The oldest of the post-World War II baby boomers – a group that includes President Bush and former President Clinton, incidentally – will turn 62 next year and become eligible for Social Security, touching off a demographic wave that will wash over the nation and have a particularly traumatic impact on California because of its unique socioeconomic makeup.
Not the least of the impacts, it’s becoming evident, will be on the California economy, as public and private employers watch workers retire and scramble for replacements.
As a series of new academic and economic studies indicate, the state could face a triple whammy, to wit:
Because the state’s population continues to grow by at least 500,000 a year and its job base by perhaps 250,000, California always needs more workers; and,
Baby boomers now make up about half of the state’s 15-plus million workers, and their retirement over the next couple of decades will sharply increase the demand side of the equation; but,
Huge percentages of California’s teenage and twentysomething population, especially non-whites and those from immigrant families, are not receiving the educations they would need to fill the demand.
Last month, the Public Policy Institute of California issued a study focusing on the critical role that imported workers play in the state’s economy, saying the demand can be met “only if it attracts college graduates in unprecedented numbers” but concluding that “it seems unlikely that a substantial number of college graduates will migrate to California.” It cites the state’s high living costs, especially housing, and the fact that other states will be experiencing a loss of baby boom workers as well.
“The workforce of 2025 will be skilled, but not as skilled – and the economy not as productive or high-income – as current projections imply,” the PPIC researchers concluded.
The California Postsecondary Education Commission, in another report issued last month, describes “a growing deficit in the state’s supply of college-educated workers.” It says employers will be increasingly dependent on importing skilled labor from outside the state, but it’s not certain that imports can keep up with the demand. It cites the relatively low levels of educational attainment by young Latinos.
Among California’s whites and Asian-Americans, CPEC says, 50 percent or more have associate degrees or higher levels of educational attainment, but those rates drop to 30 percent or lower among African-Americans and Latinos, the latter only about 15 percent.
And, CPEC says, California appears to be lagging behind other major states in educational attainment.
The Legislature’s budget analyst, Elizabeth Hill, coincidentally issued a report on a looming shortage of nurses, which is one of the state’s fastest-growing occupations, in part because of the aging of the population. She describes a mismatch between the rising demand for nurses and the ability of the state’s nursing schools to turn out graduates, and she suggests ways to boost enrollment.
These are only the three latest in a string of recent studies and reports reaching similar conclusions about the confluence of demographic and economic trends. And it’s no small matter, because the health of the economy in the years ahead is utterly dependent on our ability to develop high-value industries that require high-skill workers. Also, the ability of state and local governments to finance public services – including services for elderly retirees – is utterly dependent on the economy continuing to generate increases in tax revenues.
We could become, in other words, trapped in a vicious circle of economic stagnation that feeds economic stagnation and generates social disintegration.
