser degree,

LFPRs also dier beween second generaion and oher naive born.

In his secion, we describe he hisoric and projeced raes o paricipaion in he

labor orce.13 Te pas raes are derived rom he Curren Populaion Survey, or

CPS. Te projeced uure raes or ages 55 and older are rom oossi (2009) and

or younger ages are held consan a observed 2010 levels. We also have broken

ou separae immigran and naive-born componens wihin each age-sex-race

segmen. Te raes used in his analysis are hereore a once modied and more

deailed han hose used by he Bureau o Labor Saisics or heir projecions.

We hen apply hese more deailed LFPRs o he revised Pikin-Myers 2011 U.S.

generaional populaion projecions o projec he size and deailed demographic

characerisics o he workorce.

Age and gender differences in rates of labor-force participation

Te greaes sysemaic dierences in labor-orce paricipaion are by age, wih

rapid rises in he LFPR aer age 20, plaeauing by age 30, driing downward aer

age 50, wih rapid descen or hose older han age 60. Tis descen refecs exis

rom he workorce mos o which represen reiremen. Age dierences will be

displayed in every graph ha ollows.

Gender dierences are greaer or some race/ehnic groups han ohers. (see

Exhibi 3) Among Arican Americans here is only a small dierence beween men

and women because boh have very high paricipaion raes. In conras, Laino


19/69


men have he highes paricipaion raes o any race or ehniciy, while Hispanic

women have he lowes. As a resul, he larges gender gap in paricipaion raes is

ound among Hispanics. Te second-wides gender gap is ound among Asians and

Pacic Islanders, while he second smalles is among whie non-Hispanics.

0%

20%

40%

60%

80%

100%

0%

20%

40%

60%

80%

100%

0%

20%

40%

60%

80%

100%

0%

20%

40%

60%

80%

100%

80orold

er

1619

202

4

2529

303

4

3539

4044

4549

505

4

5559

606

4

6569

707

4

7579

80orold

e r

1619

202

4

2529

303

4

3539

4044

4549

505

4

5559

606

4

6569

707

4

7579

80orold

er

1619

202

4

2529

303

4

3539

4044

4549

505

4

5559

606

4

6569

707

4

7579

80orold

e r

1619

202

4

2529

303

4

3539

4044

4549

505

4

5559

606

4

6569

707

4

7579

Hispanic White

African-American Asian and Pacific Islander

Men Women

exhiBit 3

Labor-force participation rates in 2010 by age, gender, and race/ethnicity

Source: Current Population Survey. 2010.


20/69


Nativity differences in rates of labor-force participation

Te lower paricipaion raes ound among Hispanics and Asians may be due o

he larger share who are oreign born. We examine how much lower he LFPR is

or immigran women o he same ehniciy in Exhibi 4. Among boh Hispanics

and Asians, oreign born women in heir lae 20s and early 30s have paricipa-ion raes ha are nearly 20 percenage poins lower han he raes or naive born

women o he same origin and race. Tereaer he oreign born rae rises srongly

and closes he gap wih naive-born.

Tese dierences are greaer or women han men, bu hey indicae he diculy

o projecing uure labor-orce paricipaion or any group ha is shiing is rela-

ive mix o oreign and naive-born members. I he oreign-born populaion in a

paricular age segmen is growing, ha would end o depress labor-orce parici-

paion, and i he naive-born populaion is increasing relaive o he oreign born,

ha would raise paricipaion.

0%

20%

40%

60%

80%

100%

80orold

e r

1619

202

4

2529

303

4

3539

4044

4549

505

4

5559

606

4

6569

707

4

7579

0%

20%

40%

60%

80%

100%

80orold

er

1619

202

4

2529

303

4

3539

4044

4549

505

4

5559

606

4

6569

707

4

7579

Native-born Foreign-born

Hispanic women Asian women

exhiBit 4

Labor-force participation rates in 2010 by age and nativity, women only

Source: Current Population Survey. 2010.


21/69


Changes in he relaive shares o naive- and oreign-born populaions vary grealy

by age, as shown in Exhibi 5. Among boh Asian and Hispanic women, he

oreign-born share was higher a mos ages in 2010 han in 1990. Beween 2010

and 2030, however, he rend in he oreign-born share a younger ages is reversed,

alling by 10 percenage poins o 20 percenage poins. Ta means ha he

higher LFPR o naive-born women will ake on greaer weigh in deermining heoverall uure labor-orce paricipaion o Asian and Hispanic women.

Wihou explici disaggregaion by naiviy, i would be dicul o projec rends

in labor-orce paricipaion raes. Wha appear o be sluggish increases or an eh-

nic group in a period when he oreign-born share is rising could urn ino rapid

increases when he naive-born share rises in he nex period. O course, increases

in he number o immigrans sill lead o more workers. Te echnical problem

is ha wihou explici reamen o oreign-born and naive-born componens,

i would be dicul o explain or projec he number o workers or heir raes o

paricipaion. And wihou explanaion o pas rends in hese raes we can haveless condence in any projecion o uure workorce numbers.

0%

20%

40%

60%

80%

100%

80orold

er

1619

2024

2529

3034

3539

4044

4549

5054

5559

6064

6569

7074

7579

0%

20%

40%

60%

80%

100%

80orold

er

1619

2024

2529

3034

3539

4044

4549

5054

5559

6064

6569

7074

7579

Hispanic women Asian women

1990 2010 2030

exhiBit 5

Changing foreign-born share of population by age in 1990, 2010, and 2030

Source: 1990 Census; 2010 American Community Survey; Pitkin-Myers population projections.

We urn nex o he analysis o he coming wave o Baby Boomer reiremens.


22/69


Section 4: The coming wave of

Baby Boomer retirements and

their characteristics

Te normal workings o he labor marke enail he exi o older workers ino

reiremen and an inake, or enrance, o new workers a younger ages. Growh in

he labor orce requires ha he enries be greaer han he exis.

From he sandpoin o individual workers and heir opporuniies, however, i

is imporan o measure more han growh. Te oal employmen opporuniies

available o workers include he sum o wo acors: he growh in employmenposiions and he replacemen o he exiing workers. (Laer in his repor we add

a hird acor, namely he added job openings creaed when workers leave one job

or anoher bu remain in he workorce.) Wha should no be overlooked is ha,

ypically, he replacemen opporuniies are much greaer han he growh acor,

and he large size o he Baby Boom generaion will place even greaer sress on

replacemen needs as i passes ino reiremen years.

Magnitude of potential Baby Boomer retirements

Te Baby Boom generaion is made up o hose people who were ages 45 o 64

in 2010 and included 59.7 million workers a ha ime (including all who were

employed or looking or work),14 along wih an addiional 6.9 million workers

ages 65 and older. Over he nex 20 years, he Baby Boomers will advance o ages

65 o 84, and he bulk will have exied he workorce. Tis drawdown in num-

bers o his large generaion is expeced o be subsanially greaer han in earlier

periods. In 1990, or example, only 32.1 million workers were ages 45 o 64, and

anoher 3.8 million were ages 65 and older. Tus, he oal number o workers ages

45 o 64 in 2010 is 85.9 percen greaer han i was in 1990, suggesing ha hereplacemen need will be ha much greaer.

Te larger size o he Baby Boom populaion is magnied by is high rae o labor-

orce paricipaion lae in is career74 percen in 2010, compared o 69.6 percen


23/69


or he preceding generaion ha occupied he same age range in 1990. Tese addi-

ional workers consiue a larger pool o poenial reirees leaving he workorce. Ta

poenial oufow is diminished, however, by he growing rend o delayed reiremen,

as refeced in he relaively higher labor-orce paricipaion aer age 65 since 1990.

Te rend oward laer reiremen dampens he poenial impac o he BabyBoomers exis when hey reach reiremen age. As a measure o his, we can

esimae how many more exis would occur rom he workorce i he LFPR

remained consan a is 2010 level raher han coninue shiing o higher levels.

Tis is a hypoheical assumpion ha is couner o all evidence o prospecive

change, bu his illusraive calculaion provides a baseline agains which o mea-

sure he impac o he projeced changes. During he decade o 2010 o 2020, i

he consan LFPR assumpion were adoped insead, i would yield 31.4 million

exis insead o he projeced 27.3 million exis, a dierence o 4.1 million, or 15.2

percen more exis han acually projeced. During he decade o 2020 o 2030,

hypoheical exis would be 34.9 million insead o 31.3 million, a dierence o3.6 million, or 11.4 percen. Our projecions hereore anicipae 7.7 million ewer

exis, and hence ewer workorce replacemens needed, han would have been

expeced o occur were reiremens no being delayed.

Summarizing exits from the workforce

Esimaing oufows rom he workorce requires ha we race specic cohors

as hey grow older, apply he raes o labor-orce paricipaion ha are expeced

o perain a he end o each decade, and hen subrac he number o remaining

workers rom he number ha were presen a he beginning o he decade. We

have carried ou his procedure or each deailed segmen o he populaion, as

dened by age, gender, race, and naiviy. Te resuls are summarized in he able

o enries and exis presened in he appendix able.

Te number o exis rom he workorce has increased each decade since 1990.

During he 1990s, 18.8 million people le he workorce, ollowed by 23.4 million

who le in he 2000s. Tese numbers will grow ever larger in coming decades, as

he large Baby Boom cohors move ino reiremen years. In he decade rom 2010o 2020, even wih our assumpion o increasing delay in reiremen, a oal o

27.3 million workers are expeced o leave he workorce. Ta will be ollowed by

anoher 31.3 million exis in he decade rom 2020 o 2030. Tese exis are almos

all aer age 50 and occur among boh men and women.


24/69


Exis rom he workorce vary a good deal by naiviy and immigran generaion.

Immigrans make up only a small share o hose who are exiing he workorce,

8.3 percen in he mos recen decade, bu are slaed o rise o nearly wice ha

share15.9 percenin he decade beween 2020 and 2030. (see Exhibi 6) Te

reason or he rise is ha immigrans who arrived as young workers in he 1980s, a

larger number han in earlier decades, are expeced o be reaching heir reiremenyears some 40 years laer.

exhiBit 6

Exits by nativity and generation, 1990 to 2030

Native, generation 3 Native, generation 2 Foreign born Total

1990s 15,882,928 1,597,951 1,299,067 18,779,947

2000s 20,226,427 1,186,884 1,945,551 23,358,861

2010s 22,435,820 1,131,791 3,731,786 27,299,396

2020s 25,008,073 1,312,637 4,977,616 31,298,326

Percentage o total exits

1990s 84.6 8.5 6.9 100

2000s 86.6 5.1 8.3 100

2010s 82.2 4.1 13.7 100

2020s 79.9 4.2 15.9 100Source: Calculated rom Pitkin-Myers workorce projections.

Meanwhile, he second generaion, children o immigrans, will be alling as a

share o labor-orce exis. In he 1990s he las children o immigrans rom he

early 20h cenury were exiing he workorce. Wih he abrup cessaion o immi-

graion aer 1924, many ewer second-generaion individuals were born rom

1930 o 1980.

Exis rom he workorce also vary by race and ehniciy. Te vas majoriy o

reirees in he mos recen decade were non-Hispanic whies (82.6 percen), bu

ha share is expeced o decline moderaely in coming decades, alling o 70.5

percen in he 2020s. (see Exhibi 7) Te decline occurs because he share ha are

Hispanic reirees is expeced o rise by 7 percenage poins (and ha o Asians and

Pacic Islanders by 2.4 percenage poins) rom he mos recen decade. Te ranks

o hese wo groups were grealy bolsered by he arrival o young migrans in he

1980s and laer. Evenually hey oo will join he ranks o reirees.


25/69


exhiBit 7

Exits by race and ethnicity, 1990 to 2030

1990s 2000s 2010s 2020s

Hispanic 931,619 1,316,468 2,575,857 3,864,001

Non Hispanic White 14,818,449 19,321,590 20,086,117 22,070,800

Non Hispanic Black 2,602,926 1,968,857 3,294,927 3,586,070

Native American 83,949 178,162 237,441 257,953

Asian, Pacifc Islander 343,003 573,784 1,105,054 1,519,501

Total 18,779,947 23,358,861 27,299,396 31,298,326

Percentage o total exits

Hispanic 5 5.6 9.4 12.3

Non Hispanic White 78.9 82.7 73.6 70.5

Non Hispanic Black 13.9 8.4 12.1 11.5

Native American 0.4 0.8 0.9 0.8

Asian, Pacifc Islander 1.8 2.5 4 4.9

Total 100 100 100 100

Source: Calculated rom Pitkin-Myers workorce projections.

A tsunami of Baby Boomer retirements

Te inormaion on exis rom he labor orce can be used o describe and explain

he sunami o Baby Boomer reiremens ha is now occurring in he Unied

Saes. Tis long wave will be driven by demographics and modied by rends in

labor orce paricipaion. Te labor-orce paricipaion raes or workers ages 55

and older have been increasing and are expeced o increase urher in he nex

20 years, as increased longeviy and beter healh are allowing more workers o

coninue in he workorce in many occupaions.

Te char below shows he rend o rising labor-orce paricipaion raes or

older workers over ime. Increases in labor-orce paricipaion or older workers

occurred beween 2000 and 2010 and are projeced o coninue, as explained in

he previous secion.


26/69


Te labor-orce paricipaion

rae or workers ages 55 o 64

increased rom 59.3 percen

in 2000 o 65 percen in 2010

and is projeced o increase

o 69.1 percen in 2020 and72.6 percen in 2030. Te

comparable gures or workers

ages 65 o 74 are 19.2 percen

(2000); 25.9 percen (2010);

31.2 percen (2020); and 33.6

percen (2030), and rom 5.3

percen (2000) o 7.4 percen

(2010); 9.8 percen (2020);

and 12.5 percen (2030) or

workers ages 75 and older.

Despie his rend oward

working laer in lie, 27.3 mil-

lion workers are expeced o leave he workorce15 beween 2010 and 2020, and

anoher 31.3 million are projeced o exi beween 2020 and 2030.

Te reason is ha labor-orce paricipaion declines rapidly wih age. So even hough

residens ages 55 o 64 will work more in he uure, hey will paricipae a a much

lower rae han when hey were 10 years younger. As shown below, workers ages 45

o 54 in 2010 had an 81.3 percen paricipaion rae, bu 10 years laer in 2020, when

hey will be ages 55 o 64, heir paricipaion rae drops o 65 percen and o 25.9

percen by 2030, when hey will be in he 65-o-74 age group. Workers ages 55 o

64 in 2010 go rom a 69.1 percen paricipaion rae o 31.2 percen in 2020 and o

9.8 percen in 2030, and workers ages 65 o 74 go rom a paricipaion rae o 33.6

percen in 2010 o less han 3 percen in 2030 as hey move ino older age groups.

exhiBit 8

Older Americans will work longer

0%

10%

20%

30%

40%

50%

60%

70%

80%

5564 6574 75+

2000

2010

2020

2030

Percent in labor force

59.3

65

69

72.6

19.2

25.9

33.531.1

5.37.4

9.7



27/69



exhiBit 9

Labor-force participation will decline as Baby Boomers age

Tis decline in labor-orce par-

icipaion as cohors o work-

ers age will creae a sunami o

Baby Boomer reiremens over

he nex wo decades.


0%

10%

20%

30%

40%

50%

60%

80%

100%

70%

90%

Percent in labor force

2010 2020 2030

81.2

69

33.5

65

31.1

12.4

25.9

9.7

3

4554 in 20105564 in 2010

6574 in 2010

Baby Boomers

0

5

10

15

20

25

20102020

20202030

Baby Boomers

4554 in 2010 5564 in 2010 6574 in 2010 Total retirement

5.4

15.8

12.3

6.8

3.5

1.5

21.2

24

In millions

exhiBit 10

Baby Boomer retirements, 2010 to 2030


28/69


Based on hese labor-orce paricipaion-rae

rends, 21.2 million workers will reire beween

2010 and 20205.4 million as hey age rom 45

o 54 o 55 o 6416; 12.3 million as hey age rom

55 o 64 o 65 o 74; and anoher 3.5 million

(rom he cohor older han he Boomers in 2010)as hey age rom 65 o 74 o 75 o 84. Beween

2020 and 2030 anoher 24 million workers will

reire, as shown abovedrawn mosly rom work-

ers in he 45-o-54 age group in 2010 ha will be

in he 65-o-74 age group in 2030.

All old, hese 45.2 million reiremens accoun

or he vas majoriy o he exis rom he labor

orce beween 2010 and 2030; 40.2 million

reiremens will occur wih he Baby Boomersalone. Some reirees are orced o leave he

workorce as a resul o disabiliy or discour-

agemen, bu he large majoriy leave hrough

a decision o end heir careers. Te number

o exis rom he workorce is larger han he

number o reirees calculaed above primarily

because some workers leave he workorce when hey die.

exhiBit 11

Exits versus retirements (in millions)

0

5

10

15

20

25

30

35

20102020 20202030

Retirements

Exits

21.2

27.3

24

31.3

+6.1

+7.3

In millions



29/69


Section 5: The flow of replacement

workers and their characteristics

Te seadily rising ide o exis rom he workorce refecs he arrival o he Baby

Boomers in reiremen years. Even wih our assumpions o coninued delay in

reiremen ha ollow he BLS projecions, we nd a need o replace a massive

number o reirees , as well as a need o mee he demands o overall growh in he

labor orce. Who will ll hese growing needs is an imporan quesion.

Tere are hree caegories o new enrans o he workorce: grown children o

naive-born parens; immigrans; and grown naive-born children o immigrans(he second generaion). We esimae he numbers or each o hese hree sources

o new addiions o he uure labor orce. A he same ime, we also race wha

race/ehnic groups will be providing he needed workers.

Esimaion o infows o new workers ollows a parallel mehod o he esimaion

o exis. We race specic cohors as hey grow older, apply he raes o labor-orce

paricipaion ha are projeced o perain a he end o each decade, and hen

subrac he number presen a he beginning o he decade rom hose a he

end. Tis measure o labor-orce enrans is a ne cohor measure o growh. We

have carried ou his procedure or each deailed segmen o he populaion, as

dened by age, gender, race, and naiviy. Te resuls are summarized in he able

o enrances and exis presened in he appendix able.

Te oal number o enrans o he workorce has gradually climbed rom 37.1

million in he 1990s, wih projecions o 42.8 million in he 2020s. Beneah he

surace o his gradual change are some imporan shis in he characerisics o

he new enrans o he workorce.

Te share o immigrans has been relaively sable, ranging beween 22 percenand 25 percen o he new enrans each decade. (see Exhibi 12) In he mos

recen decade, he share o enrans made up o immigrans is hree imes as

large as he immigran share o he exis. Te children o immigrans (he second

generaion) are anicipaed o riple heir share o he workorce enrances, rising


30/69


rom 6 percen in he 1990s o 17.9 percen in he 2020s. A ha ime he second-

generaion share o enrances will be more han our imes greaer han heir share

o he exis.

exhiBit 12

Nativity of entrances to the workforce by generation, 1990 to 2030


1990s 26,492,224 2,211,892 8,443,048 37,147,164

2000s 23,826,038 3,189,631 8,830,193 35,845,863

2010s 26,013,183 5,240,390 8,761,006 40,014,580

2020s 25,326,749 7,674,463 9,808,356 42,809,568

Percentage o total entrants

1990s 71.3 6 22.7 100

2000s 66.5 8.9 24.6 100

2010s 65 13.1 21.9 100

2020s 59.2 17.9 22.9 100


Alogeher, immigrans and heir children combined will accoun or 40.8 percen

o he enrances o he workorce in he 2020s. Ta is in conras o heir 20.1

percen share o he workorce exis. (see Exhibi 6) Meanwhile, he naive-born

hird or laer generaions are seadily alling as a share o enrances, dropping rom

71.3 percen in he 1990s o 59.2 percen in he 2020s. I is clear ha a very large

porion o he workorce needs caused by he Baby Boom reiremens is going o

be me by immigrans and heir children.

Enrances o he workorce also vary by race and ehniciy. A sligh majoriy o

enrances in he mos recen decade were non-Hispanic whies (53.5 percen),

bu ha share is expeced o decline moderaely in coming decades, alling o

46.3 percen in he 2020s. (see Exhibi 13) Meanwhile, he Hispanic share o

he enrances is seadily rising, rom 23.7 percen in he mos recen decade o

29.9 percen in he 2020s. A ha ime Arican Americans will accoun or 13

percen o enrances o he workorce, Asians and Pacic Islanders 10.1 percen,

and Naive Americans 0.7 percen.


31/69


exhiBit 13

Race of entrants to the workforce, 1990 to 2030

1990s 2000s 2010s 2020s

Hispanic 7,076,720 8,495,321 10,018,547 12,815,694

Non Hispanic White 22,671,324 19,190,799 20,634,179 19,819,141


Native American 328,903 281,250 322,027 281,207

Asian, Pacifc Islander 2,787,736 2,878,249 3,633,044 4,345,160

Total 37,147,164 35,845,863 40,014,580 42,809,568

Percentage o total entrants

Hispanic 19.1 23.7 25 29.9

Non Hispanic White 61 53.5 51.6 46.3

Non Hispanic Black 11.5 13.9 13.5 13


Asian, Pacifc Islander 7.5 8 9.1 10.1

Total 100 100 100 100Source: Calculated rom Pitkin-Myers workorce projections.


32/69


Section 6: Net changes

in the labor force

Over a decade, ne changes in he workorce resul rom he dierence beween

he fow o new enries ino he workorce and he fow o workers leaving a he

end o heir careers. However, a much larger pool o experienced workers remains

in he workorce. Tis was oulined previously in Exhibi 2. A any ime, dieren

populaion groups are more concenraed in some sages han ohers, and heir

relaive prominence changes over he decades.

Te ne changes in he workorce in any period amoun simply o he dierencebeween he exis and enries. Previously, we accouned or he immigran genera-

ional or racial shares o exis and enries. Here, we examine he shares o he ne

changes, a ocus on how he workorce is changing a he margin.

Te oal growh in he workorce is slowing, rom 18.4 million in he 1990s o 11.5

million projeced in he 2030s. No all groups have been conribuing equally o

his growh in he workorce. In his secion, we examine dierences by immigran

generaion and by race/ehniciy in pas and projeced growh o he workorce.

Contributions of immigrant generations

Te share o ne growh comprising naive-born, hird- or laer-generaion workers

ell rom 10.6 million ne addiional workers in he 1990s and 3.6 million in he

2000s and is projeced o decline urher o 319,000 added workers in he 2020s.

Tis diminished growh is due o boh smaller cohors o young naive-born peo-

ple enering he workorce and he large Baby Boom cohors ha will be exiing.

Over he same decades, he ne growh in oreign-born workorce is projecedo coninue a gradual decline, rom 7.1 million in he 1990s o 4.8 million in he

2020s. By conras, he ne growh o he naive-born children o immigrans, he

second generaion is projeced o rise sharply in he uure. From a palry gain in

he 1990s, his group ripled is ne growh o 2 million in he 2000s. Is growh is


33/69


projeced o double again o 4.1 million in he curren decade, wih an addiional

ne increase o 6.4 million projeced in he 2020s. (see Exhibi 14)

exhiBit 14

Contributions of immigrant generations to net changes in the workforce


1990s 10,609,296 613,941 7,143,981 18,367,217

2000s 3,599,611 2,002,748 6,884,642 12,487,001

2010s 3,577,363 4,108,600 5,029,220 12,715,183

2020s 318,676 6,361,826 4,830,741 11,511,242

Percentage o the net changes

1990s 57.8 3.3 38.9 100

2000s 28.8 16 55.1 100

2010s 28.1 32.3 39.6 100

2020s 2.8 55.3 42 100


aken alogeher, a oal reworking is underway in he hree generaions share

o oal workorce growh. Te immigran share reached is peak in he 2000s,

when i conribued 55.1 percen o oal growh. In he 2020s immigrans are sill

projeced o accoun or 42 percen o oal growh. Meanwhile, he naive-born

children o immigrans are projeced o reach a 55.3 percen share o he growh in

he 2020s, while he hird or laer generaions will have allen o only a 2.8 percen

share o he oal growh. Immigrans and heir children already accouned or

71.1 percen o growh in he 2000s, he mos recen decade compleed, and hey

are projeced o accoun or virually all o he growh in he 2020s.

Contributions of racial and ethnic groups

Back in he 1990s non-Hispanic whies comprised he larges share o growh in he

workorce, a ne increase o 7.9 million workers. (see Exhibi 15) Aer ha decade

his segmens growh was sharply reduced and was a ne negaive in he 2000s. A

sligh upurn in growh in he curren decade refecs he larger size o he so-called

Millennial generaion, he children o he Baby Boomers, many o whom are whieand now passing hrough heir 20s, prime years or enering he workorce.

Consisen hroughou are he increases in he number o Hispanics in he work-

orce, which expands rom a ne increase o 6.1 million in he 1990s o 9 million


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projeced or he 2020s. (see Exhibi 15) Te numbers o Asians and Pacic

Islanders also show coninuous growh, albei a abou one-hird he level o

Hispanics, reaching an increase o 2.8 million projeced or he 2020s. Te num-

bers o Arican Americans in he workorce are projeced o add anoher 2 million

ne increase in each o he nex wo decades.

exhiBit 15

Contributions of different racial/ethnic groups to net changes in the

workforce

1990s 2000s 2010s 2020s

Hispanic 6,145,101 7,178,853 7,442,689 8,951,693

Non Hispanic White 7,852,875 -130,791 548,062 -2,251,659


Native American 244,954 103,089 84,586 23,254

Asian, Pacifc Islander 2,444,733 2,304,465 2,527,990 2,825,659

Total 18,367,217 12,487,001 12,715,183 11,511,242

Percentage o net changes

Hispanic 33.5 57.5 58.5 77.8

Non Hispanic White 42.8 -1 4.3 -19.6

Non Hispanic Black 9.1 24.3 16.6 17


Asian, Pacifc Islander 13.3 18.5 19.9 24.5

Total 100 100 100 100


Viewing each groups percenage share o oal workorce growh, wha is mos

sriking is ha he non-Hispanic whie populaion is shiing rom he larges

share in he 1990s (42.8 percen o he oal growh) o a negaive share in he

2000s and again in he 2020s. (see Exhibi 15) Meanwhile, he Hispanic share o

ne growh is seadily mouning, projeced o reach 77.8 percen o all he growh

expeced in he 2020s. A ha ime Asians and Pacic Islanders will accoun or

24.5 percen o oal ne growh and Arican Americans 17 percen.


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Section 7: Job growth, job openings,

and occupation changethe impact

of Baby Boomer retirements

Te demand or workers comes rom wo sources: job growh in he economy and

job openings o replace exising workers who reire or leave heir curren occupa-

ions. In analyzing he policy implicaions o uure job rends, i is imporan o

ake noe o his disincion beween new or addiional jobs and replacemen job

openings, as replacemen job openings are he larges share o oal job openings,

and he share o replacemen job openings will increase as Baby Boomers reire.

Repors oen ocus on he amoun and indusry composiion o job growh when

discussing educaion, raining, and immigraion policy. Tey ocus on where he

new and as-growing job secors are and wha skills are needed by high-growh

indusries. In ac, mos job openings come rom replacing exising workers who

eiher reire or die. In addiion, or his analysis ollowing convenions o he

Bureau o Labor Saisics, we exend he deniion o replacemen job openings

o also include workers who change occupaions. Boh rom he poin o view

o job seekers bu also rom a public policy perspecive, hese replacemen jobs

deserve our atenion.

Beween 2010 and 2020 he naion will need o ll 47.9 million job openings. Bu

less han hal, or 20.6 million, will come as a resul o job growh. And o hese

20.6 million added jobs, 8.5 million represen a recovery o jobs los during he

recession, wih 12.1 million jobs added rom addiional growh. (see Exhibi 16)

Te oher 27.3 million job openings will be o replace workers, mos o whom

leave exising jobs or reiremen.

Te balance beween replacemen job openings and job openings rom growhswings more heavily oward replacemen openings in he 2020 o 2030 decade, as

job growh slows bu reiremens remain high. Beween 2020 and 2030 he naion

will need o ll 42.6 million job openings.17 Te coninuaion o Baby Boomer reire-

mens is anicipaed o lead o he growh o only 11.3 million jobs. Replacemen job


36/69


openings, a 31.3 million, will

be close o he levels beween

2010 and 2020. Seveny-hree

percen o he job openings in

his decade, however, will come

rom replacemens, comparedo 57 percen in he previous

decade.

A reasonable scenario18 is ha

47.9 million job openings cre-

aed during he decade beween

2010 and 2020 will be lled

by 40 million enrans o he

labor orce, by 6 million cur-

renly unemployed memberso he workorce who nd jobs

(hereby lowering he unem-

ploymen rae o 5.5 percen),

and by nearly 2 million more

members o he workorce

aking muliple jobs. Similarly, he 42.6 million new job openings creaed during he

decade beween 2020 and 2030 could be lled by he 42.8 million enrans o he

labor orce wih small changes in he numbers o unemployed workers and hose

holding more han one job.

Te Bureau o Labor Saisics has published projecions o he growh in jobs and

job openings wih deail in erms o occupaions and job openings rom growh and

replacemen.19 Tese projecions, which exend rom 2010 o 2020, are he basis or

he analysis below o job openings and educaional and raining implicaions. Te BLS

deniion o replacemen jobs is broader han ours, as noed above, because i includes

job openings in some proessions ha occur when workers say in he workorce bu

leave heir curren occupaions o ake dieren jobs. When workers change occupa-

ions, he jobs hey leave behind mus be lled wih replacemens. Alhough replace-

men jobs due o occupaion change do no add o ne job openings, hey do aec hecomposiion o replacemen jobs available o job seekers and are worh examining.

o make our numbers consisen wih he BLS deniion o replacemen jobs,

we add 9 million job openings beween 2010 and 2020 and 10 million beween

2020 and 2030 ha are he resul o people moving rom one occupaion o

exhiBit 16

Job openings, 2010 to 2030

Source: Authors analysis and extension o labor-orce projections to 2020 rom Mitra Toossi, Labor orce projections to 2020: a

slowly growing workorce (U.S. Bureau o Labor Statistics, 2012), available at http://www.bls.gov/opub/mlr/2012/01/art3ull.pd

0

10

20

30

40

50

In millions

Job growth

Replacement needsTotal

2010-2015 Recovery 2010-2020 Beyond Recovery 2020-2030

8.5

12.1

27.3

39.4

11.3

31.3

42.6


37/69


anoher wihin he labor orce. Hence, using

his broader deniion o replacemen jobs,

we projec 36.3 million and 41.3 million oal

replacemen jobs in each decade. Exhibi 17

breaks down our projeced broader replace-

men jobs by decade in erms o hose due oreiremen, oher leavers (deah, disabiliy, or

oher reasons), and occupaion change.

Te BLS projecions o 2020 are slighly lower

han our analysis in erms o projeced labor-orce

growh (20.5 million compared o our 20.6 mil-

lion) and replacemen job openings (34.3 million

compared o our projecion o 36.3 million).

Te BLS projecions, however, provide he bes

picure available o he kinds o labor needs heeconomy will ace up o 2020. I was beyond he

scope o his analysis o exend he occupaional

and indusry projecions o 2030, bu oher

naional orecass o 2030 are consisen wih he

broad patern o change expeced beween 2020

and 2030 in erms o indusry and occupaional change.

As he naion recovers rom a long recession, he economy will need large num-

bers o workers in all major occupaions when replacemen-job- and occupaion-

change-induced needs are included in he projecions. Replacemen job openings

accoun or he majoriy o oal job openings in all occupaions excep proes-

sional and echnical occupaions and consrucion. As shown below, replacemen

job openings accoun or he large majoriy o oal job openings in sales, oce,

and producion occupaions. Service occupaions, which include ood service,

have a large number o new and replacemen jobs.

Proessional and echnical occupaions have he larges numbers o openings rom

job growh, nearly 6 million, and hese jobs require above-average levels o educa-

ion and raining. (see Exhibi 18) In addiion, 6.6 million replacemen job open-ings will become available in proessional and echnical occupaions. Projeced

consrucion job growh is enirely he resul o recovering a porion o he jobs

los during he recession.

exhiBit 17

Causes of replacement job openings, 2010 to 2030

0

5

10

15

20

25

Retirees Other leavers Change occupatio

2010202020202030

21.2

24

6.1

7.3

9

10

In millions

Source: Authors analysis and extension o labor-orce projections to 2020 rom Mitra Toossi, Laboorce projections to 2020: a more slowly growing workorce (U.S. Bureau o Labor Statistics, 2012

available at http://www.bls.gov/opub/mlr/2012/01/art3ull.pd.


38/69


Te raio o replacemen job openings o openings rom new job growh would

be even larger i he recovery o jobs los during he recession is removed rom he

job-growh caegory. In he BLS projecions, consrucion and manuacuring jobs

never surpass he 2007 level, and nancial-aciviy job levels reurn o 2007 levels

by 2020. Tis srenghens he case or why replacemen job openings should be a

primary ocus o policy atenion in he coming years.

Different types of replacement job openings

Mos job openings are he resul o people leaving he workorce. Some replace-men job openings, however, occur in occupaions where many workers move

on o higher-skill occupaions aer using hese jobs as enry-level posiions o

gain experience or o help pay he bills while hey are in school or pursuing oher

careers. Some examples are shown below. (see Exhibi 19)

0

5

10

15

20

25

30

35

In millions

Management,

business

and financial

Professional

and technical

Service Sales and

related

Office and

administrative

support

Construction

and

extraction

Production Installation

and repair

Transportation

and material

moving

Farming Total

Growth

Replacement

1.8

3.3

5.76.6

4.9

7.7

1.9

4.6

2.3

5.1

1.41.40.4

1.80.8 1.2 1.3

2.3

0.30

20.5

34.3

exhiBit 18

Job openings, 2010 to 2020 (in millions)

Source: Occupational employment and job-openings data, projected 2010 to 2020, and worker characteristics, 2010, rom U.S. Bureau o Labor Statistics, EmploymentProjections: Education and Training Data, available at http://www.bls.gov/emp/ep_data_education_training.htm (last accessed June 2013).


39/69


In a ew occupaions, job growh provides he larges number o openings. Familiar

examples include compuer-relaed occupaions, regisered nurses, and nursing

and home healh aides. In oher occupaions, replacemen job openings are ar

larger han openings rom job growh. Chie examples include reail sales and ood

preparaion (primarily cooks) and ood-service workers. In hese occupaions, many

workers ake hese jobs o ge sared in he workorce and hen move on o oher

elds, meaning here is a coninuous supply o openings available o new workers.

Tere is a second ype o occupaion where mos o he openings come rom

replacing workers who leave work as hey reire. Many producion, insallaion,repair, and ransporaion and maerial-moving occupaions ino his caegory.

Examples o hese occupaions include meal workers, laborers, and oher produc-

ion-worker occupaions. Tese occupaions have very litle projeced job growh,

and in some cases, projeced job declines, ye hey have he need o replace a

signican number o reiring Baby Boomers.

0

0.5

1

1.5

2

2.5

3

3.5

4

Computer

occupations

Other

engineering

and science

Registered

nurses

K-12 Teachers Healthcare aids Food prep

and serving

Retail sales Metal workers Other

production

occupations

Labor

In millions

Growth

Replacement

0.8

0.4

1

0.7

11.1

1

0.1 0.1

0.4

0.6

0.8

1.3

0.5

0.3

4

3

0.40.5

exhiBit 19

Job openings by major occupational group, 2010 to 2020 (in millions)

Source: Occupational employment and job-openings data, projected 2010 to 2020, and worker characteristics, 2010, rom U.S. Bureau o Labor Statistics, EmploymentProjections: Education and Training Data, available at http://www.bls.gov/emp/ep_data_education_training.htm (last accessed June 2013).


40/69


Workers o the Baby Boom generation are not only

older and more experienced than younger groups,

but they are also better educated than cohorts

that occupied similar preretirement ages in earlier

decades. As a result, their retirement will demand

replacements that are more skilled than were the

workorce replacements in earlier decades. As

shown in the sidebar chart, a much smaller share

o Baby Boomers, who were ages 45 or older in

2010, have less than a high school education (9

percent) compared to the low-education share

o those who were in this preretirement age in

1990 (22 percent). Conversely, a much larger share

o the Boomers in the workorce have achieved

some college or an associates degree (31 percent

versus 23.5 percent) or have a bachelors degree

or higher (32 percent versus 22.5 percent). Given

that these education levels are well above the

preretirement cohort o 1990, this means that the

workers needed to replace the Baby Boomers will

be skewed toward higher education levels as well.

The impact of Baby Boomer retirements on the education level of the workforce

0%

5%

10%

15%

20%

25%

30%

35%

Less than high school High school degree Some college or

associate's degree

Bachelor's deg

or higher

22

31.5

23.622.7

9.4

27.7

30.6 32

1990

2010

Education of workforce ages 45 and older, 1990 and 2010

Source: 1990 Census; 2010 American Community Survey.

Te wide variey o job openings ha will have o be lled by 2030 has several

implicaions or educaion, workorce raining, and immigraion policy. Tere

are hree main akeaways rom his secion. Firs, replacemen job openings, no jus

hose rom oal growh, should ge careul atenion in he design o immigraion,

educaion, and oher workorce policies. Second, he naion will need new workers

a virually all skill levels once he large number o reiremens is aken ino accoun.

Tird, he loss o so many experienced workers when he Baby Boomers reire pus an

emphasis on immigraion policy ied o replacing hese workers and on policies ha

help exising workers move up. A nal observaion is ha even hough his analysishas emphasized workorce demands anicipaed over he coming decade or wo, even

in his ime o high unemploymen some businesses already repor shorages o work-

ers in occupaions ha range rom arming o manuacuring and even o high ech.


41/69

Section 8: Education and skill

requirements of new and

replacement jobs

Te job openings rom growh and rom replacing workers who leave he labor

orce will be lled by workers in hree broad caegories:

1. New enrans o he labor orce.20

2. Exising workers who can improve heir skills and can ake beter jobs. In he

shor erm, some exising workers will reurn aer being unemployed.

3. New immigrans.

Te new enrans will be younger and have less experience han he average educa-

ional and experience prole or exising workers and new immigrans.

Wih his inroducion, he repor now looks a he educaional and oher require-

mens o new and replacemen job openings. Te Bureau o Labor Saisics has

inroduced a new and more deailed analysis o pahways o new and replace-

men job openings. Job openings are analyzed in hree dimensionseducaional

requiremens, raining requiremens, and experience requiremens.21

Te jobs ha will be added beween 2010 and 2020 have slighly higher educa-

ional requiremens han odays jobs, bu he dierences are no large. Te Bureau

o Labor Saisics projecs a 14.3 percen growh or all jobs beween 2010 and

2020. A higher growh rae is projeced or all job caegories requiring more han a

high school educaion, as shown below. Te highes growh rae is or jobs requir-

ing a masers or docoral degree. (see Exhibi 20)



42/69


Doctoral or professional degree

Master's degree

Bachelor's degree

Associate's degree

Postsecondary non-degree award

Some college, no degree

High school diploma or equivalent

Less than high school

All occupations

19.9%

21.7%

16.5%

18%

16.9%

17.5%

12.2%

14.1%

14.3%

Bu he educaional requiremens or all jobs and or all job openings, including new

and replacemen jobs, are no projeced o change much beween 2010 and 2020.

And he BLS projecions, based on 2010 educaion and occupaional proles, indicae

ha nearly 70 percen o U.S. jobs will require a high school educaion or less in 2020.

Tese daa, however, are misleading when i comes o undersanding he educa-

ional and raining implicaions o lling uure job openings. Firs, skill require-

mens or all jobs will almos surely increase by 2020 rom he 2010 proles ha

were used in he BLS occupaional/educaion projecions.

Second, mos o he jobs requiring less han a high school educaion are in a small

se o occupaionsood preparaion, some consrucion occupaions, and some

producion, ransporaion, and maerial-moving occupaions. And while some

are permanen jobs or people hroughou heir lieimes, many o hese low-skilled jobs are and need o be sepping sones o upward career mobiliy i we are

o ll he counrys replacemen job openings.

Source: Employment and total job openings by education category, 2010, and projected to 2020 rom U.S. Bureau o LaborStatistics occupational-employment-projections data rom C. Brett Lockard and M ichael Wol, Occupational employment

projections to 2020, Monthly Labor Review (2012). Source: Employment and total job openings by education catego2010, and projected to 2020 rom U.S. Bureau o Labor Statisticsoccupational-employment-projections data rom C. Brett Lockard

Michael Wol, Occupational employment projections to 2020, MLabor Review (2012).

exhiBit 20

Growth rate by educational attainment for new jobs, 2010 to 2020

0%

5%

10%

15%

20%

25%

30%

35%

0%

Les

high

High school

degree

Some

college or

associate's

degree

Bachelor's

degree

or higher

20.3

10.5

.

exhiBit 21

Educational requirements for all jo

openings, 2010 to 2020


43/69


Te rends or jobs requiring jus a high school degree are worhy o closer analysis.

Te BLS daa allow us o analyze he impac o addiional raining and experience

or workers who do no need ormal educaion beyond high school. Hal o he

new jobs requiring no more han a high school educaion also require moderae or

long-erm on-he-job raining, or OJ, or an appreniceship, and nearly he same

share is required or all new and replacemen openings beween 2010 and 2020

ha require no more educaion beyond high school.

Plasterers and Stucco Masons

Dishwashers

Roofers

Drywall and ceiling tile installers

Cement masons and concrete finishers

Helperscarpenters

Helperselectricians

Helperspainters, paperhangers, plasterers, and stucco masons

Helperspipelayers, plumbers, pipefitters, and steamfitters

Helpersroofers

Sewing machine operators

Maids and housekeeping cleaners

Landscaping and groundskeeping workers

Packers and packagers, hand

Butchers and meat cutters

Laundry and dry-cleaning workers

Cleaners of vehicles and equipment

Construction laborers

Cooks

53%

48.9%

47.2%

46.1%

43.8%

43.8%

43.8%

43.8%

43.8%

43.8%

42.9%

41.3%

41%

40.9%

38%

36.9%

36.2%

35.9%

33.8%

Source: Educational attainment or workers 25 years old and older by detailed occupation rom U.S. Bureau o Labor Statistics, Employment Projections: Education and Training Data, available athttp://www.bls.gov/emp/ep_data_education_training.htm (last accessed June 2013).

exhiBit 22

Selected occupations where more than 30 percent of workers have less than a high school education


44/69


Source: Employment by education by on-the-job training category, 2010, and projected to 2020rom U.S. Bureau o Labor Statistics, Employment Projections: Education and Training Data, availableat http://www.bls.gov/emp/ep_data_education_training.htm (last accessed June 2013).

Te jobs requiring appreniceship or long-erm OJ pay subsanially more han

he jobs ha require only moderae or shor-erm OJ. High school graduaes

wih appreniceship or long-erm on-he-job raining earned nearly $45,000 a year

in 2010, compared o $34,750 or graduaes wih moderae OJ and $28,420 or

high school graduaes who required only shor-erm OJ. Te implicaion is ha

replacing reiring workers wih jus a high school educaion will require many

workers wih addiional raining beyond high school.

Te earnings o high school graduaes wih no addiional raining are higher or

hose workers wih more experience such as reiring Baby Boomers will have. In

2010 median earnings or such workers wih more han ve years o experience

was $63,730, compared o $43,570 or less experienced workers.

0%

5%

10%

15%

20%

25%

30%

35%

40%

7.48.9

31.1

39.1

13.3

Apprenticeship Long-

term OJT

Moderate-

term OJT

Short-

t

Documents

The Contributions of Immigrants and Their Children to the American Workforce and Jobs of the Future