AARP Eye Center
The Bureau of Labor Statistics (BLS) has released its newest employment projections for the 2019–2029 decade. By 2029, all members of the large baby boomer age cohort will be at least 65 years old. This demographic shift will drive several of the projected changes, including overall participation rates, the labor force’s share of older workers, and continued growth in the health care and social assistance sector.
More Jobs but a Slower Rate of Growth
The BLS projects an increase from 162.8 million to 168.8 million jobs over the 2019–29 decade. The annual growth rate (0.4 percent) is expected to be slower than the 2009-19 rate of 1.3 percent in the previous decade, as the economy recovered from the Great Recession. Out of all the industry sectors in the economy, the BLS projects that the health care and social assistance sector will add the most new jobs. This increase is primarily driven by an aging population and a continuation of the rise in chronic health conditions, which are expected to bolster the demand for health care services; six out of the ten fastest-growing occupations in the coming decade will be related to health care in some way.
An Aging Population and a Changing Labor Force
While the labor force is expected to increase in size by 8.0 million workers—from 163.5 million in 2019 to 171.5 million workers in 2029—the BLS forecasts that the labor force participation rate (LFPR) will decline slightly. The LFPR, which was slightly above 63 percent in 2019, is expected to decrease to approximately 61.2 percent in 2029. In recent months, this prediction came true early as the pandemic quickly drove the labor force participation rate down. While the LFPR may recover in 2021 as the pandemic subsides, the long-term projection is unlikely to change because it is mostly based on demographic changes.
As a critical mass of baby boomers move into retirement, their share of the civilian population in the workforce will decline. However, this is not the only reason economists predict a decline in the US labor force participation rate. The downward forecast is also a reflection of the continuation of the declining trend in men's participation overall and a slight decline in women's participation. Indeed, an increase in the number of workers staying on the job beyond traditional retirement age will be one way to partially offset these declines.
New Occupations Demanding New Skills
Slower labor force growth rates will also slow down total employment growth; meanwhile, employers may experience difficulties finding employees with the right mix of skills for the occupations that are growing. This challenge is likely to be compounded by the rapid evolution in technologies and the requisite competencies needed to interface with and manage them. This need for higher-level skills characterizes the sectors where jobs are growing the fastest. Along with the rapid rise in health care jobs, most of which require specialized education or credentials, the BLS forecasts rapid employment growth in the professional, business, and scientific services sectors. Computer occupations will also see fast job growth. Meanwhile, industries with jobs requiring less education, such as manufacturing and retail, are expected to lose jobs in the coming decade.
A Lasting Labor Market Imprint from COVID-19?
One important caveat to these latest projections is that they do not account for the labor market impacts of the COVID-19 pandemic. They are mainly based on historical data and existing labor market trends before the year 2020. As such, they are unlikely to capture any potential changes resulting from this year’s economic disruption. At this stage of the COVID-19 pandemic, we do not yet fully understand if the current slowdown will represent a mostly cyclical fluctuation or if it will generate lasting structural changes in the economy. One possibility is that it will speed up some of the shifts – such as a decline in the labor force participation rate – that the BLS predicted would happen over a decade to instead occur in just a few years.
For more jobs data: Find the latest employment data in the AARP Public Policy Institute's (PPI) Employment Data Digest, PPI's monthly review of job trends for those ages 55 and over. Visit the AARP website's work and jobs section for articles on work and unemployment and job search resources.