Francese reports that labor force growth is projected to be much faster in Latin America, including the Caribbean, than in the U.S. during the next decade, which may have a considerable impact on how consumer markets in the regions develop. Two of the countries with the largest regional economies and populations – Brazil and Mexico – also have some of the highest labor force growth rates.
Between 2000 and 2010, the U.S. labor force grew 8% to about 154 million workers, significantly less than the 24% growth seen in Latin America where it reached 281 million workers in 2010, according to the International Labor Organization (ILO). The U.S. and Mexican labor forces are already intertwined, with the latest U.S. Census showing that 14 to 15 million Mexicans might already be in the U.S. labor force today.
In the subsequent decade, between now and 2020, workforce growth rates are projected to slow, but the U.S. Bureau of Labor Statistics (BLS) predicts a 7% increase in the U.S. against the ILO’s 18% growth prediction for Latin America.
"A long-term slowing of labor force growth could reduce the pace of overall economic growth, although if worker skills and productivity continue to rise, the effects of slower workforce growth would be largely mitigated by higher wages," said Francese. "Much depends on how nations react to slower labor force growth."
Francese offered that possible solutions could stimulate the growth rate, such as more carefully designed immigration policies or incentives for families to have children. He added, "If educational systems are well-funded to increase worker skills, and families with children are supported, then gradually slowing workforce growth may have little or no effect on economic growth for the foreseeable future."
Sandra Timmermann, Ed.D., director of the MetLife Mature Market Institute, added, "These labor force projections could have a huge impact on older Americans, many of whom will remain in the workforce beyond their 65th birthdays, especially the Baby Boomers who are now moving into the 65 to 74 age cohort.
"Beyond the fact that there is a need for them to keep working, they are also remaining in the workforce because they can, due to improving health conditions for older people and the evolved nature of work.
"The fast-moving digital economy has created and will continue to create millions of jobs around the world that do not require any physical strength or long hours standing outside, for instance" said Dr. Timmermann.
According to the report, workers age 65 or older still represent fewer than one in 10 employees and only a small minority of people that age are actually in the workforce. But the trend is clear; for a number of reasons, older people worldwide will almost certainly remain in the workforce longer than in the past. Economic necessity may also be a factor, particularly inadequate personal savings or reduced pension benefits.
Diverging Workforce Growth in the United States and Latin America can be downloaded from www.MatureMarketInstitute.com.
Peter Francese
Peter Francese is a widely recognized demographics and consumer markets expert. He founded American Demographics Magazine, now part of Advertising Age, and speaks and writes frequently on demographic and consumer trends. Francese is the recipient of the Silver Bell Award from the Advertising Council for distinguished public service and is a graduate of Cornell University.
The MetLife Mature Market Institute®
Celebrating its 15-year anniversary in 2012, the MetLife Mature Market Institute is Metropolitan Life Insurance Company’s (MetLife) center of expertise in aging, longevity and the generations and is a recognized thought leader by business, the media, opinion leaders and the public. The Institute’s groundbreaking research, insights, strategic partnerships and consumer education expand the knowledge and choices for those in, approaching or working with the mature market.
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