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IU Research Projects Indiana’s Workforce Growth To Dwindle

By Samantha Horton, IPB News | Published on in Business, Community, Statewide News
(Courtesy of Indiana Business Research Center)
(Courtesy of Indiana Business Research Center)

Although the state is projected to need to fill 1 million jobs in the next decade, a recent report shows the state is entering an era where Hoosier labor force growth will slow to almost zero.

The impending retirements of large numbers of Hoosier baby boomers is expected to decimate the state’s job force. Indiana University researchers say the state may see 98 percent less job force growth in the coming three decades as it saw while the baby boomers were aging into the workforce.

Between 2020 and 2050 the research estimates the labor force in Indiana will add only 34,000 workers total. That’s in contrast to about 280,000 new employees per decade from 1950 to 2010.

Indiana Business Research Center deputy director Carol Rodgers says businesses have to be competitive to fill jobs.

“It’s our slow population growth right now as well as the really terrific job market which makes people very mobile,” she says.

Rodgers says it could also mean companies will be more reliant on automation to address a tight labor market.

Some business will be able to take advantage of automation, but Rodgers says home healthcare will still need human workers, and may struggle to find them.

“I think we’ve seen a big drive of both by Medicare as well as the healthcare industry rising to try help people age in place,” she says. “I like to joke with my son that Alexa is going to take care of me or Siri, but I think home healthcare is going to require humans and we’re already seeing severe shortages of people.”

A portion of Indiana’s drop in workforce growth is declining birth rates, as parents have fewer kids. The most recent estimate from the World Bank is a fertility rate of 1.8 births per woman.

“Back in the baby boom days, it was 3.7 so you replaced the parents and then some,” says Rodgers. “Now we’re looking at a fertility rate where people are choosing not to replace themselves at all.”

The research estimates, had fertility rates not dropped since Great Recession, Indiana could have had around 70,000 additional births in this decade.

Another challenge is the sharp annual decline in migrants to Indiana – from a net of 17,500 a year in the 1990s to 1,900 a year since 2010. Rodgers says that population helps keep communities in the positive for workforce growth.

“We used to get thousands and in many communities that was the difference between population decline and population growth,” she says.

Some suggestions researchers give to try to reverse Indiana’s projected loss in workforce growth include increasing immigration, raising wages and creating more educational pathways for youth to quickly join the workforce.