Retiring Baby Boomers, a relatively young and growing Hispanic population, and an increase in the construction industry’s share of the economy are all factors that will contribute to Hispanics making up more than three-fourths of the growth in the labor force between 2020 and 2034, accroding to a new report from IHS Economics.
Hispanic workers will account for 40 percent of the employment increase in the U.S. over the next five years, IHS economist James Gillula projected in the report, released Tuesday.
That share will jump dramatically in the decade-and-a-half after that — as IHS predicts that 11 million of the 14 million increase in the labor force between 2020 and 2034 will be made up of Hispanics, a 78 percent share.
A major factor in the lopsided increase in Hispanic labor share is age. According to the study, 17.4 percent of the non-Hispanic workforce will retire over the next decade. In contrast, only 9.8 percent of Hispanic workers are expected to do the same, according to Gillula.
And in terms of core working age, the non-Hispanic population between 16 and 64 years old will decline until 2029 and then increase at a 0.1 percent annual rate between 2030 and 2034.
By comparison, the Hispanic population in the 16 to 64 age range will grow at 2 percent per year over the next 20 years.
“As a result, the Hispanic share of the population age 16–64 will rise from 17.3% in 2014 to 24.2% in 2034,” Gillula wrote.
“Under conservative assumptions about Hispanic immigration, we project that Hispanic employment growth will average 2.6% per year over the next 20 years and rise from 16% of US employment in 2014 to 23% in 2034.”
Growth in the construction sector will contribute to Hispanics’ increased share of the labor force. Investment in residential and nonresidential construction projects will push the industry’s share of employment up from 4.3 percent in 2013 to 5.8 percent by 2034.
“This long-term upward trend in construction employment is a positive factor for Hispanic employment growth,
since construction is the industry with the highest concentration of Hispanic employment,” Gillula wrote.
All of those factors translate into the 40 percent share of Hispanic labor force growth by 2019 and then a 78 percent share from 2020 through 2034.
In his baseline scenario, Gillula projects that the number of Hispanics in the labor force will increase from 23.5 million in 2014 to 28.1 million by 2019 and to 39.2 million by 2034. At the same time, the U.S. labor force as a whole will increase from 146.3 million in 2014 to 157.1 million by 2019 and to 171.4 million by 2034.
The Hispanic share of labor force growth could be higher if immigration rates end up higher than projected, Gillula wrote.
Gillula also asserted that higher immigration rates — which he supports — will help improve the U.S. economy. In his baseline economic forecast, he projected that real GDP growth will average 2.5 percent per year. In another forecast with higher immigration rates, Gillula projected that the economy will grow at a 3 percent annual clip.