Aging Population Holding Back Labor Force Growth

Washington, DC, December 9, 2015--With the increase in the proportion of the population in older age groups, more people in the labor force will be entering prime retirement age. As a result, the labor force participation rate is projected to decrease and labor force growth to slow, according to biennial projections from the U.S. Bureau of Labor Statistics for 2014 to 2024.

This slowdown of labor force growth is expected, in turn, to lead to Gross Domestic Product growth of 2.2% annually over the decade. This economic growth is projected to generate 9.8 million new jobs—a 6.5% increase between 2014 and 2024.

The projections are predicated on assumptions including a 5.2% unemployment rate in 2024 and labor productivity growth of 1.8% annually over the projected period.

Healthcare occupations and industries are expected to have the fastest employment growth and to add the most jobs between 2014 and 2024.

Highlights of the Bureau of Labor Statistics projections for the labor force and macroeconomy, industry employment, and occupational employment are included below.

·  The civilian labor force is projected to reach 163.8 million in 2024, growing at an annual rate of 0.5%.

·  The labor force continues to age. The median age of the labor force was 37.7 in 1994, 40.3 in 2004, 41.9 in 2014, and is projected to be 42.4 in 2024. At the same time, the overall labor force participation rate is projected to decrease from 62.9% in 2014 to 60.9% in 2024.

·  The labor force participation rate for youth (ages 16 to 24) is projected to decrease from 55.0% in 2014 to 49.7% in 2024. The youth age group is projected to make up 11.3% of the civilian labor force in 2024 as compared with 13.7% in 2014. In contrast, the labor force participation rate for the 65-and-older age group is projected to increase from 18.6% in 2014 to 21.7% in 2024. This older age group is projected to represent 8.2% of the civilian labor force in 2024 as compared with 5.4% in 2014.

·  Labor force diversity is projected to increase, with white non-Hispanics making up 59.6% of the civilian labor force in 2024, compared with 64.6% in 2014.

·  Real GDP (2009 chained dollars) is projected to grow at an annual rate of 2.2%, from $16.1 trillion in 2014 to $19.9 trillion in 2024.