Sushi Money

Wouldn’t you like to peek at the world in 2015 or 2030 to see what the hot trends are, or how business, fashion and consumer choice has evolved?  If we could do that, we would have incredible insight into so many things… how economic society has evolved, which career opportunities are best, which investments would really pay off and where consumers will be spending their money for example.  I believe we can tap into that vision just by looking at the world around us.  If we think about leading technologies, generational demographics and which consumer trends are most popular today, we can extrapolate some key ideas about the future.  Technology comes to mind first for many of us, especially with wireless personal productivity tools and entertainment devices (iPod anyone?).  But sometimes that technological growth may best serve other business needs such as with healthcare services.  But there are also tools that can help give us ideas… and people and professionals who specialize in identifying key areas of future growth.

    Take the U.S. Bureau of Labor Statistics (BLS) for example.  Yes, it’s a government entity, but there are probably few places that compile as much boring data as the U.S. government.  Well, maybe Google, but let’s stick with the government’s data for now!  The only downside perhaps is that the government’s data is often a few years behind.  It takes time and a great deal of statistical analysis to generate useful information, and that’s why many government reports appear outdated.  But in many areas, they are the closest thing we have to a current picture of where we might be headed.

     In a 2005 update to the original report titled Tomorrow’s Jobs, the BLS provides immense insight into the years between now and 2014.  That sounds so far into the future… but it’s only 7 years from now!  The data and forecasts are very interesting for what they reveal… in many ways it’s common sense, and we don’t really think about it.  But we know it’s relevant when we see it.  Among the key points from the report:

• Demographic and Aging issues will take center stage, especially among the Boomer population.
• The youth population, aged 16 to 24, will grow 2.9 percent over the 2004-14 period. As the baby boomers continue to age, the group aged 55 to 64 will increase by 36 percent or 10.4 million persons, more than any other group. The group aged 35 to 44 will decrease in size, reflecting the birth dearth following the baby boom generation.
• The long-term shift from goods-producing to service-providing employment is expected to continue.
• Employment in the information supersector is expected to increase by 11.6 percent, adding 364,000 jobs by 2014. Information contains some of the fast-growing computer-related industries such as software publishers; Internet publishing and broadcasting; and Internet service providers, Web search portals, and data processing services. Employment in these industries is expected to grow by 67.6 percent, 43.5 percent, and 27.8 percent, respectively.
• Arts, entertainment, and recreation will grow by 25 percent and add 460,000 new jobs by 2014. Most of these new job openings will come from the amusement, gambling, and recreation sector. Job growth will stem from public participation in arts, entertainment, and recreation activities—reflecting increasing incomes, leisure time, and awareness of the health benefits of physical fitness.
• Women’s labor force participation increases are now stabilizing after peaking at 60% in 1999.
• Increasing racial and ethnic diversity in the work force will continue in the years ahead with the hispanic population making the largest gains in population growth.

     Here’s one of the BLS forecasts that is probably no longer accurate, but it was written in 2003-2004 and updated in 2005.  Many knew there was a real-estate “bubble” but we are still finding out what the future holds:

• The fastest growing industry in the financial activities supersector will be activities related to real estate, which will grow by 32.1 percent, reflecting the housing boom that persists throughout most of the Nation.

      Well… maybe a bit optimistic in terms of housing and mortgage growth, at least as it looks today.  Yet the financial services sector as a whole will be growing very fast, especially regarding financial planning, retirement and estate planning, and healthcare funding.  But maybe equity withdrawals and reverse mortgaging will take a much larger role to fulfill needs such as healthcare or retirement funding, so the BLS forecast may not be too far off (if we can get through this liquidity mess first!).

     What else can we consider about the future and opportunity? It’s no secret that gaining an education is one of the best things we can do to improve future employment and income opportunities.  We pretty much know that better education = better jobs over the long-term.  But here’s an interesting BLS chart from 2006 contrasting the inverse relationship between unemployment and earnings with increasing educational attainment:

Education pays in higher earnings and lower unemployment rates

Note: Data are 2006 annual averages for persons age 25 and over. Earnings are for full-time wage and salary workers. Source: Bureau of Labor Statistics, Current Population Survey.

     Looking at job opportunities, what are the fastest growing U.S. occupations through 2014?   From the 2006 Occupational Outlook the BLS produced the following chart (click the thumbnail to enlarge):

     Simply because an occupation is growing quickly doesn’t mean it will provide the most new jobs.  Here’s a chart for the BLS forecast for the most new jobs through 2014 (click the thumbnail to enlarge):

     Not surprisingly, there will be a lot of job opportunity in service industries and healthcare.  We are an aging society, and the demographics of the future reveal some amazing statistics.  If you want to start a new business and enjoy working with older adults, the opportunities will be there for years to come.  Think home health needs, and businesses that provide services for those who don’t have the specialized knowledge or do not want to do the job themselves.  I think of myself as a ”tail-end boomer” and I’m a do-it-yourselfer for the most part, but I can think of several things at home I’ve contracted out for over the past year, and those opportunities will only increase in the future.  Take a look at this birth chart from 1920-2005.  It’s interesting to note the “pig in the python” of the Boomer population:

 

     Many people within the leading edge of the Boomers (those born around 1946) have already begun retiring… a retirement wave that will continue for more than 18 years!  And then think of how many years the Boomers will spend in retirement… it’s no wonder that older adults will play a large role in shaping the economic and cultural course of society over the next several decades.  Let’s contrast Boomer retirement with the current U.S. life expectancy average for both men and women which is about age 78.  If a Boomer retires at age 60, they’ll have 18 years in retirement.  So for those who began retiring in 2006, their retirement will theoretically last through 2024 or beyond.  For the tail-end Boomers (those born in the early 1960’s), they will enter retirement around 2024, and continue in retirement until 2042 or beyond!  Obviously there are more people before and after the Baby Boomers that will be retiring, but suffice it to say that from now until the mid-2040’s we’ll be seeing a larger population of U.S. adults in retirement than ever in history. With medical advances and healthcare improvements, we may even be living a lot longer in the decades ahead.

     What about comparing population aging with working in the labor force?   Older adults will continue working into their later years, both out of desire and need in many cases.  But there will also be fewer young people to work at many service jobs in future years.  Have you noticed at fast food restaurants lately, that many of the workers are older?   This BLS chart compares labor force participation by age group in 2004 with a forecast for 2014:

     Here’s another comparison of labor force participation by age group, but this time comparing the years 1950, 2000 and a forecast for 2050 (click thumbnail to enlarge):

Source: Bureau of Labor Statistics, 2005

     Obviously there are many other factors to consider when looking at the future of the U.S. economy and the workforce.  Statistical forecasts are only as good as estimates based on current policy norms, i.e. if legislative policies produce affect changes in areas such as immigration, then that throws off a whole host of projections for the future workforce and population estimates.  As of 2006, the BLS talked about how immigration affects the labor force:

  As far as population projections are concerned,
different immigration scenarios result in different
growth rates for the population and the labor force. Because
immigration accounts for more than 40 percent of the growth
of the U.S population, assumptions about immigration have a
direct effect on the Census Bureau’s population projections
and hence on the BLS labor force projections.

According to the Census Bureau’s Web site, the United States
posts one birth every 8 seconds, one death every 11 seconds,
one (net) international migrant every 31 seconds, and a net gain
of one person every 14 seconds. Changes in future immigration
policies could affect the growth rate of the population, which is
the major factor in labor force projections.

    I’ve always wanted to learn a new language and it looks like that would be a very helpful career skill in the years ahead.

    But what about other trends of the future?  Here’s a short list of the World Future Society’s Top Ten Forecasts from their annual outlook of future trends for 2007 (click the link above for a detailed look):

1. Generation Y will migrate heavily overseas.

2. Dwindling supplies of water in China will impact the global economy.

3. Workers will increasingly choose more time over more money.

4. Outlook for Asia: China for the short term, India for the long term.

5. Children’s “nature deficit disorder” will grow as a health threat.

6. We’ll incorporate wireless technology into our thought processing by 2030.

7. The robotic workforce will change how bosses value employees.

8. The costs of global-warming-related disasters will reach $150 billion per year.

9. Companies will see the age range of their workers span four generations.

10. A rise of disabled Americans will strain public transportation systems.

     You know, I really believe in living each day to its fullest because they don’t come back.  But I’m also intrigued by the future… what lies ahead, and the opportunities and changes that will come.  I wonder what the stock market will be doing!?  I’ll bet it’s higher ;)  That’s about as close as I’ll get to a real forecast.  Some authors think the retirement of the Boomers will have a negative affect on market valuations, thinking that withdrawal rates may increase greatly over time, and dragging the market down.  Maybe, but somehow I think most of our retirement and investment needs will still need a place to grow beyond what bank accounts, CD’s and fixed income can provide.   I still find it useful to look at trends and future projections, and it can give you a pretty good idea of business sectors that will continue to grow strongly in the years ahead.  Think healthcare and service industries. Besides fixed income, if a Boomer wants to stay invested in the stock market, I think dividend paying stocks and balanced mutual funds will be the choices du jour. 

    With many thoughts in mind I’m working on my own “Top Ten” list of future goals for positive career and life growth.   I enjoy thinking about change and finding ways to improve.   Looking at my own future in terms of career focus and opportunity, I’ve always enjoyed reading What Color is Your Parachute?  I started with this book more than 20 years ago… it’s updated every year, and is as useful today as it was then.

What Color Is Your Parachute? 2007: A Practical Manual for Job-Hunters and Career-Changers

Another book on career change, which some say is the best career exploration book ever, bar none… is The Pathfinder.  It has a wonderful career counseling focus with insights on human nature and self-growth.

 The Pathfinder: How to Choose or Change Your Career for a Lifetime of Satisfaction and Success