CHART 1
The U . S . labor force growth is slowing at a startling pace . The Bureau of Labor Statistics ( BLS ) reported that , between 1972 and 1982 , the labor force grew by 2.4 %. However , by 2002-2012 , the rate decelerated to 0.7 % and will drop to 0.4 % from 2022 to 2032 , an 83 % decline in 60 years . Consequently , the U . S . economy will only add 6.4 million workers to the labor force between 2022 and 2032 .
Three factors — declining population growth , an aging populace , and lower workforce participation — underlie sluggish labor force growth .
1 . A POPULATION ON THE DECLINE
U . S . population growth has declined to historic levels over the last 30 years . Mark Mather , Population Reference Bureau , shows that the population grew an average of 1.3 % per year during the 1990s . The growth rate slowed to nearly half ( 0.7 %) between 2010 and 2020 , the second slowest between-census growth on record . The COVID-19 pandemic further pushed the growth rate to a paltry 0.1 % between 2020 and 2021 . Although immigration improved the growth rate in 2022 ( 0.4 %), it remained less than one-third of the 1990s average .
Fewer children , later in life
Population and labor force growth depend primarily on the fertility rate ( number of children born to each woman ). Yet not only are women having fewer children ( 1.94 children per woman , 1990-2021 ) than needed to sustain the population ( i . e ., 2.1 children per woman is the replacement rate ), according to the BLS , ( See Chart 1 ) but they also have them later in life .
A publication by Penn Wharton , Measuring Fertility in the United States , shows that the birth rate crested between ages 25-29 at 117 children per 1,000 women in 2006 . By 2019 , most births occurred with women ages 30- 34 at a rate of 103 per 1,000 . The age at the time of childbirth increased , and the number of children declined by 12 % at the peak .
Historical fertility rate data give insight into the impact on various age groups ( see Measuring Fertility in the United States ). People born at the highest fertility rate ( 3.6 in 1957 ) will reach full retirement age ( 66 years ) in 2023 . Conversely , the fertility rate for those eligible to join the labor force in 2023 was 2.1 in 2008 , slightly over half ( 58 %) the number of children per woman .
Limited abortion access impacts
On June 24 , 2022 , the U . S . Supreme Court ’ s Dobbs v . Jackson Women ’ s Health Organization decision overturned Roe v . Wade , eliminating federal protections for abortion rights , which has resulted in many states severely restricting abortion access .
STAFFING
The ruling has impacted nearly a quarter ( 23 %) of reproductive-age biological women primarily due to a 7.7x increase in travel time to the nearest abortion providers ( Dench , Pineda-Torres , & Myers , 2023 ). The same researchers found that states with abortion bans had a 2.3 % higher fertility rate than those without restrictions , resulting in 32,000 additional births .
... DECLINING POPULATION GROWTH , AN AGING POPULACE , AND LOWER WORKFORCE PARTICIPATION – UNDERLIE SLUGGISH LABOR FORCE GROWTH .
Immigration will determine U . S . population growth or decline
The politics of illegal immigration and open borders notwithstanding , U . S . immigration policy will dramatically impact the nation ’ s population for decades .
Over the next 75 years , the Brookings Institute ( November 29 , 2023 ) projects that :
• Zero new immigration will cause a population decrease of 32 %.
• Low immigration ( i . e ., later years of the Trump administration ) will reduce the population by 3 %.
• Main immigration ( i . e ., the most consistent in recent history ) will generate an increase of 10 %.
• High immigration ( 1.5 million new immigrants per year ) will increase the population by 31 % over current levels .
Immigration can help offset lower fertility rates and the aging population : a point we discuss next .
2 . AN AGING POPULACE
The reduced fertility rate explains the slowdown in population growth and , at least , some of the reduction in the labor force . Another factor impacting the labor force is the aging population .
APRIL 2024 33