The Hidden Source of Future Job Opportunities in the Pittsburgh Region
But not all job opportunities come from job creation. In particular, when a current worker retires from the labor force (assuming their employer decides to fill the vacancy), that creates a net new job opportunity in the regional economy, even though there is no increase in the total number of jobs.
Every community has workers approaching retirement. But a higher proportion of workers in the Pittsburgh Region are nearing retirement than in any other large region. At the end of 2005, 17.7% of the workers in the Pittsburgh Region – more than 1 out of every 6 – were age 55 or older. In contrast, only 13.1% of the workers in Austin and San Diego were that age. In Atlanta, Charlotte, Dallas, Denver, Houston, Indianapolis, Minneapolis, Seattle, and Silicon Valley, 15% or less of the workforce is age 55 or older.
That means that over the next decade, Pittsburgh will likely have a higher rate of job opportunities resulting from retirements than any other region. And that could make a dramatic difference in how Pittsburgh looks to a potential job seeker.
Here’s an example. Pittsburgh and San Diego have about the same size economies – in 2006, the Pittsburgh Region had 1.1 million jobs, and San Diego had 1.3 million jobs. Let’s assume that over the next ten years, in each region, 2/3 of the workers who are currently aged 55-64 retire after they pass age 65, and that their employers fill their jobs. That will create an average of 10,700 net new job openings per year from retirements in the Pittsburgh Region, compared to only 9,000 in San Diego.
So even though total jobs in Pittsburgh are growing half as fast as in San Diego (there were 9,000 net new total jobs in Pittsburgh vs. 18,600 in San Diego in 2006), when you combine retirements and job creation, Pittsburgh may well create 70% as many job opportunities as San Diego (19,700 vs. 27,600).
Moreover, the competition for these job opportunities will be lower here than in other regions. The high average age of our population means we will have fewer young people entering the workforce relative to retirements than will other regions. In the 2000 Census, Pittsburgh had the second smallest ratio of people aged 10-19 to people aged 55-64 of any major region in the country. (By 2010, most of the 10-19 year olds will have entered the workforce, while most of the 55-64 year olds will have retired.)
Regions like Atlanta, Dallas, Denver, Minneapolis, and San Diego had twice as many 10-19 year olds as 55-64 year olds, while Pittsburgh had only 50% more. That means that even with slower job growth than other regions, Pittsburgh is likely to have more job openings than its current workforce can fill, providing job opportunities for new residents.
There’s a downside to this, though – if employers can’t find enough workers to fill the jobs that open up due to retirement, they may have trouble remaining competitive. The Three Rivers Workforce Investment Board last year issued a report calling attention to the fact that many of our key industries have large portions of their workforce approaching retirement.
We need to encourage job-seekers to move here and take advantage of the opportunities from both job growth and job openings, so we can grow our population base and insure that we don’t have a workforce shortage.