It seems that every agency you can think of wants to make long-term projections and forecasts. The Bureau of Labor Statistics (BLS) probably has at least some good insight into the jobs market, as it is the one that tallies up the official monthly unemployment and payrolls data. That said, it has to be a hard guess in making a forecast for the next decade.
The BLS has projected that total employment will grow by 8.4 million jobs to roughly 169.4 million jobs in the 2018 to 2028 decade period. The bureau says this expansion reflects an annual growth rate of just 0.5%, and it would be down from the 0.8% annual growth rate that took place from 2008 through 2018. There is also an assumption that the next Great Recession isn’t lurking in the coming decade as it did in the prior one.
24/7 Wall St. has dug through some of the underlying tables and spreadsheets within the government’s employment projections to make some individual data points. These include projected nominal figures for the decade ahead in gross domestic product, employment, participation rates, wages and salaries, total population, government spending deficits, sectors for growth and contraction and more.
There are some spots of brightness in the BLS forecast for the next 10 years, but there are also some very troubling projections that may have serious implications on taxes, entitlements and how our society progresses over this time.
The BLS sees an aging population and a continued decline in the labor force participation rate over the next 10 years. It also sees employment growth continuing in the health care sector and in related industries and occupations over the next decade.
Other assumptions have been made as well. Real gross domestic product is currently projected to grow at roughly the same rate of about 1.8% (in 2012 chained dollars) from 2018 to 2028 as it did in the previous decade. Worker productivity is projected to improve slightly to an average rate of 1.6% per year from 1.3% in the prior decade.
Additional data has been compiled as follows:
- Labor force projected to increase at 0.5% per year from 2018 to 2028, for a total increase of 8.9 million in that time to 171 million.
- Labor force participation rate projected to fall to 61.2% by 2028, and the most recent 63.0% reading in 2019.
- Workers aged 65 years and older are expected to increase to 23.3% of the labor force 2028, while workers in the 16 to 24 age bracket are projected to decline to 51.7%.
- Workers of ages 55 and older will continue to increase to 25.2% of the labor force from 23.1%.
The United States has been a post-manufacturing economy for longer than half of the current workforce would even know. With the jobs focus around materials and services having dominated the U.S. economy, that is projected to continue in the coming decade. According to the BLS forecasts, the service-providing sector will grow by 0.5%, compared with 0.5% overall growth. The goods-producing (which includes manufacturing and related jobs) sector is now expected to grow by just 0.1% annually in the coming decade, after a 0.3% per year decline in the prior 10 years.
Health care and social assistance, education services and construction are expected to be the largest contributors in the services sector, for a combined total of over 4.6 million created in the coming decade (3.4 million from health care and social assistance combined). Also contributing to job growth will be positions tied to computers and software, mathematics and renewable energy (solar photovoltaic installers and wind turbine technicians). Apparently, the BLS isn’t factoring in any great changes around the proposed “green new deals” because this implies just 6,100 new jobs in PV installers and 3,800 new jobs in wind turbine technicians.
The BLS also has projected which five sectors are expected to see a decline in total employment in the next decade. These are listed as retail trade jobs, followed by wholesale trade, utilities, federal government and manufacturing. Of that drop, the retail trade group has been projected to see a 0.1% drop per year for an employment decrease of 153,700 jobs. The BLS points the finger at the ongoing shift to e-commerce activity, but this is also contributing to growth within transportation and warehousing employment.
Where the good news is in these forecasts is compensation and wages. The personal income is projected to rise to 4.1% in the 2018 to 2028 period from 3.5% from the 2008 to 2018 period. Of that, the wages and salaries component is projected to increase to 4.3% per year ahead from 3.0% in the past decade. Disposable personal income is projected to rise by 4.1% in the decade ahead, versus 3.6% in the prior 10-year period.
The BLS also has forecast that the total U.S. population, including overseas Armed Forces, will rise from 327.5 million in 2018 to 350.9 million in 2028. The total of total gross domestic product (nominal) of $20.494 trillion in 2018 is also projected to grow to $30.49 trillion in 2028.
Government deficit spending is also expected to continue ahead. Total federal government receipts of $3.4862 trillion in 2018 compared with $4.4721 trillion in total federal government expenditures. Those figures for the federal government are projected to be $5.1793 trillion in total federal receipts, versus $6.7767 trillion in total federal government expenditures in 2028.
According to the BLS report:
Much of the projected decline in the overall labor force participation rate from 2018 to 2028 is due to a decrease in the participation rate for men, from 69.1 percent to 66.1 percent. However, the participation rate for women is also expected to decline over the decade, from 57.1 percent to 56.6 percent… The projected growth (in productivity) indicates a recovery back to long-run productivity growth rates, and is expected due to a combination of factors, such as capital investment, technological advancement, and workforce education.
Making bold projections around a decade-out view is more than difficult. There are many guesses that have to occur, and some of the data from the prior decade and the decades of previous generations may have little to zero merit for future decades. These long-term calculations also make little to no accounting for recessions, global conflicts, and other major changes, which can rapidly change the makeup of a workforce.