By 2030 U.S. standard of living could decline to 2000 level
According to Accenture, the U.S. standard of living is in danger of declining by 9% by 2030 – back to the level it was in 2000 – due to three major economic threats: an aging population, lower workforce participation and a flat or declining labor productivity growth rate.
The Accenture analysis is outlined in a new report, U.S. States: For Richer, For Poorer? Winning the battle for talent and securing our standard of living, which advocates that state governments develop and execute strategies to ensure a sufficient supply of talent to meet the country’s workforce demands. According to the U.S. Bureau of Labor Statistics, current workforce participation rates are at their lowest since 1977.
Peter Hutchinson, who leads Accenture’s public service strategy for North America state, provincial and local business, said: “For the first time in our nation’s history, the next generation may not be better off than their parents. For decades people have come to expect our economy and way of life to continue to improve, not decline. Our standard of living hinges on harnessing a skilled workforce to power our economies.”
Accenture identified three factors threatening the U.S. standard of living:
Population: As baby boomers retire, the working age population (15- to 64-years-old) is shrinking as a share of the total population. By 2030, the working age population could shrink by 9%, declining to a 1970 level.
Participation: There are not enough people of working-age actually working today, driven in part by youth unemployment (16- to 24-years-old).
Productivity: States are facing an unreliable growth rate in workforce productivity, which has fallen below 1% for five of the past 10 years and is now at one of its lowest points since 1960.
Accenture’s analysis, as well as survey findings, point to several factors affecting participation and productivity growth rates: Employers are not finding the skills they need for open positions, the long-term increase in high school and college graduation rates is forecast to end and more than half of recent college graduates consider themselves either under-employed or working in positions that do not require their college degrees.
Key survey findings
Accenture surveyed citizens, employers, jobseekers and state employment officials across the country with additional interviews in 12 states: California, Florida, Illinois, Indiana, Massachusetts, Michigan, Minnesota, New York, North Carolina, Ohio, Texas and Washington. The surveys found growing dissatisfaction with government:
– The majority of citizens surveyed, 72%, said they have little or no trust in the ability of government to act quickly enough to address employment and skills issues.
– Only 18% of employers surveyed said they had sufficient access to the skills they require, and only 12% of job seekers say it is easy to find the right job.
– Among the job seekers, 58% cited a lack of access to job information as a major barrier to finding employment.
– Both job seekers (48%) and employers (56%) say they would value better matching of skills needed by employers against available jobs.
– A majority of employers (62%) do not think government is anticipating future skills demands.
Peter added: “States are in a battle for talent. To win that battle, states need strategies and tools that can increase workforce participation and accelerate productivity growth. And they must act now.”
Recommendations for Action
The report recommends a number of strategies and tools to increase workforce participation and accelerate productivity growth, including:
– Real-time information on the demand and supply of skills and competencies. Today’s jobs and skill needs are different from those in the past, making historical data an unreliable predictor of future talent demand or supply. Accenture recommends that states provide real-time, skill- based information about jobs that are in high demand and promote the workforce qualifications needed to fill those jobs; this will result in better directing employers to the right pools of talent, helping job seekers match their skills with employer needs, and engaging educators to focus on developing the employment skills needed for today’s economy.
– Talent supply pipelines. States should create talent supply pipelines that can provide employers, including government, with reliable access to the skills and competencies they need.
– Roadmaps showing pathways to jobs. States should offer every job seeker a personalized road map that shows him or her how to put unique talents to work to gain the skills and competencies needed for the desired job.
– United talent agenda focused on increasing standard of living. States should create a unified, statewide talent agenda that pulls together all related agencies, programs and budgets that focuses on increasing the standard of living.
Peter continued: “For most of our history, we could take talent for granted. It was plentiful. In the future, it will be a scarcer resource. Strategies that worked in the past are not going to work in the future. States that act now and act decisively will have a competitive advantage in winning the battle for talent.”