By Mekael Teshome
The new normal for long-term U.S. economic growth is lower than previously forecasted. Japan has robotic nurses caring for patients. Germany accepted almost one million refugees in 2015.
What do these very different facts have in common? They are all driven by a rapidly aging global population. According to the U.S. Census Bureau, by the year 2020 – and for the first time in history - people age 65 and over will outnumber children under age five.
That same report showed that by 2050 approximately 16.7 percent of the world’s total population will be over age 65.
As growth of older generations outpaces the younger ones, the workforce is transforming in unprecedented ways that are expected to affect your career path.
People have fewer children, which means fewer workers for the same amount of work.
Nationally, Pew Research reported in 1976 that 36 percent of women in their early 40s had four or more children compared to 2014 when just 12 percent had four or more. Approximately 65 percent of modern parents said the reason they have fewer children is the cost of raising them. This all translates into fewer workers entering the future U.S. workforce.
On a local level, Pittsburgh likely will face a worker shortage within the next 10 years, according to the Allegheny Conference on Community Development, when it is estimated that approximately 29,000 people in the region will retire. The majority of these workers will need to be replaced, in addition to the ongoing annual demand of 5,100 people required to fill new jobs.
The Allegheny Conference estimates there will be 26,000 high school seniors in the region by then, leaving the Pittsburgh workforce about 8,000 workers short.
Pittsburgh’s demographic challenges are compounded by the reality that younger workers are choosing to leave the region for work in different cities. This trend is likely to continue.
Pittsburgh is just one example. Many other cities face similar situations when it comes to anticipated future workforce needs.
One in seven Americans is over 65 – that means retirement is imminent.
Fifteen percent of the U.S. population was at least the age of 65 in 2015 and by 2050, 22 percent will be age 65 or older. Factcheck.org cited that in 2016, 3.6 million baby boomers are predicted to retire.
There are significant implications of a rapidly aging society for employers:
Management gaps will be created.
Because baby boomers are retiring and there aren’t as many in the generation X population, there will be more job openings than there are workers to fill them.
Today, there are more employees in the workforce from the millennial generation than any other. According to Factcheck.org, more than one quarter of millennials will become managers; however the concern is they don’t possess the skills or experience to fill in 1:1 for a baby boomer who has benefited from being in the workforce for decades.
Also, the younger generations likely will feel more of an economic burden because there will be more retirees to support.
Jobs likely will be combined.
This specifically will affect manufacturing sectors. More job automation likely will result in fewer workers on the job; however, these automation changes will enhance what machines currently produce, so the workers operating those machines will need to acquire the technical skills necessary to keep up with these changes.
Having different generations in the workplace offers a wide range of experience and perspectives. How can you navigate a work environment regardless of age?
Get more analysis of economic and financial trends from the PNC Economics Division »
PNC Point of View
Real People. Real Perspective. Real Insights. »