The Next 10 Million Jobs–Part 1
This post begins our series on “The Next Ten Million Jobs.” Based on our analysis of the latest BLS employment projections, the U.S. economy will produce roughly 10 million jobs between now and 2030. The question is what kind of jobs will they be; how can Americans prepare for emerging new occupations; and what can policymakers do to improve the job situation.
We use the BLS projections as a starting point, but we don’t take them as gospel. First, we extend them from 2028 to 2030, to actually give us a ten-year projection horizon for the presidential race of 2020. But we also dig deep into some of the assumptions underlying the official projections. In particular, they can be thought as embodying a cautious extrapolation of current technological trends. For example, the BLS expects the number of heavy and tractor-trailer drivers to grow over the projection horizon, rather than being suddenly wiped out by autonomous trucks.
But recent history shows that technological change can drive sudden shifts in jobs, and create emerging new occupations. For example, the rise of ecommerce fulfillment centers means that the number of workers employed in the warehousing industry grew much faster than expected. Based on the BLS projections released in 2009, the warehousing industry was only expected to add 80K jobs between 2008 and 2018. Instead, the actual gain was closer to 500K.
Similarly, in 2007 no one could have predicted the rise of the App Economy, which has created so many new jobs since the introduction of the iPhone and all the smartphones to follow. Our latest estimate shows that the U.S. has roughly 2.2 million App Economy jobs, including a conservative calculation of spillover jobs. These jobs are supported by a bevy of technologies, including the iOS and Android mobile operating systems and the related app stores; fast and extensive mobile networks, which operators such as AT&T and Verizon are spending billions to upgrade to 5G; and an incredible number of mobile applications for consumers and businesses, written and maintained by both small app developers and app developers working for large companies.
In this series of posts we’re going to try to identify some emerging new occupations and industries that have the potential to create new job opportunities for Americans. These may or may not correspond to the BLS projections.
But for this first post, we start with the single biggest headline from the BLS projections: The importance of healthcare and social assistance jobs for the labor market. By our estimate, out of 10 million net new jobs by 2030, more than 4 million will be in healthcare and social assistance. As a result, between now and 2030, growth of healthcare and social assistance jobs accounts for 44% of the net growth of nonagricultural wage and salary jobs. That’s up from 39% in the period from 2007 to 2018.
In effect, healthcare has become the black hole of the labor market, sucking in workers at a prodigious rate.
From the perspective of young people entering the labor market, these huge numbers send a clear signal that healthcare is the place to be. Why wouldn’t you aim for the industry that is creating almost half of new jobs?
The problem for policymakers, though, is that the rapid growth of health care jobs is the single biggest driver of healthcare spending increases, as we have noted in past posts, by a wide margin. So the only way to restrain healthcare spending is to hold down health care job growth.
This takes on special meaning as proponents of various healthcare reforms try to find a way to hold down costs to make the numbers works. In this context, it should also be said that many European countries, with different health care systems than ours, are seeing an equally rapid growth in healthcare and social assistance jobs. For example, in Germany, health and social assistance jobs amounted to 37% of net new jobs created between 2008 (the business cycle peak) and 2017, the last data available. That’s based on OECD data.
Going forward, we can imagine two alternative scenarios to the BLS healthcare employment projections. In one scenario, a Democratic victory in 202o leads to expanded healthcare coverage, either in the private sector or by offering a public option. In that case, the number of jobs will increase faster than expected, and young people who go into health care will find a very strong labor market.
In the other scenario, policymakers try to hold down the growth of healthcare costs by boosting labor productivity and restraining the growth rate of health care jobs. That means young people who go into health care run the risk that health care job growth will be less than expected.