A recent report from Forward Analytics, the research division of the Wisconsin Counties Association, paints a dire picture of the state’s future workforce.
The report, titled “Falling Behind,’’ uses the ratio of younger residents to older residents near retirement age as a long-term metric for the state’s ability to grow its labor force. The greater the ratio, the better the outlook is.
In 1990, Wisconsin had 1.75 residents under 16 for every resident aged 50 to 64. In the following 15 years, the state’s workforce grew 17 percent.
By 2000, that ratio had fallen to 1.42, and between 2000 and 2015, the state’s workforce grew by just 4 percent.
Now that the ratio has fallen to 0.87 in 2017, study authors caution Wisconsin’s workforce outlook is even worse.
“Wisconsin has too few young people to replace retiring baby boomers over the next 15 years, so the state must turn to migration to grow its workforce,” said Dale Knapp, director of research for Forward Analytics.
But in the five-year period between 2010 and 2015, the state lost population among “key workforce groups,” Knapp notes, with the “most troubling” being the net loss of young families.
According to the report, the state has often balanced out the number of young people leaving by attracting people in their 30s, 40s and 50s. Between 2000 and 2005, the state lost about 25,000 young adults but added over 40,000 new older residents.
But between 2010 and 2015, the state lost 30,000 young adults while also losing residents in those older age groups.
It’s noted in the report that people moving to the state in their late 20s to early 50s often bring children with them, who help bolster the future workforce. But in recent years, net migration of children to the state has dropped off, prompting concerns about long-term workforce growth.
With these factors putting a strain on the state’s economy, report authors say the state could try to improve its labor force participation rate. That rate has largely fallen in Wisconsin since the late 1990s, going from a peak of 74.5 percent in 1997, to 68.6 percent in 2017.
The biggest factor behind that drop is the state’s aging baby boomers. The report shows this generation was roughly 35 to 54 years old in 2000 and totaled more than 1.6 million residents, making up nearly 40 percent of the working age population at the time. For these ages, participation rates were around 90 percent.
But by 2015, when baby boomers were between 50 and 69 years of age, their workforce participation had fallen significantly. The workforce participation rate was under 70 percent for those aged 55 to 64, and about 15 percent for those aged 65 or older.
These trends illustrate why it would be very difficult for the state to achieve greater workforce participation, according to the report. Even if rates for each age group returned to their levels from two decades ago, the state’s labor force participation rate would still fall about 4 percent by 2025. And if rates were to remain at their current levels, the decrease would be even greater.