A projected slowdown in labor force growth is expected to generate fewer new jobs during 2006-16 than in 1996-2006; replacement needs are anticipated to produce almost twice as many job openings as growth in the economy will, and occupations that provide services to the elderly are expected to be among the fastest growing
Changes to the U.S. population and economy through 2016 will affect both employment in general and employment by occupation. During 2006-16, the civilian noninstitutional population aged 16 years or older is projected to increase by about 22 million, from 229 million to 251 million. (1) As the baby-boom generation ages, the segment of that population aged 55 years and older is expected to increase by 20 million--nearly as much as the increase in the total population--reaching 87 million by 2016. The swell in the 55-years-and-older group will lead to an increase in the proportion of the population in older age groups, with the share of those 55 years and older rising from 29.3 percent in 2006 to 34.8 percent in 2016. The latter age group is anticipated to be the fastest growing segment of the population between 2006 and 2016, with an annual growth rate of 2.7 percent, compared with 0.9 percent for the population 16 years and older.
Over the 2006-16 projection period, growth in the labor force is projected to slow significantly, for two reasons: the baby-boom generation is aging and retiring, and the labor force participation rates of women have peaked. (2) The labor force is expected to grow at an annual rate of 0.8 percent during 2006-16, compared with a rate of 1.2 percent in 1996-2006. Although the labor force participation rate for those aged 55 years and older is anticipated to jump from 38.0 percent to 42.8 percent during the coming decade, a large number of persons aged 55 years and older are expected to retire and leave the labor force.
The retirements of baby boomers will have a substantial impact on job openings over the coming decade. Net replacement needs are defined as job openings generated due to the necessity of replacing workers who permanently leave an occupation. Except in occupations that employ large numbers of young workers, such as waiters and waitresses, a large number of the job openings due to net replacement needs are expected to come from occupations that will lose workers to retirement. (3) Replacement needs are anticipated to generate 33.4 million job openings. In contrast, economic growth is projected to generate 17.4 million job openings. (4)
The sizes of the labor force and population have an effect on the overall magnitude of the economy. Gross domestic product (GDP) is projected to rise at an average annual rate of 2.8 percent over 2006-16, reflecting increasing demand for goods and services. (5) Globalization is expected to lead to increases in both imports and exports. Although the rising demand for goods and services will continue to boost overall employment, a slowdown in both labor force and productivity growth will constrain employment growth. (6)
The Bureau of Labor Statistics (BLS) projects that total employment will increase from 150.6 million in 2006 to 166.2 million by 2016.7 This increase of 15.6 million jobs is slightly less than the 15.9 million increase over the previous 10-year period and represents a slightly slower 10-year growth rate (10 percent, as opposed to 12 percent) than the rate registered over the 1996-2006 period.
In 2006, almost 92 percent of all jobs were held by wage and salary workers, while about 8 percent of all jobs were held by the self-employed. Self-employment is projected to increase 5.5 percent over the 2006-16 decade, from 12.2 million to 12.9 million jobs. (8) Although that percentage is just half the 11-percent growth projected for wage and salary workers, it reverses the downward trend represented by the 3-percent decline in self-employment seen …