Chart of Today: Shrinking Workforce

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workforce_growthThis chart, published by Hamilton Lombard on the StatChat blog, shows how the working-age population of the United States has begun shrinking in much of the United States. While metropolitan areas still experience a growing workforce as they suck up labor from rural counties, even urban growth is slower than it was ten to fifteen years ago.
The downside of this trend, is that working Americans will have to support a fast-growing population of elderly Americans, along with the Medicare, Medicaid and Social Security programs that benefit them. As has been widely publicized, government will become increasingly hard-pressed to finance these entitlements in the absence of meaningful reform.2000_growth
The bright side of the story is that intensifying competition for workers should translate into lower unemployment and higher wages, assuming the economy can continue to produce even modest job growth. (The next U.S. president, whoever he or she is, will no doubt claim credit for the benefits of demographic shifts forces over which they have no influence whatsoever.)
Here in Virginia, the public policy apparatus has not begun to think seriously about the implications of a stagnant workforce. “With shrinking workforces and lower unemployment rates, most rural areas will need to change their focus toward attracting workers rather than just keeping them,” says Lombard.
The same can be said of urban areas as well. If metropolitan areas want to grow, they, too, will need to change their focus to attracting workers. Fifteen years ago, urban geographer Richard Florida noted that corporate investment chased the workforce, especially what he termed the “creative class.” As the nation enters a no-growth phase for the workforce, that phenomenon should intensify. Virginia communities will need to re-think what constitutes economic development. Instead of using subsidies and tax breaks to lure corporate investment, communities should expend resources to create the amenities that lure young workers, especially skilled and educated members of the creative class. Attract the workforce, and the corporate investment will follow.
(This article first ran in Bacon’s Rebellion on November 7, 2016)
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