Aging Americans Means Shrinking Workforce
Americans are getting older, and family size is getting smaller. That means the United States will have less working adults in the future.
By 2030, twenty percent of U.S. residents will be 66 years of age or older. That compares to 13 percent in 2010, and just under 10 percent in 1970.
The aging population could be a concern if Americans expect to have an expanding population, says David Kelly. He is with the investment company J.P. Morgan Asset Management.
“If you're investing in things like the housing industry or the auto industry and you need an ever-growing population, then you have to adjust to a world in which the U.S. population is growing more slowly,” he said.
Different studies show that an aging population cuts into economic growth, and older workers who stay on the job are often less productive than younger ones.
But as Americans are aging, last year the birth rate nationwide dropped to its lowest level in 32 years. Less than 3.8 million babies were born in 2018, which is two percent less than the year before. Taken as a whole, the population grew only six-tenths of one percent in 2018, compared to 1.2 percent growth in the 1990s.
Kelly said the low birth rate is not necessarily bad news. Looking beyond economics, a growing world population could do more damage to Earth’s environment. He said that U.S. policy makers should plan for dealing with a smaller workforce.
“We really should adapt to a world of slow population growth because it's clearly happening to us,” he said.
What will replace human workers? Like others, Kelly expects the lack of workers to fuel the growth of robotics and artificial intelligence. He said that Americans need to prepare for the U.S. economic growth to slow a little in the future.
Another way to fix the shrinking workforce is to add more legal immigrants. Immigrants usually arrive in the United States when they are of working age.
But this is not an easy solution, because the U.S. Congress and President Donald Trump continue to disagree over how to deal with immigration issues.
The U.S. economy can easily make changes to deal with the slower population growth, Kelly said. But he worries that politics could get in the way of solutions.
“The real question is a political question,” he notes, “because it seems even as our population matures in years, it seems that our political system gets less mature in terms of thought process.”
I’m Anne Ball.