POPULATION GROWTH AND IMMIGRATION

Immigrants contributed to most of the population growth in both large and small cities in the United States between 1990-2000.

TABLE I: POPULATION CHANGE AND CONTRIBUTIONS TO GROWTH IN
SAN FRANCISCO, INDIANAPOLIS, AND A SMALL INDIANA TOWN: 1990-2000

BEYOND WORKFORCE 2020. Table 1. Hudson Institute, p.4

DECLINE OF AGRICULTRURAL JOBS AND SOURCES OF NEW LABOR

Although more than half of the population of less advanced nations is involved in agriculture, this distribution of labor is rapidly changing creating massive labor migrations in the search of less-skilled industrial and service jobs both within their own countries and in more advanced countries.

“Given the size of the world’s agricultural workforce, even small improvements will unleash vast numbers of people into the industrial and service labor markets. Every 1 percent of the global workforce that can move from farming to other sectors adds an additional 10 million new industrial and service workers……changes are coming in the way the world grows its food. And that means phenomenal changes to how the world apportions its labor resources.” Workforce 2020. Hudson Institute, p.7

COMPETITION IN WORLD LABOR MARKET

“….the most important demographic theme that confronts our workforce, employers, and policymakers [in the new century is] the growing mismatch between the location of the world’s new workers and the historical location of the world’s best jobs.”

Managers must not only deal with an interdependent global economy, but also an interdependent global workforce. (White Paper, p.2)

As the following chart illustrates, the less advanced nations will have an increasingly large share of the world’s available labor force.

SHARE OF THE WORLD’S LABOR FORCE FROM ADVANCED AND LESS ADVANCED NATIONS

Excerpted from, Workforce 2020, p.10

The United States competes in the world labor market for the best and brightest as well as unskilled workers while at the same time trying to prevent its own best jobs from emigrating to less developed countries.

Competition for skilled labor favors the United States due the significant wage disparities between the United States (and other Western nations) compared to that of non-Western nations. Migration flows tend to follow higher wages. Table 4 below illustrates these wage discrepancies.

TABLE 4: MOST RECENTLY AVAILABLE EARNINGS IN SELECTED NATIONS
AS A PERCENTAGE OF U.S. EARNINGS BY ECONOMIC ACTIVITY

Excerpted from Table 4. Workforce 2020. Hudson Institute, p. 6

“The less developed countries have a surplus of college graduates who speak Western languages. India has an astounding 520,000 IT engineers with starting salaries around $5000 per year. In comparison, U.S. schools produce only 35,000 mechanical engineers a year….It is predicted that by 2008 in India, information technology (IT) work and other service exports will generate $57 billion in revenues, employ over 4 million people, and account for over 7 percent of Gross Domestic Product.”

Texas Labor Market Review Newsletter. July 2003. Labor Market Information Department of the Texas Workforce Commission.

EFFECT OF AGING OF POPULATIONS
IN MORE VS LESS AVANCED NATIONS ON LABOR MARKETS

Through the middle of the 21st century, the world’s population will increase. However, this increase, except for the United States, will come disproportionately from population growth in less advanced countries.

For United States to meet its future labor needs, let alone other Western countries, it will increasingly depend on population growth fueled primarily by immigration.

The slowing of population growth in the more advanced countries and its affect on available labor markets is exacerbated by the aging of the population in these countries.

For advanced nations with political commitments to benefits for retired workers, the combination of either an absolute decline or slowing in the increase in number of people in the workforce compared to the number of retirees will create a major challenge to economic growth.

The 50 and over population in the more advanced nations is projected to increase from 99 million in 1950 to 248 million in the year 2000 and 308 million in 2050. This is a growth rate from 2000-2050 that is 68 times faster than for the population as a whole.

The situation will be less severe for the United States. However, as the Baby Boomer generation moves into retirement age, the labor force required to sustain economic growth will have to come either from higher levels of participation of those 65+ in the labor force or increased immigration or both.

Nevertheless, “….no practical degree of change to retirement activity can completely offset the slowdown in labor force growth. In 2030, that level of older labor force participation would require 84% of the 55-75 year old population to stay working.” p. 21

In order to address their labor market needs, as of the year 2000, every advanced nation was a net importer of labor and every less developed nation was a net exporter with the United States being the largest importer of international labor.

The United States is the largest consumer of international labor.

POPULATION AND WORKFORCE DIVERSIFICATION

The increasing disparity between the growth in the 50+ population of the more advanced countries compared to the much larger increases in the population of those under 60 years of age and younger in the less developed countries will intensify the global competition for these younger workers in order to maintain sufficient economic growth. Therefore, the labor force in the more advanced nations will have larger and larger proportions of immigrants.

The affect of increased immigration will result in increased population diversification. Since the source of population growth will be from the younger populations of less advanced, non-European nations, population diversification will be a feature of all advanced nations, particularly the United States.

Population diversification has shown in the table below will in turn affect the ethnic diversity of the workplace.

CHANGING ETHNIC COMPOSITION OF THE AMERICAN WORKFORCE

(Workforce 2020). Hudson Institute. Indianapolis, Indiana. 1998.)

Hispanics and Asians, moreover, will contribute an ever increasing share of the growth of the domestic workforce. Between 2000-2015, over half of net workforce growth will come from Hispanics and Asians. Between 2020-2050, these two groups will account for the entire growth in the workforce.

“As the middle of the next decade approaches…and the number of white workers begins to decline in absolute levels, any inability to attract or retain racial and ethnic minorities will bar employers from attracting or retaining the only source of workforce growth in the American economy.” White Paper by Justin Heet
Hudson Institute, p.26

THE UNITED STATES AS THE ENGINE OF THE GLOBAL KNOWLEDGE ECONOMY

“…to continue the gains in educational attainment that are at the heart of America’s knowledge economy, Hispanics and African Americans will have to occupy a far larger share of college and university lecture halls.” Correcting the imbalance between the educational attainment of whites and that of Hispanics and African Americans will be the key to the United States maintaining its competitive edge in the knowledge economy. White Paper by Justin Heet, Hudson Institute, p.26

As pointed out in the first issue in 2004 of SHRMS’s Workplace Visions, Europe will be in direct competition with the United States for “knowledge workers” among immigrant populations. In this competition, “we will see whether the European Social Model, with an emphasis on social capital, pays off. Because in a knowledge economy, success will increasingly depend on how attractive working conditions are to an in-demand pool of international knowledge workers. The question then becomes what do knowledge workers want, and [particularly what do] young knowledge workers want?”, p.7

IMPLICATIONS FOR DIVERSITY PROGRAMS

1. How aware is top management and those responsible for major lines of business of recruitment opportunities both domestic and international over the next 10 years?
2. What is the company’s policy and programs for hiring and training older workers?
3. What is the company’s policy and programs for hiring and training foreign-born immigrants?
4. Does the company have recruitment and training capacities in countries that are likely sources of high-skilled labor?
5. What benefits, which are most attractive to young international knowledge workers, does your company offer, such as longer vacations, paid time off, guaranteed health benefits?
   

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