Jobs Friday: Future Edition : Planet Money The Bureau of Labor Statistics has some predictions about the future of the US labor market.
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Jobs Friday: Future Edition

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Jobs Friday: Future Edition

Jobs Friday: Future Edition

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(SOUNDBITE OF MUSIC)

CARDIFF GARCIA, HOST:

Hey, everyone. Summer officially does not end for another week and a half. But to us, it's over. It's done. It ended this morning. Why?

(SOUNDBITE OF AIR HORN)

GARCIA: Yup - today's Jobs Friday. The jobs report for the month of August from the BLM - that's the Bureau of Labor Statistics - came out this morning, the last jobs report of the summer.

DARIUS RAFIEYAN, BYLINE: Very exciting stuff.

GARCIA: Yeah.

RAFIEYAN: The economy created 130,000 new jobs in the month of August. The unemployment rate stayed stable at 3.7%. The report basically confirmed what we already know - the economy is still creating a decent number of jobs each month, but fewer than last year, and the labor market has slowed down.

GARCIA: Yeah. And we like to say on this show that because the jobs numbers can fluctuate a lot - they swing up and down a lot from month to month - we prefer to look at the long-term trends. Well, today we are looking long into the future because the Bureau of Labor Statistics also just came out with its new projections for what will happen in the labor market through the year 2028 - so roughly the next decade. I'm Cardiff Garcia.

RAFIEYAN: And I'm Darius Rafieyan. Today on THE INDICATOR FROM PLANET MONEY, we have five main takeaways from that report, looking ahead to the next decade. A lot of people are going to be retiring. Will that slow growth in the labor market? Which part of the economy is going to create the most jobs in the next decade? Which part is going to lose the most jobs? And perhaps most importantly, how good will those new jobs actually be? We'll tell you right after the break.

GARCIA: Not going to be all podcasting jobs, sadly.

RAFIEYAN: (Laughter) Podcasting, though - real growth area for the labor market.

GARCIA: Yeah (laughter).

(SOUNDBITE OF MUSIC)

GARCIA: OK. The Bureau of Labor Statistics has issued its forecast for what's going to happen in roughly the next 10 years. A quick caveat here before we get started - these forecasts are based on assumptions about the future, and of course, unexpected things can happen that end up changing how that future actually unfolds.

RAFIEYAN: You know, making predictions is tough, especially about the future.

GARCIA: Hey, Yogi Berra in the house. That's right.

RAFIEYAN: You know, it's better to think of these projections as extensions of current trends. So this is the direction the labor market is headed right now, not necessarily where it will end up. Don't at us.

GARCIA: No, do not at us (laughter). Do not at - there won't be any Twitter in 10 years.

RAFIEYAN: (Laughter) And with that said, here are the biggest takeaways - a few of them that we noticed and a couple that come from analysis by economists whose work we follow.

GARCIA: Takeaway No. 1 - the overall labor force is expected to grow at roughly the same pace in the next decade as it grew in the last decade. This is the number of people who are either working or they're not working, but they are looking for work. And it's today's Planet Money indicator - the labor force will grow by roughly 0.5% a year for the next decade.

RAFIEYAN: And this might be surprising to a lot of people. You might have heard that the population is getting older and that a lot of people are getting close to retirement age and will fall out of the labor force. But actually, one reason the labor force will continue growing is that a lot more people are expected to keep working later into life, past age 55, 65, even 75. So this one's a little bittersweet.

GARCIA: Yeah, it is a little bit. Depends on your job, depends on how much you like it, how much you need it. Although I got to say, you know, the fact that a lot of people are working into that later age, like, gives me a lot of hope.

RAFIEYAN: Well, I mean, it could be an indication that people are just, you know, more vital in their later years and want to keep participating in society; it could be that they can't afford groceries.

GARCIA: Yeah.

RAFIEYAN: And they need to keep working.

GARCIA: That brings us to our second takeaway - people over the age of 55 will increasingly be a bigger part of the labor force. Just because people are getting close to retirement doesn't mean they have to retire.

RAFIEYAN: Two decades ago, only 1 out of every 8 people in the labor force was 55 or older. But that number has been going up, and in another decade, it'll be 1 out of every 4 people in the labor force who will be 55 and up.

GARCIA: Yeah. And as we just said, some of these folks are staying in the labor force because they want to, because they like their jobs, and some of them are doing it because they might need the money. They might need it for retirement. We'll leave that for another episode. But the point for now is that people will be working later into their lives, and that helps the labor force keep growing, even though the overall population is getting older.

RAFIEYAN: Takeaway No. 3 - this won't come as a surprise, but the sector of the economy that is expected to create the most jobs in the next decade is health care. I mean, it's not even close. Just by a landslide, it's health care. And it's going to create more than 3 million jobs, especially in occupations like personal care aides and home health aides, which, you know, makes sense. Our population is aging.

GARCIA: Exactly right. And on the flip side, it also won't come as a surprise that the sector of the economy that will lose the most jobs is manufacturing. This is the sector of the economy that is very vulnerable to jobs being lost because of new technologies, because of automation and, in some cases, because of trade. And that sector of the economy is expected to lose about 640,000 jobs.

RAFIEYAN: The fourth takeaway is that the occupations that will create a lot of those jobs are relatively low-paying. Here's a statistic from economist and friend of the show Heidi Shierholz. She looked at the 10 occupations that will create the most new jobs. And it turns out that six of those occupations pay wages of less than $27,000 a year, which means these jobs pay a lot less than the typical job in America as a whole, which pays $38,000 a year. These include occupations like waiters and waitresses, who make roughly $22,000 a year, personal care aides at $24,000 a year and janitors at $26,000.

GARCIA: Yeah. That said, the top 10 occupations also included a few that pay quite well, like nurses at $72,000 a year and software developers, who make $103,000 a year. And that brings us to our fifth and final takeaway. It comes from Jed Kolko. He's the chief economist at Indeed, the online job search site. Jed found that the occupations with the slowest jobs growth were the ones that paid middle-class wages. On the other hand, the occupations that pay the top 20% of salaries and the occupations that pay the bottom 20% of salaries, those are going to have the fastest jobs growth.

RAFIEYAN: In other words, the occupations that pay the most are going to grow a lot. So are the occupations that pay the least. The occupations in the middle, they'll still keep growing but not as much.

GARCIA: Exactly right. So that's it - five takeaways from the labor market of the future. To summarize, speed round edition - the labor force will keep growing.

(SOUNDBITE OF BELL)

GARCIA: People over 55 will be a bigger part of the labor force.

(SOUNDBITE OF BELL)

GARCIA: Health care will create the most jobs; manufacturing will lose the most jobs.

(SOUNDBITE OF BELL)

GARCIA: A lot of the new jobs created pay very low wages, but some of them pay very high wages.

(SOUNDBITE OF BELL)

GARCIA: So it's those occupations that pay the middle-income salaries where the jobs growth will be the slowest. That's it - summer's over.

RAFIEYAN: Yeah.

GARCIA: It's over for us, I think.

RAFIEYAN: The leaves are falling off the trees. The weather's getting colder.

GARCIA: I think...

RAFIEYAN: We're all receding into our apartments.

GARCIA: Econ podcasters are already breaking out their light jackets and getting ready for the leaves to turn. Yeah, very exciting.

RAFIEYAN: Do we want to go have some cocoa, right now?

(LAUGHTER)

RAFIEYAN: Let me see how fast you can do it.

GARCIA: Yeah, no problem. THE INDICATOR is produced by Rachel Cohn and Darius Rafieyan. Darius also co-hosts now and again. And it is fact-checked by Emily Lang. THE INDICATOR's also edited by Paddy Hirsch. It is a production of NPR.

RAFIEYAN: You came in just under the wire.

GARCIA: Boom.

(SOUNDBITE OF MUSIC)

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