Changes in the American Workforce Surprising Demographers Need the Attention of Talent Strategists

11/30/18

With the Holidays coming and hopefully time for reflection, we would recommend spending a few hours with Diversity Explosion, a book providing penetrating perspectives of the tectonic shifts in population trends influencing the workforce of tomorrow. Author and Brookings scholar William H. Frey details how the U.S. is being transformed from a culture dominated by white baby boomers to a more globalized, multiracial society—a development that will present both opportunities and challenges. Employers were fortunate that the growth rate of the American labor force was 13 percent in the 1990s and 11 percent from 2000 to 2010. However, that growth will only be four percent in the second decade of the 21st century and two percent in the third. 

The book is timely on several levels. Demographers like Frey were surprised by the scope of the changes revealed in the 2010 census. As those changes proliferate, questions are being asked whether the 2020 census will be an accurate portrayal of American society. 
 
One issue is the categories Census uses to collect data, which some believe are not keeping step with the kaleidoscope of racial and ethnic distinctions now being recognized. Another is the legal battle over whether the 2020 census will ask residents about their citizenship status as intended by the Trump administration, an issue on its way to the Supreme Court. There is concern the question will discourage certain segments of the population from participating. Texas, for example, gained almost one million children between 2000 and 2010, with Hispanics accounting for 95 percent of that gain, according to Frey. The 2010 census resulted in the state being awarded four additional Congressional seats, some of which have become blue. 
 
Frey asserts that America’s demographic changes have created a “cultural generation gap” between the relatively diverse young population and that part which is older and white. Each has a different view of government spending priorities, which begs Frey’s question—how much money will go to funding Social Security and Medicare versus educating the next generation of workers, who will be expected to provide it?
 
Among the key takeaways in Diversity Explosion are the following:    
  • The nation’s growth in the population of children during the first decade of the 21st century was due “entirely” to Hispanics, Asians, and multiracial youth such that three-quarters of population growth in the last decade came from these new minorities, a trend that will accelerate.
  • The white population will begin a decline during the next ten years, primarily among younger populations, such that no single racial group will be the majority, probably sometime after 2040.
  • The Great Migration of blacks out of the South during the 20th century has “turned into a wholesale evacuation from the North—to largely prosperous southern locales” such as Atlanta.
  • Hispanics and Asians account for at least 18 percent of purchasing power in the United States, a number on the rise.
  • Hispanics are now the biggest drivers of growth of the nation’s metropolitan population in both cities and suburbs.
  • Overlooked in demographic discussions is the Asian population explosion, perhaps because the trend is relatively recent—more than 85 percent of current U.S. Asians are either first or second generation Americans. 
  • In the 1970’s, Asians were 0.8 percent of the American population as compared with roughly 5.0 percent today, a figure likely smaller than it should be because of the number of Asians of mixed-race heritage. 
  • American-born Asians have shown a penchant for pursuing higher education, with one-half of all Asian adults having college degrees and most with instruction beyond high school. 
  • California is still home to the largest number of Asian Americans, about one-third of the U.S. population.
  • Today, about one in seven new marriages is multiracial, including nearly half of those involving Hispanics or Asians. 
  • Black-white marriages comprise one-eighth of all marriages involving blacks.
One challenge for employers is that the labor force will become increasingly Hispanic, and Hispanic children are more likely to attend underfunded, segregated schools. Frey warns that because states are required to balance their budgets, programs for youth, such as education, are far more vulnerable to economic downturns and budget cuts.
 
The good news for America is that while the labor force ages of nations such as Japan, Germany, Italy, and the U.K. are both older and in decline, the U.S labor force is still expected to grow by more than 5 percent between 2010 and 2030. Yet the plurality of new jobs will require postsecondary training, and companies will need to ensure workforce entrants have improved access to education.
 
Blacks and Hispanics, Frey documents, are far more likely to enroll in two-year colleges and less selective four-year universities. They also experience lower rates of completion. In our technology-driven workplace, trends such as those will need to be addressed by ensuring the workforce of the future has both accessible skill development opportunities and ones that retain students. 
 
Diversity Explosion: How New Racial Demographics Are Remaking America can be purchased from Amazon.