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america's dynamic workforce: 2008 |
Figure 5-2. Annual rates of labor force growth, 1950-2050
SOURCE: Mitra Toossi, “A New Look at Long-term Labor Force Projections to
2050,” Monthly Labor Review, November 2006, 19-39.
- The relatively fast growth of the population above traditional
retirement age combined with slower growth of younger cohorts is expected to
place severe constraints on labor force growth. This slowing will
extend an already well-established trend reflecting the aging of the baby
boomer generation.
- Labor force growth peaked at 2.6 percent in the 1970s, as a result of
the entry of the baby boomers into the labor force and significant increases
in the labor force predication rates of women. Growth dropped back below 2.0
percent during the following two decades and fell further to 0.9 percent
during the 2000-05 period. Between 2005 and 2050, annual labor force growth
is projected to slow further, averaging 0.6 percent.
- Slower labor force growth increases the importance of productivity
growth to enable the economy to expand output, to support increasing
proportions of older, retired consumers (and Social Security recipients),
and to facilitate increased living standards. Innovation, capital
investment, and investment in education and training create a foundation for
future productivity growth.
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