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The Workforce of Tomorrow - Economic Growth

rate demand services workers

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The economy's need for workers stems from the demand for goods and services, which is measured by the national gross domestic product (GDP; the total value of goods and services produced during the year). According to BLS projections reported in "Economic Growth" (Occupational Outlook Quarterly, winter 2005–06), the GDP is projected to reach approximately $14.7 trillion by 2014, after growing at a rate of 3.1% annually. This growth rate of the GDP has been fairly steady over the past two decades, according to the BLS, increasing at a rate of 3% per year during the period 1984–94 and at a rate of 3.2% per year from 1994 through 2004.

While the labor force is expected to grow by 10% over the 2004–14 period, growth in GDP is expected to be achieved through higher productivity (more output per worker). The BLS estimates that compared with an output valued at about $30 per hour per worker in 1984, productivity in 2014 will approach $60 per hour per worker. Increased technology and new equipment will enable workers to produce more efficiently, increasing output faster than the company's workforce grows. In the competitive global economy, high-productivity companies are more likely to prosper, increasing their output even further by hiring additional workers or achieving more production from existing workers.

Domestic and foreign consumers, including individuals, businesses, and governments, purchase millions of American products each year. Shifts in consumer tastes and government priorities can affect the growth of and demand for different kinds of goods and services. Technical changes in products also affect demand. For example, the use of more plastics instead of steel in automobiles increases demand for plastics and decreases demand for steel. Such changes can have a significant effect on industry employment.

Traditionally, households have spent most of their income on housing, transportation, and medical care. This trend should continue, according to BLS projections for the period 2004 to 2014 in Occupational Outlook Quarterly. Among expenditures for goods, those for computers and software are expected to rise at a rate of 20.3% between 2004 and 2014, which is a rate far faster than increases in consumer spending for video and audio goods (4.7%), prescription drugs (3.1%), household goods, appliances, and furniture (2.9%), clothing (2.9%), motor vehicles, parts, and fuel (2.6%), or food and beverages (0.7%). Among expenditures for services, medical care and insurance spending is expected to rise by 3.6%, recreation spending by 3%, telephone by 3.1%, education by 2.4%, housing by 2.3%, and transportation spending by 2%.

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