WHO IS THE FUTURE AMERICAN WORKFORCE? - Herman, Neuhauser Research Management Consulting, Inc.,

Brian Herman and Claudia Neuhauser

The size of the US workforce is not keeping up with the demand. For over a year now, the number of job openings has exceeded the number of people available to be hired. Slower population growth and an aging workforce will further hamper the growth of the workforce in the US, which is projected to only increase by about 0.5% over the next ten yearsⁱ. Our national economic growth is jeopardized if we cannot increase the workforce to meet demands. Immigration and increasing the success of turning education into careers need to be part of the solution.

The future of our economy will depend heavily on being able to fill job openings. It turns out that we can expect that the mismatch between the available workforce and the types of jobs available will be particularly acute at the two ends of the skill spectrum. Many of the occupations with the largest number of job openings in the US will require either no formal education or just a high school diploma: personal care aides, food preparation and serving workers, home health aides, janitors and cleanersⁱⁱ. Even though technology is rapidly replacing the need for a human workforce in a number of industriesⁱⁱⁱ, many of these low-skilled jobs will be difficult to automate. Highly skilled STEM graduates are also in short supply. Our workforce has relied heavily on immigration to fill jobs at both ends of the skill spectrum, with 28.3 million foreign born persons (17.4% of total work force; 50% of whom are Hispanic and 25% of whom are Asian)^I.

Proposed changes to the “public charge” determinations for immigrants and the more restrictive security driven policies impacting educational and research international collaborations will have a chilling effect on meeting future US workforce demands. With immigrants being overrepresented in low skill occupations and only a minority of US students translating their education into careers^iv, insufficient numbers of employees at both ends of the skill spectrum will constrain economic growth in the U.S. for decades to come.

States are sounding the alarm. A recent report about workforce challenges facing the state of Minnesota^v highlights that in order to maintain the current average annual 0.5 percent growth rate of Minnesota’s labor force, the state will need to attract about four and a half times the current number of people who move to the state. The report concluded: “Without a substantial increase of migration to Minnesota in the future, the state’s labor force will likely grow much slower than it has in recent years. This will make filling job vacancies more challenging in the future.”

If the US continues to be welcoming to immigrants, there might be good news: Projections indicate that the number of immigrants living in the U.S. may increase from about 43 million in 2015 to 78 million in 2060^vi. Many of these are highly skilled: The share of college-educated immigrants was much higher—47 ~~percent~~%—among those who entered the country in the previous five years (between 2012 and 2017)^vii than the slightly higher than 30% of adults ages 25 and older who hold a bachelor’s degree or higher.

The high percentage of highly skilled immigrants should not come as a surprise. Since 1990, the number of international students enrolled in U.S. higher-education institutions more than doubled, from 408,000 in the 1990-91 school year to 1,120,085 in 2018, according to SEVIS. Many decide to stay in the US. Asia (Chinas, India, South Korea and Saudi Arabia) sent the most students (861,027, or about 77%), followed by Canada (27,995). More than half (52%) of international students majored in business and management, engineering, and math and computer science^viii.

At the low end of the skills spectrum, immigrants play an important role and show much higher labor participation rate than native-born individuals. For example, the workforce participation rate of Hispanic foreign-born high-school graduates (72.2%) is comparable to white native-born bachelor’s degree recipients (72.7%) and significantly higher than native-born whites with merely a high-school education (53.8%)^ix.

Could the US meet its future workforce needs employing a “nationalist strategy” of reduced immigration? In the short run, this is highly unlikely. The population growth of US born citizens is projected to be between 0.4-0.75%/year over the next few decades^x. Thus, continued immigration and educational training of immigrants in skills necessary for the jobs of the future, as well as increasing the number of US born citizens who turn their education into careers, will be required to meet the workforce needs of the US going forward.