The Bureau of Labor Statistics has just issued a new report on employment growth over the next decade. Prepared by the agency's career staff, it has an excellent record of forecasting industry and occupational trends. It contains good news for those seeking jobs -- if they have the right skills.
To calculate job growth, the BLS first does a long-term economic forecast utilizing the respected computer model of Macroeconomic Advisers. Its prediction is that real gross domestic product will rise at an average annual rate of 3 percent between 2002 and 2012. This is slightly less than the 3.4 percent annual rate in the 1980s and 3.2 percent in the 1990s. By 2012, the economy will have grown to $12.6 trillion (in 1996 dollars), up from $9.4 trillion in 2002.
The BLS sees investment spending by businesses as the driving force for growth. It is expected to rise at a 5.5 percent annual rate over the next decade. Increased spending on computers and software are a major reason for the higher investment. By 2012, businesses are expected to spend $1.6 trillion in this area, up from $420 billion in 2002, $75 billion in 1992 and just $11 billion in 1982 (all in 1996 dollars).
The BLS also envisions international trade rising in importance. Exports are expected to rise at a 5.7 percent annual rate and imports at a 5.2 percent rate. Imports and exports together will rise from 28 percent of GDP to 35 percent by 2012.
In addition to economic forces, demographic changes will also have a powerful effect on the job outlook. The most important of these is the continued "graying" of the population as the baby boom generation ages. The total labor force will rise by 12 percent between now and 2012, but those age 55 and over will increase by almost 50 percent. By 2012, these aging baby boomers will increase their share of the labor force from 14.3 percent to 19.1 percent.
Improving health and life expectancy will cause many older workers to stay in the labor force, rather than retiring. Those ages 65 to 74 are expected to raise their labor force participation rate to 23.6 percent from 16.3 percent in 1992 and 20.4 percent in 2002. Even many of those 75 and older are expected to continue working. Their labor force participation rate is projected to rise to 5.7 percent from 4.5 percent in 1992 and 5.1 percent in 2002.
Putting all these factors together allows the BLS to sort out the kinds of jobs that our economy will be creating in coming years. The good news is that most of the fastest rising occupations are well-paying jobs. The bad news is that those industries experiencing jobs losses in recent years will continue to shed workers.
Bruce Bartlett is a former senior fellow with the National Center for Policy Analysis of Dallas, Texas. Bartlett is a prolific author, having published over 900 articles in national publications, and prominent magazines and published four books, including Reaganomics: Supply-Side Economics in Action.
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