The U.S. standard of living is in danger of declining by 9% by 2030 – back to the level it was in 2000, warns global consulting firm Accenture in a new research report. If the consultants indeed are correct in their forecast, then for the first time in the history of the United States (U.S.), the next generation will actually be worse off than their parents.
In the report ‘U.S. States: For Richer, For Poorer?’, Accenture analysed the standard of living of the U.S. between and 1970 and 2015 and forecasted its development up to 2030. The researchers used three major economic factors as a proxy for standard of living: demography, participation and productivity.
The results reveal that on all three factors the U.S. economy risks losing ground.
- Population: As Baby Boomers retire, working age population (15- to 64-years-old) is shrinking as a share of the total population. By 2030, the working age population could shrink by 9%, declining to a 1970 level.
- Participation: Not enough people of working-age are actually working today, driven in part by youth unemployment (16- to 24-years-old).
- Productivity: States are facing an unreliable growth rate in workforce productivity, which has fallen below 1% for five of the past 10 years and is now at one of its lowest points since 1960.
As a result of these trends, the actual standard of living in 2030 will be considerably lower than what the people would hope for, or even expect. “For the first time in our nation's history, the next generation may not be better off than their parents,” says Peter Hutchinson, an advisor in Accenture's Public Service business unit. “For decades people have come to expect our economy and way of life to continue to improve, not decline.”
If the U.S. wants to return to a growing standard of living path, it will quickly have to address the talent management issues it will increasingly face, says Accenture. “To secure their standard of living, the U.S needs to win the battle for talent, in order to increase workforce participation and accelerate productivity growth. This is the only way to ensure the right quantity and quality of talent needed for economic success,” state the authors. In their recommended ‘action plan’ the consulting firm advises that states take action in four key areas:
- Real-time information on the demand and supply of skills and competencies. Accenture recommends that states provide real-time, skill- based information about jobs that are in high demand and promote the workforce qualifications needed to fill those jobs; this will result in better directing employers to the right pools of talent, helping job seekers match their skills with employer needs, and engaging educators to focus on developing the employment skills needed for today's economy.
- Talent supply pipelines. States should create talent supply pipelines that can provide employers, including government, with reliable access to the skills and competencies they need.
- Roadmaps showing pathways to jobs. States should offer every job seeker a personalised road map that shows him or her how to put unique talents to work, to gain the skills and competencies needed for the desired job.
- United talent agenda focused on increasing standard of living. States should create a unified, statewide talent agenda that pulls together all related agencies, programs and budgets that focuses on increasing the standard of living.