October 13, 2017 – The rapidly aging population will bring a surge of retirements by Silicon Valley workers over the next eight years, creating thousands of job vacancies that will alter the composition of the regional labor force, the Silicon Valley Institute for Regional Studies announced today.
In a special in-depth report on trends in labor force participation, the Institute estimates 300,000 older workers will retire through 2025, generating high-level implications for workforce policy.
“On the positive side for workers there will be numerous job openings at all skill levels,” said Stephen Levy, senior economist for the Institute and director of the Center of the Continuing Study of the California Economy. “The challenge for private- and public-sector employers is finding workers with the skills and experience to replace retiring boomers.”
Levy prepared the report in partnership with Rachel Massaro, Joint Venture Silicon Valley vice president and senior research associate for the Institute.
The retirement surge is expected to change the composition of job openings in the region by creating a large source of middle-skill/middle-wage jobs across a wide array of occupational categories vital to the region’s economy but not necessarily in tech, the report shows.
The surge will occur at time when job growth is expected to continue, albeit at a slower rate than in the booming post-recession recovery period and subsequent high-growth period of 2013-2015. At the same time, the region’s birth rate remains relatively low, limiting the number of local youth entering the workforce.
Labor force participation rates for workers ages 55 and over have increased over the past decade, the report data indicates, with older workers remaining in the workforce longer. As of 2016, 42.8 percent of that group were in the workforce, an increase from 38.5 percent in 2007. That compares with 85.4 percent of residents ages 25-54 in the workforce.
Workers ages 55 and older in Silicon Valley, California and throughout the United States are staying in the workforce longer. Compared to the state and nation, Silicon Valley had the highest number of older workers.
The report also noted that many retiring workers have substantial education and experience, particularly in such non-tech occupations as teachers, doctors, nurses, public safety workers, construction occupations and local government. Replacing these workers will pose challenges in both the public and private sectors.
Some 75 percent of the forthcoming job openings in the period between now and 2025 will come from replacing retiring workers or workers who change occupations. Workforce policies will need to focus on replacement needs in addition to new jobs and occupations.
These data do not present a complete picture of workforce trends in Silicon Valley because many workers commute into the region and are not included in the datasets. Expanded public transit is expected to bring even more workers into the region in the future.
About the Silicon Valley Institute for Regional Studies
The Silicon Valley Institute for Regional Studies provides research and analysis on a host of issues facing Silicon Valley’s economy and society. The Institute is housed within Joint Venture Silicon Valley. For more information, visit www.siliconvalleyindicators.org.
About Joint Venture Silicon Valley
Established in 1993, Joint Venture provides analysis and action on issues affecting the Silicon Valley economy and quality of life. The organization brings together established and emerging leaders—from business, government, academia, labor and the broader community—to spotlight issues, launch projects and work toward innovative solutions. For more information, visit www.jointventure.org.