Workforce trends drive declining standard of livingNews added by Benefits Pro on July 31, 2014
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By Dan Cook

Experts have been predicting it, well, for generations now: that the upcoming generation may be the first to experience a lower standard of living than its preceding generation. Now, a comprehensive global study of economic and demographic trends argues that this time it could really happen.

The forecast comes from consulting giant Accenture. The company commissioned a study that crunched considerable data related to world population patterns, economic shifts and workforce trends. Its conclusion: By 2030, the U.S. standard of living could decline by as much as 9 percent, dropping it back to the 2000 level.

“For the first time in our nation’s history, the next generation may not be better off than their parents,” said Peter Hutchinson, who leads Accenture’s public service strategy for North America state, provincial and local business. “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.”

Three key factors led to the high-level conclusion about standard of living decline:

Working age population shrinkage: 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 percent, declining to a 1970 level.

Decline in workforce participation: There are not enough people of working-age actually working today, driven in part by youth unemployment (16- to 24-years-old).

Declining productivity: States are facing an unreliable growth rate in workforce productivity, which has fallen below 1 percent for five of the past 10 years and is now at one of its lowest points since 1960.

As part of its research, Accenture gathered considerable input from individuals from all levels of the workforce throughout the country. In addition, researchers conducted in-depth interviews with individuals in 12 states (California, Florida, Illinois, Indiana, Massachusetts, Michigan, Minnesota, New York, North Carolina, Ohio, Texas and Washington). The surveys and interviews revealed “growing dissatisfaction with government,” Accenture said.
As part of its research, Accenture gathered considerable input from individuals from all levels of the workforce throughout the country. In addition, researchers conducted in-depth interviews with individuals in 12 states (California, Florida, Illinois, Indiana, Massachusetts, Michigan, Minnesota, New York, North Carolina, Ohio, Texas and Washington). The surveys and interviews revealed “growing dissatisfaction with government,” Accenture said.
  • 72 percent of individuals surveyed said they have little or no trust in the ability of government to act quickly enough to address employment and skills issues;
  • 18 percent of employers surveyed said they had sufficient access to the skills they require, and only 12 percent of job seekers say it is easy to find the right job.
  • 58 percent of job seekers cited a lack of access to job information as a major barrier to finding employment;
  • Both job seekers (48 percent) and employers (56 percent) said better systems for matching skills needed with jobs that are available would help them find the right job;
  • 62 percent of employers do not think government is anticipating future skills demands.
The report, U.S. States: For Richer, For Poorer? Winning the battle for talent and securing our standard of living, concludes that one of the best ways to avoid this decline is for state governments in the U.S. to get busy and develop workforce participation and preparation programs that will reinvigorate the labor market.

“States are in a battle for talent,” Hutchinson said. “To win that battle, states need strategies and tools that can increase workforce participation and accelerate productivity growth. And they must act now.”

The report offered the following specific recommendations that, taken together, could prevent the standard of living decline:
  • 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.
Originally published on BenefitsPro.com
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